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The main findings:
- Denmark has the most development-friendly policies.
- UK is the only G7 country in CDI’s top 5.
- South Korea and Japan rank lowest of 27 countries measured.
- US policies on migration and environment reduce its ranking to 19th of 27.
- All rich countries could improve their policies in ways that would help themselves as well as helping developing countries.
CDI explained:
How much do rich countries’ policies help or hinder the world’s poorest people? That’s the question posed by the Center for Global Development in its annual Commitment to Development Index, now in its 11th year.
The conclusion: the world’s richest countries could do significantly more to build global prosperity by implementing more coherent, development-friendly policies. And those policies would be good for rich countries themselves too.
The CDI ranks 27 of the world’s richest countries according to their performance in seven policy areas – aid, trade, finance, migration, environment, technology and security.
Why the CDI is Important:
The CDI reflects the fact that development is affected by more than how much aid a country gives.
“The Commitment to Development Index reminds us that development policy is about much more than aid. In an interdependent global system, rich country policies on immigration, climate, trade, tax, and anti-bribery enforcement matter enormously for developing countries’ prospects,” said CGD President Nancy Birdsall. “Although we’ve seen an increase in aid in the last decade, in other areas, such as intellectual property rights, rich countries’ policies have made development harder.”
The CDI combines more than a hundred different indicators of rich countries’ policies. Most countries do well in some categories but badly in others. Thus the CDI provides valuable information to rich countries about what policy areas they could focus on to make more of a difference to the lives of the global poor – as well as benefit their own economies. If countries all improved their policies in areas where they are lagging, that alone would have a big impact on development.
“We should stop thinking of development policies as sacrifices that rich countries need to make for poor countries”, said Owen Barder, director of CGD’s Europe office and author of the CDI. “It is in all our interests to collect taxes that are due; generate and spread new ideas and knowledge that enrich all our lives; protect our planet; build institutions that make our world safer and fairer; and from a fair and open trading system. What gets measured gets done – in 2015 the world must agree how to measure progress on these issues.”
There are three big summits in 2015 which offer key opportunities for rich countries to improve their policies that have global impacts. With the Millennium Development Goals expiring, nations must agree on new ways to finance development at a major meeting in July; a new international development framework through the Sustainable Development Goals in September; and on a global framework to tackle climate change in Paris in December.
“We know that progress is possible and that the advanced economies have plenty of room to do better,” said Birdsall. “I hope leaders of the CDI countries bring specific commitments to more development-friendly policies to the major development conferences this year.”
CDI Breakdown Across 7 Categories of Development
Aid: Denmark ranks best on aid not only because it provides 0.83 percent of its GDP in foreign assistance, but because its aid is of high quality. Given its small aid budget relative to the size of its economy, South Korea ranks worst.
Trade: How easily developing nations can trade with rich countries is an important driver of development; New Zealand scores highest in this category thanks to having the lowest tariffs on developing countries’ imports and few legal restrictions on the purchase of services from abroad. Because of its high tariffs and substantial legal restrictions on services from other countries, South Korea ranks last.
Finance: Finland does best on finance because of its financial transparency, which helps reduce opportunities for tax evasion and corruption, and support to investment in developing countries. Switzerland, which lacks financial transparency, comes in last.
Migration: Sweden takes first place in migration, accepting the most migrants for its size and bearing a large share of refugee burden, unlike last-ranked Slovakia.
Environment: Slovakia ranks at the top on environment because of its high gas taxes and low greenhouse gas emissions. Canada again ranks last on environment primarily because it has high fossil-fuel production.
Security: On security, Norway is rewarded for its high contribution to peacekeeping, minimal arms exports, and participation in security treaties. South Korea, by contrast, is at the bottom because it contributes little to international peacekeeping, does not publish arms exports data, and has failed to ratify major international security treaties.
Technology: Denmark, which spends more than one percent of its GDP on research and development, ranks top on technology. Poland ranks last, spending only 0.35 percent.
Notes to Editors:
1. About the Commitment to Development Index (CDI). The CDI has been compiled each year since 2003 by the Center for Global Development. It ranks the world’s richest countries on policies that affect the more than five billion people living in poorer nations. The Index scores policies in seven areas:
- Quality and quantity of foreign aid
- Openness to trade
- Policies that encourage investment and financial transparency
- Openness to migration
- Environmental policies
- Promotion of international security
- Support for technology creation and transfer
2. How the Index is calculated continues to improve, ensuring the methodology reflects current understandings of the ways rich countries’ policies impact the world behind their borders. This year’s improvements included an updated aid component, which is now based on CGD’s Quality of Official Development Assistance (QuODA). The aid component, therefore, is determined by an equally weighted average of how much countries give in aid and the quality of that aid. While Luxembourg is the most generous country – providing one percent of its GDP for development assistance – Ireland ranks number one on aid quality.
3. More Information. Visit www.cgdev.org/cdi for the complete 2014 CDI edition. You can view the numbers with our interactive graphing tool as well as additional publications and background papers.
4. About CGD. The Center for Global Development is an independent, non-partisan think tank which works to reduce global poverty and inequality through world-class research and an active engagement with the policy community. CGD is headquartered in Washington, DC and has a Europe program based in London.
5. Media Contact. Lauren Post: lpost@cgdev.org, (+1 202) 416-4040