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.
Germany’s aid performance
Strengths
- Large amount of private charitable giving attributable to tax policies (rank by share of GDP: 8)
Weaknesses
- Contributes to project proliferation; small average project size (rank: 23)
- Large share of aid to less poor and relatively worse-governed recipients (selectivity rank: 19)
- Large share of tied or partially tied aid (21.7%; rank: 17)
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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.
Germany’s trade performance
Strengths
- Low tariffs on textiles (6.4% of the value of imports; rank: 3)
- Low tariffs on apparel (6.4% of the value of imports; rank: 3)
- High level of manufactures imports from poorer countries (10.1% of GDP per capita; rank: 4)
Weaknesses
- High agricultural subsidies (equivalent to a tariff worth 13.0% of the value of imports; rank: 18)
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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.
Germany’s investment performance
Strengths
- Employs tax treaties to prevent double taxation of corporate profits earned abroad
- Particularly active in Extractive Industries Transparency Initiative (EITI) and the Kimberley Process on blood diamonds
- Vigorous prosecution of home-country bribe payers
Weaknesses
- Does not provide support for outflows of portfolio investment
- Political risk insurance also given to inefficient, import-substituting projects
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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.
Germany’s migration performance
Strengths
- Bears large share of the burden of refugees during humanitarian crises (rank: 3)
- Moderate number of immigrants from developing countries entering Germany (rank by share of population: 10)
- Tuition for foreign students the same as 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.
Germany’s environment performance
Strengths
- No fishing subsidies (rank: 1)
- Low consumption of ozone-depleting chemicals per capita (rank: 1)
- High compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 3)
Weaknesses
- Greenhouse gas emissions grew almost as fast as GDP in 2000-2010 (average annual growth rate/GDP, -1.9%; rank: 19)
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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.
Germany’s security performance
Strengths
- Military ships stationed in sea lanes that are important to international trade (rank by share of GDP: 6)
- Participates in major international security treaties and regimes
Weaknesses
- Small personnel contributions to UN and other internationally sanctioned peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 21)
- High arms exports to poor and undemocratic governments (rank by share of GDP: 20)
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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.
Germany’s technology performance
Strengths
- High government expenditure on R&D (rank by share of GDP: 6)
Weaknesses
- Low tax subsidy rate to businesses for R&D (rank: 26)
- Large share of government R&D expenditure on defense (4.0%; rank: 20)
- Does not force patent holders to license to meet social needs
- Offers patent-like proprietary rights to developers of data compilations, including those assembled from data in the public domain
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