The Millennium Project argued that aid has frequently been wasted in the past, and opposes funneling money into corrupt or dictatorial regimes instead of into real investments for development. However, many countries in the developing world are reforming their economies and adhering to good governance while trying to alleviate the plight of their poorest citizens. Even these countries are not receiving enough development assistance to achieve the MDGs, and they cannot meet the Goals without a major boost in development aid.
Discussions of governance in development typically confuse inputs and outcomes. There are two very distinct underlying causes for what is termed “poor governance.” One is genuinely “corrupt” leadership where larcenous or brutal leaders hold political power. The state may be run for the personal benefit of a narrow elite, or a particular interest group or ethnic group. The leadership lacks will to achieve broad-based development goals.
The second cause is governance that is weak not because of poor leadership, but because the state lacks the financial resources and technical capacity to manage an efficient public administration. Many of the world's poorest countries lie closer to this second category, where governments possess the will but lack the resources to run the public sector effectively. The key in such cases is to invest in improving governance by promoting the rule of law; political and social rights; sound economic policies; accountable and efficient public administration and by supporting civil society.
Bold MDG-based investment programs cannot be scaled up in developing countries with extremely poor governance. But the international community has recognized many low-income countries as having strong governance and the potential for much more ambitious investment programs. During 2005 we recommended that these well governed low-income countries be “fast-tracked” by the international community and receive the major increase in development assistance needed for them to implement MDG-based poverty reduction strategies as soon as possible.
Several pre-existing criteria could be used to help identify the fast track countries. They include countries that have reached completion point under the Heavily Indebted Poor Countries (HIPC), those that have qualified for support from the U.S. Millennium Challenge Corporation; those that have acceded to the African Peer Review Mechanism of the New Partnership for Africa's Development; or those with favorable reviews through the World Bank-IMF Joint Staff Assessments of PRSPs.