Press Release

Policies of Rich Countries Still Doing Little for the World’s Poor: Modest Progress on the Environment Bucks Disappointing Trend

November 18, 2013
Share

FOR IMMEDIATE RELEASE
November 18, 2013

 

Policies of Rich Countries Still Doing Little for the World’s Poor 
Modest progress on the environment bucks disappointing trend

 

[WASHINGTON DC] – Wealthy countries have a long way to go to improve policies that support shared global prosperity, according to a Center for Global Development (CGD) index published today.

The Commitment to Development Index (CDI) uses hundreds of indicators to rank wealthy governments by how their policies affect poorer countries in seven areas: aid, trade, finance, migration, environment, security, and technology transfer. Countries whose policies are more helpful for developing countries rank higher in the index.

Denmark leads the world once again in the 2013 Commitment to Development Index as the country with the best overall policies to support international development. It comes just ahead of its fellow Scandinavian countries, Sweden and Norway.  The United Kingdom, in seventh place overall, has the most development-friendly policies of the G-7 major economies.  

The CDI shows that there has been little overall improvement in the policies of OECD countries over the 11 years that the index has been calculated. Consistently measured over time, the scores for aid, migration, trade and technology transfer are about the same as they were when the Index was first calculated in 2003, and rich country policies to support global security are distinctly worse.

The average score for security has declined mainly because contributions to international peacekeeping have fallen, and to a lesser extent because arms exports to undemocratic regimes have increased. Norway, Denmark and New Zealand have the highest security scores, mainly in recognition of their significant contributions to internationally-sanctioned peacekeeping. Sweden has the lowest score on security, mainly because in proportion to the size of its economy it reports the highest level of arms exports to poor and undemocratic governments.

Environment, the only component to show significant improvement, has got better mostly for reasons not related to global warming: namely, the success in reducing the emissions of chemicals that harm the protective ozone layer following the international agreement to the Montreal Protocol. Ironically, Canada, the only country whose environment policies have deteriorated since the index began, has now pushed the United States out of last place, in part because of rising fossil fuel production, increasing per capita emissions and low gasoline (petrol) taxes.  Slovakia and Hungary take top place in the environment standings with the highest gasoline taxes of CDI countries and greenhouse gas emissions among the lowest.

At the bottom of the index, South Korea, which joined the OECD in 1996, has been improving recently, and appears to be poised to overtake Japan in the coming years. Both countries score particularly badly in trade policy because of their high tariffs on imports from developing countries, especially rice. But both countries do relatively well at promoting technology transfer to poorer nations.

The way the Index is calculated continues to improve as new data become available and in response to changes in understanding of the ways that rich countries’ policies affect development. In response to growing concern about problems associated with financial secrecy, including corruption and illicit financial flows, a new finance component replaces the investment component and includes for the first time data from the Financial Secrecy Index.  Finland, Sweden, Denmark, Spain, and Poland have the highest scores in the finance component because of their transparent financial sectors, support to investment in developing countries, and membership in the Extractive Industries Transparency Initiative (EITI). Switzerland, with its tradition of banking secrecy, ranks at the bottom.

The trade component has been updated with new measures of non-tariff barriers drawn from the World Bank Doing Business Survey, such as the days it takes to import a shipment and how much paperwork is required.  The migration component uses new data from the OECD.

There is wide variation in scores between countries, which suggests that improvements are possible if countries learn lessons from each other in each policy area.  For example, if every nation pursued trade policies as development-friendly as New Zealand, or made the same proportionate contribution to global security as Norway, they would collectively be doing much more to create the conditions for growth and poverty reduction in the poorest nations.  

“The international community has made repeated promises to pursue better policies for the developing world, including in Monterrey, Gleneagles and Busan,” said Owen Barder, CGD senior fellow and director for Europe, who is responsible for preparing the Index. “But the data show that progress so far has been disappointing. The international community is discussing what kind of shared commitments to development it wants to put in place after 2015: they should include quantified, country-specific commitments on the part of wealthy countries to get their house in order.”

“The Index is a powerful reminder that rich world support for development is about much more than aid,” said Nancy Birdsall, president of CGD. “There are many ways for high income countries to help foster shared growth in the poorest countries. Many of the necessary policy changes are good for the rich countries themselves and don’t cost them a cent.”

“This report also reminds us of how much more we can do,” Birdsall continued. “What we see are slight improvements, but overall industrialized countries, and the largest, richest nations in particular, fall well short of their potential.”

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.  2013 CDI Overall Scores

3.  Five new countries were added to the index in 2012: the Czech Republic, Hungary, Luxembourg, Poland and Slovakia. South Korea was added in 2008.

4.  More Information. Visit cgdev.org/cdi for the complete 2013 CDI edition. You can view the numbers with our interactive graphing tool as well as additional publications and background papers.

5.  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 small European programme based in London.

6.  Media Contact. Catherine An - can@cgdev.org or (+1 202) 416-4040.