Economic Advisory Council Spring 2026 Meeting Minutes

April 24, 2026
10 am - 12:30 pm

Selection of Chair, Welcoming Remarks, and MCC 101

The meeting began with a call to order. Former EAC Chair Shahrokh Fardoust nominated current member Alan Gelb to serve as the incoming EAC Chair. No other names were nominated, and by the council's consensus, Gelb's nomination was confirmed. Arif Mamun thanked Gelb's predecessor Shanta Devarajan for his service for two consecutive terms.

Representing MCC's Office of the Chief Executive Officer, Dan Petrie offered welcoming remarks to the EAC, emphasizing that MCC's core tenets are sustained and that the agency's rigorous and evidence-based practices to ensure investing in opportunities with the strongest potential economic returns will continue. He also noted that it is essential to apply the evidence-based approach to the question of measuring and reporting MCC's benefits to the U.S. and appreciated the EAC's engagement on this issue.

Deputy Vice President and Acting Chief Economist Arif Mamun presented an overview of the MCC model aimed at unlocking economic growth, along with an update on MCC's program portfolio. During the presentation he briefly discussed the composition of the MCC Board, partner country selection process, economic analysis at MCC for problem diagnosis and project assessment, and the agency's efforts to evaluate all its programs and publish results on its Evidence Platform.

Capturing the Mutual Benefits of Development Assistance

MCC Managing Director for Economic Analysis Bradley Cunningham presented an overview of the topic note, circulated in advance of the meeting. Two members of the EAC served as initial discussants.

Will Martin focused on how specific tools and analytic approaches can support MCC's efforts to quantify benefits to the U.S. economy. His discussion pointed to computable general equilibrium (CGE) models as well as descriptive measures of supply chain vulnerability, such as the Hirschman-Herfindahl index. Martin emphasized how early recipients of U.S. foreign assistance eventually grew into sizable markets for U.S. investments, while the U.S. domestic economy often benefited from the fruits of U.S. assistance abroad through innovations that raise U.S. productivity (e.g., improved crop varieties, pest and disease control).

Lant Pritchett argued that MCC's model of country engagement is particularly effective for enhancing U.S. influence and soft power around the world. Although not susceptible to simple measurements or quantification, soft power can provide critical benefits to the U.S. Emphasizing more quantifiable benefit streams can also raise questions about how to maintain the broad buy-in of America's foreign policy establishment. Pritchett also asserted that reliance on U.S.-supplied procurements, i.e., tied aid, may in some cases effectively tax aid and limit the goodwill that might otherwise emerge from helping countries pursue their development goals.

During the rest of the meeting, members of the EAC offered comments and feedback across a variety of themes, summarized below.

• Quantification: methods, limits, and risks. EAC members generally expressed agreement with the approach to quantifying benefits suggested in the topic note. They acknowledged measurable channels for tracking U.S. benefits, such as, trade, procurement, services, FDI, and jobs, and supported a multi-faceted approach to quantifying benefits. For example, CGE models can simulate trade and welfare effects resulting from productivity shocks. Gravity models directly estimate trade flow responses to economic shocks. And input-output tables can directly link MCC investments to an economy's cross-sectoral response. Different approaches offer complementary ways to triangulate benefits, compelling a careful assessment of the diverse U.S. interests at stake.

  Members raised several issues for MCC to consider. Technical methods for attributing U.S. benefits to specific MCC interventions require strong assumptions, and estimating benefits ex ante adds greater uncertainty. Questions arose about the incidence of U.S. benefits, and their possibly offsetting effects, across different segments of the population. For example, lower income groups may benefit from cheaper imports, while internationally competitive firms, and their higher income workers in particular, benefit from greater exports. Separately, members asked whether benefits materializing on the U.S. side should be matched against any related costs. Members also cautioned that MCC's operational timeline may not align closely with many of the proposed benefit channels. Supply chains require years of coordination and refinement. Meanwhile, MCC compacts typically close within 5 years, leaving little room for long-term prospects to mature.

