Can Governments Create Bureaucratic Structures That Overcome Knowledge and Incentive Problems? An Analysis of the Millennium Challenge Corporation

Abstract

The recent formation of the Millennium Challenge Corporation represents an attempt by the government to create a bureaucracy that claims to be aware of and to have corrected the major problems often cited by critics of bureaucracies in general and of aid bureaucracies in particular. This thesis examines the unique institutional design of the Millennium Challenge Corporation and evaluates whether or not such an organizational design is capable of overcoming both the knowledge and incentive problems facing government agencies as laid out by the Public Choice and Austrian Schools of Economics.