If you were asked which countries in the world were most committed to the development of the poorest countries, you might think first about sheer generosity. You might think of the United States, which, in absolute value, donates more in foreign aid than any other country in the world. Last fiscal year, it gave out $30.7 billion, a figure that dwarfs other nations’ entire economies.
But what about the U.S.’ high greenhouse gas emissions and fossil fuel production, which exacerbate climate change and have dangerous effects on the poor and vulnerable in the global south? Or Trump-era trade restrictions that disadvantage developing economies? Or its narrowing acceptance of migrants from low-income countries?
Development is much more than just aid. So-called charitable countries often give aid with one hand and take away with the other, implementing policies that make the rest of the world a less fair, less safe place — especially for those who receive their aid in the first place.
The Center for Global Development, an international think tank based in Washington D.C., attempts to capture this complexity in its Commitment to Development Index (CDI), which it initiated in 2003. This index scrutinizes 27 of the world’s richest countries on their policies’ effects on poor countries, both direct and indirect. Notably, aid is only one of many components: the index also considers trade, migration, finance, security, environment, and technology.
CGDev just released the 2018 edition of the CDI today. This year, Sweden topped the charts, followed by longtime leader Denmark. The countries that performed worst were Poland, Greece, and South Korea. The U.S. came in 23rd out of 27.
To get a sense of what the 2018 rankings tell us, BRIGHT Magazine spoke with Anita Käppeli, CGDev’s director of policy outreach for Europe, who composed and led the development of the CDI.
BRIGHT: Why is it important to expand notions of development beyond “foreign aid?”
Anita Käppeli: First of all, it’s important for people to be aware that if poor countries are to truly participate equally, they need more than aid. They need to be able to trade easily, they need to be supported in the provision of global security, and they need support to adapt to climate change. Building greater prosperity and security helps us all, and in order to do so, we need much more than foreign aid.
BRIGHT: Who are the worst offenders in terms of talking up a big aid game but actually pursuing policies that impoverish developing countries?
AK: [laughs] Our goal is not to shame but to encourage mutual learning.
BRIGHT: “Worst offenders” may be a bit strong. That was the self-contemptuous American in me.
AK: I do think the United States is one obvious example. The U.S. is the biggest contributor to foreign aid in absolute terms, but we adjust based on the size of the economy, so they don’t get a lot of credit for that. We have various indicators where we adjust for gross domestic product or size of population to make it comparable. Otherwise it’d be hard to encourage small countries, for example, to learn from the U.S. or the other way around.
Another interesting example is South Korea, which is at the bottom of the table this year — overall, and also specifically on trade, environment, and security. At the same time, it ranks at the top of the technology component because South Korea invests a lot into research and development. The innovations that come from that, like vaccines and mobile technology, have advantages for people in poor countries. So a country that lacks in some aspects of the index could actually significantly further global public good in another aspect.
BRIGHT: The CDI doesn’t weigh all forms of aid equally. Could you give some examples of giving behaviors that don’t score well on the index, and why?
AK: We look at the quality of official development assistance. The 8-quality measure is made up of 24 different indicators. We penalize for tied aid — when aid is bound to conditions like using a donor’s own companies. We also encourage coordination and collaboration among donors, which not only reduces overlap, waste, and fragmentation, but lightens the burden on recipient countries.
We encourage multilateral spending not only because it is generally more efficient (i.e., money that’s managed by international organizations like the United Nations), but also because it is less tied to national interests than bilateral spending (i.e., money that goes directly from one government to another). For example, even though the U.S. ranks bottom in aid because of the poor quality of its aid — it spends only 17% multilaterally — much of their multilateral giving is to the Global Fund, which ranks high in efficiency. That gives their score a slight boost.
We also look at the share of funds given to well-governed countries. In the security component, we penalize for arms exports that don’t go to democratic countries. Arms exports is a provision of security, but there is a balance between having arms and having a functioning security apparatus.
BRIGHT: Critics of indices like the CDI often argue that they tend to oversimplify complex issues into juicy headlines. What are indices useful for? Are there recent examples of resulting policy or funding shifts?
