Ideas and Change in US Foreign Aid: Inventing the Millennium Challenge Corporation

Recent scholarship on foreign policy change focuses on the role of ideas in altering policies and related governing institutions. While a welcome antidote to the previous preoccupation with static analysis, this research has yet to provide adequate understanding of whether and how ideas produce change in specific instances. This study seeks to narrow this gap by examining a recent program change in U.S. foreign aid policy: the creation in 2004 of the Millennium Challenge Corporation (MCC), an independent agency designed to reward the world's most impoverished countries that had previously undertaken neoliberal economic reforms and democratic political reforms. The study identifies a convergence of widely shared principled and causal beliefs which, mediated through U.S. domestic structures, produced the most significant change in U.S. aid strategy and structures in nearly half a century. In melding societal theories that emphasize the role of transnational norm diffusion with theories of domestic politics, the study answers the call for multilevel explanations of foreign policy change. And by applying constructivist notions of ideas and discursive framing with rationalist conceptions of power and interests, the study further responds to the need for theoretical synthesis in the study of foreign policy.