Aid |
Aid quality is just as important as aid quantity, so the CDI measures gross aid as a share of GDP adjusted for various quality factors: it subtracts debt service, penalizes “tied” aid that makes recipients spend aid only on donor goods and services, rewards aid to poor but relatively well-governed recipients, and penalizes overloading poor governments with many small projects.
United States’ aid performance
Strengths
- Large amount of private charitable giving attributable to tax policy (rank as a share of GDP: 2)
- Prevents project proliferation; larger average project size (rank: 9)
Weaknesses
- Low net aid volume as a share of the economy (0.21%; rank: 19)
- Large share of aid to less poor and worse-governed recipients (selectivity rank: 23)
- Large share of tied or partially tied aid (22%; rank: 18)
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Trade
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International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries.
United States’ trade performance
Strengths
- Low tariffs on agricultural products (4.5% of the value of imports; rank: 3)
Weaknesses
- High barriers against textiles (8.8% of the value of imports; rank: 23)
- High barriers against apparel (9.8% of the value of imports; rank: 23)
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Investment
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Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. The CDI includes a checklist of policies that support healthy investment in developing countries.
United States’ investment performance
Strengths
- Employs foreign tax credits to prevent double taxation of corporate profits earned abroad
- Active participation and leadership in extractive industries transparency initiatives, including the Extractive Industries Transparency Initiative (EITI) and the Kimberley Process on blood diamonds
- Provides support for outflows of portfolio investment
Weaknesses
- Limits political risk insurance to domestically owned firms
- Political risk insurance does not support labor-intensive or sensitive industry and agricultural investments
- Imposes some restrictions on pension fund investments in emerging markets
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Migration
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The movement of people from poor to rich countries provides unskilled immigrants with jobs, income and knowledge. This increases the flow of money sent home by migrants abroad and the transfer of skills when the migrants return home.
United States’ migration performance
Strengths
- Large increase during the 1990s in the number of unskilled immigrants from developing countries living in the United States (rank by share of population: 3)
Weaknesses
- Bears small share of the burden of refugees during humanitarian crises (rank: 21)
- Small number of immigrants from developing countries entering the United States (rank by share of population: 18)
- Tuition for foreign students higher than for nationals
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Environment
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Rich countries use a disproportionate amount of scarce resources, and poor countries are most vulnerable to global warming and ecological deterioration, so the CDI measures the impact of policies on the global climate, fisheries and biodiversity.
United States’ environment performance
Strengths
- Low tropical wood imports ($5.63 per person; rank: 2)
Weaknesses
- High greenhouse gas emissions rate per capita (18.6 tons of carbon dioxide equivalent; rank: 24)
- High fossil fuel production rate per capita (14.4 tons of carbon dioxide equivalent; rank 24)
- Low gas taxes ($0.13 per liter; rank: 27)
- Poor compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 24)
- Has not ratified the Kyoto Protocol on climate change
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Security
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Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, rewards military protection of global sea lanes, and penalizes arms exports to poor and undemocratic governments.
United States’ security performance
Strengths
- Worldwide, has greatest number of military ships stationed in sea lanes that are vital to international trade (rank by share of GDP: 1)
- Significant financial and personnel contributions to internationally sanctioned, non-UN peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 8)
Weaknesses
- High arms exports to poor and undemocratic governments (rank by share of GDP: 23)
- Has not ratified the Comprehensive Nuclear Test Ban Treaty, the Ottawa Treaty to ban anti-personnel landmines, or the Convention on Cluster Munitions (CCM)
- Not a party to the International Criminal Court (ICC)
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Technology
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Rich countries contribute to development through the creation and dissemination of new technologies. The CDI captures this by measuring government support for R&D and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.
United States’ technology performance
Strengths
- High government expenditure on R&D (rank by share of GDP: 5)
- Does not offer patent-like proprietary rights to developers of data compilations, including those assembled from data in the public domain
Weaknesses
- Large share of government R&D expenditure on defense (rank by share of GDP: 27)
- Allows patents on plant and animal varieties
- Allows patents on software programs
- Pushes to incorporate into bilateral free trade agreements “TRIPS-Plus” measures that restrict the flow of innovations to developing countries
- Imposes strict limitations on anti-circumvention technologies that can defeat encryption of copyrighted digital materials
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