AK: Indices are actually good for starting conversations which, especially in times like these, tend to get lost when we talk about simple solutions in black and white.
For example, we can start a conversation about why two peers — directly neighboring countries with similar population sizes and economic structures — score very differently, and which policies contributed to that.
Without naming the specific countries where this happened, we were able to start conversations about migration policies by talking about student visas. Despite the current rhetoric focusing on mostly humanitarian aspects of migration, access for students from developing countries is something that many people find they are open to. Discussing the difference in peers’ policies [regarding student visas], highlighted by this index, causes people to rethink their stance on accepting those with more credentials, or perhaps to encourage universities to offer courses in one of the U.N. languages to enable access to foreign students. This has led to a shift in perception that migration is so much more than what we normally talk about.
BRIGHT: In this year’s report, have you noticed any significant trends, and if so, what global or regional shifts would you say contributed to them?
AK: A disclaimer we always add is we don’t compare different editions. A drop in rank does not necessarily mean worse performance; it could also be that the methodology changed from year to year.
What we do see in 2018 which is significant, as it happened the first time — even while comparing different editions and different methodology — is that Germany is in position 3, jointly with Finland. This is the first time ever that a G7 country, one of the world’s economic powerhouses, can be found in the top 3. Germany has really advanced in terms of trade and migration, and this is something worth noting.
The other thing is the first 12 positions are all occupied by European countries. Obviously, a lot of Nordic countries have always been at the top, but the fact that the top 12 are all European is interesting to us.
In terms of individual performances, I find the case of Portugal interesting. Out of the 27 countries that we consider, it is one of the poorest, if not the poorest, in terms of GDP per capita. And still, Portugal always does really well. This year it is in position 9, but it’s been in the top 10 for quite a few years. This demonstrates that leading on the CDI isn’t just for the richest, even within the “rich club” of countries we’ve selected for the CDI.
BRIGHT: Last year was the 15-year anniversary of the CDI Index. You wrote then that “increasing importance of other development actors like China, the changing nature of development, and better data availability on global issues,” would prompt CGDev to review the structure of the CDI over the next couple of years. Have any of those changes begun to come into play?
AK: This year’s CDI is most likely going to be the last of its kind. In the next two years, we want to take up a few of those issues you mentioned. We do want to consider new, emerging development actors like China and Russia. When the index was created, we tried to include what seemed to matter most to the lives of people in poor nations, and as the index is evidence-based, we want to look back at the evidence and evaluate what matters most now. We want to look potentially at global public goods, and something we’ve been discussing more is tax issues.
Whatever we do, the index will probably remain one that measures policy efforts and not necessarily outcomes. I also think — though obviously I can’t foresee what it will look like in two years — we will continue to assess the impact of richer, more powerful countries on others. While other indices like the Sustainable Development Goals focus on many more different nations, the CDI highlights the larger impact of more advanced economies on others, and the spillovers that are most important to measure.
BRIGHT: In at least a few of the CDI countries, electorates are increasingly putting pressure on leaders to turn inwards and focus resources on domestic issues, a trend which seems at odds with CDI’s entire premise that rich countries ought to take responsibility for making the world better for everyone. What are your thoughts on this?
AK: What we see is something that, personally, does worry me. This year’s index leader, Sweden, recently held an election in which populist, nationalist tendencies made strong appearances.
In terms of global and individual prosperity, it’s important to underline that many of the policies that we look at in the CDI are ones that help us all. In terms of recent policy changes like emerging trade wars, it is the case that more trade is good for most people, if not all. So I find it, personally, surprising to see how these “win-win policies” are starting to lose support. In terms of security, where we’re seeing a shift into a world where the U.S.’ security contribution might decrease. Things like open or protected sea lanes, again, encourage more international trade and greater prosperity for all.
We hope that tools like the CDI help to have a conversation about the fact that some policies which are good for poor countries are also good for more advanced economies.
A summary of the 2018 results is available online here, and the full 2018 rankings and analysis of each country here.