  One member suggested applying scale factors to MCC's investments to arrive at precisely one single number. Comprised of just a handful of variables-e.g., the partner country's GDP, trade share, and the size of the MCC investment-such a scale factor offers a formulaic approach that is consistent, comparable, and simple to reproduce. Other members, however, urged MCC not to aggregate across different benefit streams or categories that yields a single number capturing the totality of U.S. benefits. Instead, members suggested a multi-faceted approach to quantifying benefits that (along with qualitative narratives) can complement MCC's standard practice for investment assessment using cost-benefit analysis.

  Lastly, members also noted that a narrow focus on quantifiable benefits may create risks around MCC investments being used for the benefit of private firms, underscoring the importance of remaining focused on the agency's statutory mission of poverty reduction through economic growth in partner countries.

• Strategic leverage, qualitative benefits, and narratives. Members stressed the importance of MCC's contribution to U.S influence, foreign policy alignment, and soft power. These entail stronger international relations that underpin trade relations, diplomatic leverage strategic security benefits, and credibility gains as well as positive spillovers from market-oriented policy reforms and reputational effects that aid U.S. investors. Members also noted that MCC investments can help trengthen firm-to-firm relationships between U.S. and partner country investors and entrepreneurs.

  Given the difficulty in quantifying these benefits, members urged MCC to additionally supply a narrative of qualitative benefits. Such narratives could rest on interviews, consultations, and case studies, complemented with broad findings from the research literature.

• Identifying different channels of U.S. benefits. Members of the EAC listed a variety of channels through which benefits to the U.S. economy may be realized. Investments that reduce the import cost of partner country goods, especially intermediate inputs that reduce U.S. production costs, are real and salient for policy purposes. Notably, these imports may affect different U.S. groups differently. Meanwhile, investments that raise partner country GDPs effectively grow foreign markets in which U.S. exporters of goods and services can compete.

  Other members pointed to U.S. strengths in services, e.g., banking, finance, consulting, insurance, technology and digital services and how they are treated in trade models. Members suggested that data and standard trade models may have limited ability to capture service exports that MCC needs to consider. Meanwhile, within goods imports, members highlighted sectors that receive less attention than critical minerals, including agriculture and processed foods such as coffee, spices, and confections that sustain significant segments of the U.S. service economy.

• Assessing American Returns and country selection process. Members discussed how assessing American Returns interacts with MCC's country selection process. One member observed that MCC's selection of a partner country may in itself draw private investors to the country by reducing policy and market risk. In this light, one recommendation emerged to study past compact-induced FDI effects and infer impacts in the future. Relatedly, members asked whether MCC's country selection process embeds the prospect of U.S. benefits sufficiently or whether the investment itself must directly link to a U.S. benefit.
• Competing with China on quality of development assistance. EAC members broadly recognized China's expansive investments and robust trade partnerships, particularly in Africa. Members suggested that MCC, with its comparably smaller budget, could at best modestly influence China's position and clout in partner countries. In this light, members suggested that MCC can lead on "how things get done,"-leveraging transparency, implementation standards, financial sustainability, and partnership sweeteners (e.g., cultural/sports/institutional ties) along with policy and institutional reforms and emphasis on improved governance to influence economic outcomes and sustained growth.

Members Present (In-Person and Online)

• Solly Angel
• Katie Auth
• Shanta Devarajan
• Shahrokh Fardoust
• Raquel Fernandez
• Louise Fox
• Susanna Gable
• Alan Gelb
• Seema Jayachandran
• Adnan Khan
• Mushtaq Khan
• Asim Khwaja
• S. Akhtar Mahmood
• Will Martin
• Ken Opalo
• Lant Pritchett
• Tauhid Rahman
• Paul Smoke
• Mark Sundberg
• Franck Weibe
• Michael Woolcock

Members Not Present

• Caren Grown
• Asli Demirguc-Kunt
• Homi Kharas
• Ravi Kanbur
• Edward Miguel