Commitment to Development Index

Commitment to Development Index

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The Commitment to Development Index (CDI), published annually by the Center for Global Development
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...

, ranks the world’s richest countries on their dedication to policies that benefit the five billion people living in poorer nations. Rich and poor countries are linked in many ways; thus the Index looks beyond standard comparisons of foreign aid flows. It measures "development-friendliness" of 22 of the world's richest countries, all member nations of the OECD's Development Assistance Committee
Development Assistance Committee
The Organisation for Economic Co-operation and Development's Development Assistance Committee is a forum for selected OECD member states to discuss issues surrounding aid, development and poverty reduction in developing countries...

. The CDI assesses national effort in seven policy areas: aid, trade, investment, migration, environment, security, and technology. It is considered to be a numerical targeting indicator for Goal 8 of the Millennium Development Goals
Millennium Development Goals
The Millennium Development Goals are eight international development goals that all 193 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015...

. It shows that aid is about more than quantity - quality also matters - and that development policy is about more than aid. The Index penalizes countries that give with one hand, for instance through aid or investment, but take away with the other, through trade barriers or pollution.
In 2011, the CDI ranked Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

 number one in the world, followed by Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...

, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...

, and the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

. The United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 is the only member of the Group of 8 richest countries in the world to make the index's top 10. Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

, and South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

 finished at the bottom, partly because of high trade barriers and low levels of foreign aid.

History of the CDI


The CDI is a flagship initiative of the Center for Global Development (CGD)
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...

, a non-profit think-tank based in Washington, DC. In 2003 CGD first published the Index in Foreign Policy magazine with the aim to provoke discussion, highlight gaps in current knowledge, and encourage policy reform. The Index was published annually in conjunction with Foreign Policy through 2006, and since published by CGD alone. David Roodman, Senior Fellow at the Center for Global Development, is the chief architect of the index with research and support from key collaborators for technical work on components. Although the formulas and analysis at the heart of the CDI remain the same, slight methodological changes occur every year and indicators are constantly updated. Originally the CDI ranked 21 countries; South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

 was added in 2008 as their DAC
Development Assistance Committee
The Organisation for Economic Co-operation and Development's Development Assistance Committee is a forum for selected OECD member states to discuss issues surrounding aid, development and poverty reduction in developing countries...

 membership was imminent. In 2008 regional CDIs were also published, assessing donor government policies and engagement to specific regions of the world such as sub-Saharan Africa
Sub-Saharan Africa
Sub-Saharan Africa as a geographical term refers to the area of the African continent which lies south of the Sahara. A political definition of Sub-Saharan Africa, instead, covers all African countries which are fully or partially located south of the Sahara...

 and Latin America
Latin America
Latin America is a region of the Americas where Romance languages  – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...

.

Aid


Foreign aid is the first component of the CDI, assessing both quantity as a percent of GDP and quality. The Index penalizes tied aid
Tied aid
Tied aid is foreign aid that must be spent in the country providing the aid or in a group of selected countries. A developed country will provide a bilateral loan or grant to a developing country, but mandate that the money be spent on goods or services produced in the selected country...

, which requires recipients to spend aid on products from the donor nation and raises project costs by 15 to 30 percent. Aid to poor, better-governed nations is also favored by the CDI. While aid to Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....

—where corruption is more widespread and rule of law is weaker—is counted at 22¢ on the dollar, aid to Ghana
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...

—where poverty is high and governance relatively good—is counted at 97¢ on the dollar. Donors are penalized for overloading recipient governments with too many small aid projects, which burden recipient officials with hosting obligations and regular report filing. Finally, the Index rewards governments for letting taxpayers write off charitable contributions, since some of those contributions go to Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...

, CARE, and other nonprofits working in developing countries.

Trade


International trade
International trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...

 has been a force for economic development for centuries. Because rich-country players call most of the shots in this intensely political process, some goods that poor countries are best at producing, including crops, still face high barriers in rich countries. The trade component of the CDI penalizes countries for erecting barriers to imports of crops, clothing, and other goods from poor nations. It looks at two kinds of barriers: tariffs (taxes) on imports, and subsidies for domestic farmers, which stimulate overproduction and depress world prices.

Investment


The CDI strives to reward rich countries that pursue policies that promote investment that is good for development. It looks at two kinds of capital flows: foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...

, which occurs when a company from one country buys a stake in an existing company or builds a factory in another country; and portfolio investment
Portfolio investment
The purchase of stocks, bonds, and money market instruments by foreigners for the purpose of realizing a financial return, which does not result in foreign management, ownership, or legal control.Some examples of portfolio investment are:...

