Link of the Day 012108: Commitment to Development Index

From the Center for Global Development:

Rich and poor countries are linked in many ways by foreign aid, commerce, migration, the environment, and military affairs. The Commitment to Development Index (CDI) rates 21 rich countries on how much they help poor countries build prosperity, good government, and security. Each rich country gets scores in seven policy areas, which are averaged for an overall score.

Here are the overall rankings, as well as scores for aid, environment and technology. Visit the site to see info on Trade, Investment, Migration and Security.

Foreign Aid

Commitment to Development Index: Aid

Most comparisons between donors are based on how much aid each gives, either in absolute terms or as a percentage of GDP. For the CDI, quantity is merely a starting point in a review that also assesses aid quality. The Index penalizes “tied” aid, which recipients are required to spend on products from the donor nation; this prevents them from shopping around and raises project costs by 15–30 percent. The Index also subtracts debt payments the rich countries receive from developing countries on aid loans. And it looks at where aid goes, favoring poor, uncorrupt nations. Aid to Iraq, for instance, is counted at 10¢ on the dollar, since in Iraq corruption is rampant and rule of law weak. Aid to Mozambique, on the other hand, with its high poverty and relatively good governance, is counted at 77¢ on the dollar. Finally, donors are penalized for overloading recipient governments with too many small aid projects. When projects are many and recipient officials few, the obligation to host visits from donor officials and file regular reports becomes a serious burden.

Environment

Commitment to Development Index: Environment

The U.S. with its “Global Warming? Pschaw!” and non-Kyoto signing ways is dead last.

The environment component looks at what rich countries are doing to reduce their disproportionate exploitation of the global commons. Are they reining in greenhouse gas emissions? How complicit are they in environmental destruction in developing countries, for example by importing commodities such as tropical timber? Do they subsidize fishing fleets that deplete fisheries off the coasts of such countries as Senegal and India?

Technology

Commitment to Development Index: Technology

The Index rewards polices that support the creation and dissemination of innovations of value to developing countries. It rewards government subsidies for research and development (R&D), whether delivered through spending or tax breaks. Spending on military R&D is discounted by half. On the one hand, much military R&D does more to improve the destructive capacity of rich countries than the productive capacity of poor ones. On the other, military security is important for development, and military R&D can have civilian spin-offs. Consider that the Pentagon partly funded the early development of the Internet.

Also factored in are policies on intellectual property rights (IPRs) that can inhibit the international flow of innovations. These take the form of patent laws that arguably go too far in advancing the interests of those who produce innovations at the expense of those who use them. Some countries, for example, allow patenting of plant and animal varieties. In such countries, a company could develop a crop variety, say, that thrives in poor tropical soils, patent it, and then opt not to sell it because the poor who could use it have inadequate buying power.

Overall

Commitment to Development Index: Overall
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