, which occurs when foreigners buy securities that are traded on open exchanges. The investment component is built on a checklist of twenty questions. Do the rich-country governments, for example, offer political risk insurance, encouraging companies to invest in poor countries whose political climate would otherwise be deemed too insecure? Do they have tax provisions or treaties to prevent overseas investors from being taxed both at home and in the investment country?

Migration


The CDI rewards migration of both skilled and unskilled people, though unskilled more so. It uses data on the gross inflow of migrants from developing countries in a recent year and the net increase in the number of unskilled migrant residents from developing countries during the 1990s. The CDI also uses indicators of openness to students from poor countries and aid for refugees and asylum seekers.

Environment


Rich countries use a disproportionate amount of scarce resources, and poor countries are most vulnerable to global warming
Global warming
Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...

 and ecological deterioration. The environment component looks at what rich countries are doing to reduce their disproportionate use of the global commons. Countries do well if their greenhouse gas emissions are falling, if their gas taxes
Fuel tax
A fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation...

 are high, if they do not subsidize the fishing industry, if they have a low fossil fuel
Fossil fuel
Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...

 rate per capita, and if they control imports of illegally cut tropical timber.

Security


The security component of the CDI compares rich countries on military actions that affect developing countries. The CDI looks at three aspects of the security-development nexus. It tallies the financial and personnel contributions to peacekeeping operations and forcible humanitarian intervention
Humanitarian intervention
Humanitarian intervention "refers to a state using military force against another state when the chief publicly declared aim of that military action is ending human-rights violations being perpetrated by the state against which it is directed."...

s, although it counts only operations approved by an international body such as the U.N. Security Council or NATO. It also rewards countries that base naval fleets where they can secure sea lanes. Finally, the CDI penalizes some exports of arms to nations, especially ones that are undemocratic and spend heavily on the military.

Technology


The technology component of the CDI analyses policies of the rich countries that support creation and dissemination of new technologies, which can profoundly shape life in developing countries. The CDI rewards polices that support the creation and dissemination of innovations of value to developing countries. It rewards government subsidies for research and development
Research and development
The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...

(R&D), whether delivered through spending or tax breaks, while discounting military R&D by half. Also factored in are policies on intellectual property rights (IPRs)
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

 that can inhibit the international flow of innovations. These take the form of patent laws
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

 that arguably go too far in advancing the interests of those who produce innovations at the expense of those who use them. U.S. trade negotiators, for example, have pushed for developing countries to agree never to force the immediate licensing of a patent even when it would serve a compelling public interest, as an HIV/AIDS drug might if produced by low-cost local manufacturers.

Methodology


The CDI ranks 22 countries which are the richest, most developed countries in the world, leaving out tiny countries like Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...

 and Iceland
Iceland
Iceland , described as the Republic of Iceland, is a Nordic and European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. Iceland also refers to the main island of the country, which contains almost all the population and almost all the land area. The country has a population...

. Along with Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...

, the 22 countries constitute the OECD's Development Assistance Committee
Development Assistance Committee
The Organisation for Economic Co-operation and Development's Development Assistance Committee is a forum for selected OECD member states to discuss issues surrounding aid, development and poverty reduction in developing countries...

 which is the official organization of aid donors.

The CDI quantifies a range of rich-country policies in seven policy area. Scores on each component are scaled so that an average score in 2008, the reference year, equals 5.0. A country’s final score is the average of those for each component. The CDI adjusts for size in order to compare how well countries are living up to their potential to help. Data for the CDI come from official sources such as the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

, the Organization for Economic Co-operation and Development, and the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

, or from academic researchers. CGD
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...

 and its collaborators also collect information country by country for parts of the aid, migration and investment components. The 2011 technical paper and spreadsheet provide more detail..

2011 Rankings

colspan="11" | Commitment to Development Index 2011
Rank Aid Trade Investment Migration Environment Security Technology Overall (Average) Change 2003-11
Sweden 1 14.9 6.5 5.6 9.2 8.1 4.4 4.9 7.7 +1.6
Norway 2 12.7 2.6 6.4 8.4 6.5 6.4 5.8 7.0 +0.9
Denmark 3 11.9 6.2 4.7 5.6 7.4 6.1 6.5 6.9 -0.2
Netherlands 4 11.5 6.6 6.0 4.9 7.3 5.3 5.2 6.7 +0.2
United States 5 3.1 7.4 5.3 4.9 4.4 13.8 5.6 6.4 +2.2
Finland 6 7.3 6.6 4.9 3.8 8.4 5.9 6.1 6.1 +1.1
New Zealand 7 3.3 8.1 4.7 6.1 6.4 8.7 4.9 6.0 +0.3
Austria 7 3.9 6.5 4.0 11.1 6.7 4.2 5.5 6.0 +0.6
Portugal 9 2.8 6.5 5.4 4.0 7.3 5.7 7.0 5.5 +1.0
Ireland 9 8.6 6.1 3.1 4.1 7.4 5.2 4.0 5.5 +0.4
Australia 9 4.1 7.7 6.1 4.0 4.2 7.0 5.3 5.5 -0.1
United Kingdom 12 7.0 6.3 6.4 3.5 7.7 2.7 5.3 5.5 -0.1
Canada 12 4.2 6.7 6.1 6.2 3.4 5.3 5.7 5.4 +0.4
Spain 14 4.8 6.4 6.0 4.6 6.6 2.8 5.9 5.3 +1.0
Germany 14 4.0 6.3 6.4 4.8 7.2 3.5 4.7 5.3 +0.3
Belgium 16 7.0 6.3 5.6 4.0 7.6 1.4 4.7 5.2 +0.7
France 16 4.3 6.4 5.3 3.4 7.4 3.3 6.1 5.2 +0.6
Switzerland 18 5.7 3.2 4.6 7.9 6.3 2.7 5.0 5.1 +0.5
Greece 19 2.3 6.3 4.0 6.8 6.9 5.1 2.7 4.9 +1.1
Italy 20 2.0 6.5 5.6 3.7 7.0 4.7 4.5 4.8 +0.5
Japan 21 1.5 3.3 4.9 1.8 5.7 2.0 6.3 3.7 +1.1
South Korea 22 1.0 2.8 5.9 1.0 2.8 1.7 6.8 3.1 N/A

Collaborators


CGD commissions background papers and research for most of the components. However, final design responsibility rests with CGD and the CDI does not necessarily represent the views of contributors.

• David Roodman, Senior Fellow, Center for Global Development
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...

 (Chief Architect)

• Theodore Moran, Non-Resident Fellow, Center for Global Development
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...

 (Investment)

• Kimberly Hamilton and Jeanne Batalova of the Migration Policy Institute
Migration Policy Institute
The Migration Policy Institute is a Washington, D.C.-based think tank established in 2001 by Kathleen Newland and Demetrios G. Papademetriou. It is "an independent, non-partisan, non-profit think-tank dedicated to the study of the movement of people worldwide." The Migration policy Institute works...

 (Migration)

• B. Lindsay Lowell and Victoria Carro of Georgetown University’s
Georgetown University
Georgetown University is a private, Jesuit, research university whose main campus is in the Georgetown neighborhood of Washington, D.C. Founded in 1789, it is the oldest Catholic university in the United States...

 Institute for the Study of International Migration (Migration)

• Amy Cassara and Daniel Prager of the World Resources Institute
World Resources Institute
The World Resources Institute is an environmental think tank founded in 1982 based in Washington, D.C. in the United States.WRI is an independent, non-partisan and nonprofit organization with a staff of more than 100 scientists, economists, policy experts, business analysts, statistical analysts,...

 (Environment)

• Michael O'Hanlon and Adriana Lins de Albuquerque of the Brookings Institution
Brookings Institution
The Brookings Institution is a nonprofit public policy organization based in Washington, D.C., in the United States. One of Washington's oldest think tanks, Brookings conducts research and education in the social sciences, primarily in economics, metropolitan policy, governance, foreign policy, and...

 (Security)

• Jason Alderwick and Mark Stoker, formerly of the International Institute for Strategic Studies
International Institute for Strategic Studies
The International Institute for Strategic Studies is a British research institute in the area of international affairs. It describes itself as "the world’s leading authority on political-military conflict"...

 (Security)

• Keith E. Maskus of the University of Colorado at Boulder
University of Colorado at Boulder
The University of Colorado Boulder is a public research university located in Boulder, Colorado...

 (Technology)

Criticism


The Commitment to Development Index has received much media attention over the years and has sparked criticism and discussion among a wide range of audiences. One of the most frequent comments, voiced by the Japanese Ministry of Foreign Affairs
Ministry of Foreign Affairs (Japan)
The is a cabinet level ministry of Japan responsible for the country's foreign relations.The ministry is due to the second term of the third article of the National Government Organization Act , and the Ministry of Foreign Affairs Establishment Act establishes the ministry...

, questions the selection of the seven components.. The ministry argues that several categories may be extraneous when measuring contributions to poverty reduction. The equal weighting of components in the Index is also questioned; the CDI fails to take into account different degrees of impact, thus assuming that foreign aid and migration have equal effects on development. To continue the conversation, David Roodman responded in a blog post to such comments. Experts have also written papers on how to improve the CDI and proposed similar measures.

External links


1. Center for Global Development website

2. Commitment to Development Index

3. 2011 Technical Paper for the CDI