Ideas to Action:

Independent research for global prosperity

New Zealand

2013

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.

New Zealand’s aid performance

  • Score: 3.4
  • Rank: 15

Strengths

  • Large share of aid to poor and better-governed recipients (selectivity rank: 6)
  • Prevents project proliferation; large average project size (rank: 8)
  • Large amount of private charitable giving attributable to tax policy (0.01% of GDP; rank 6)
Weaknesses
  • Low net aid volume as a share of the economy (0.28%; rank: 17)

Trade

International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries. It also penalizes costly importation processes and restrictions against purchasing services from foreigners.

New Zealand’s trade performance

  • Score: 8.1
  • Rank: 1

Strengths

  • Low agricultural subsidies (equivalent to a tariff worth 0.9% of the value of imports; rank: 3)
  • No tariffs on rice, wheat, sugar, and beef (0 % of the value of imports; rank: 1)
  • Few limitations on the importation of services (Services Trade Restrictions Index score: 10.3; rank: 1)
  • Relatively low cost to import a shipping container ($855 per container; rank: 6)
Weaknesses
  • High tariffs on textile (14.6 % of the value of imports; rank: 27)
  • High tariffs on clothing (7.9 % of the value of imports; rank: 22)
  • Many days to import a shipping container (6 days; rank: 21)
 

Finance

Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. Conversely, policies that permit financial secrecy of companies and banks can facilitate illicit activities and financial flows abroad. The CDI rewards policies that support healthy investment in developing countries and promote transparency in financial transactions at home.

New Zealand’s finance performance

  • Score: 4.3
  • Rank: 22

Strengths

  • Provides assistance to companies looking for investment opportunities in developing countries
  • Vigorous prosecution of home-country bribe payers
Weaknesses
  • Does not have Political risk insurance agency
  • Weak participation and leadership in extractive industry transparency initiatives
 

Migration

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.

New Zealand’s migration performance

  • Score: 6.7
  • Rank: 8

Strengths

  • Large number of immigrants from developing countries entering New Zealand (rank by share of population: 2)

Weaknesses

  • Bears small share of the burden of refugees during humanitarian crises (rank: 21)

Environment

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.

New Zealand’s environment performance

  • Score: 6.0
  • Rank: 19

Strengths

  • No fishing subsidies (rank: 1)
  • Low tropical timber imports ($7.14 per capita equivalent: rank: 3)
Weaknesses
  • High greenhouse gas emissions rate per capita (16.6 tons of carbon dioxide equivalent; rank: 19)
  • Greenhouse gas emissions grew almost as fast as GDP over the last decade (average annual growth rate/GDP, -1.08%; rank: 27)
  • Low gas taxes ($0.58 per liter; rank: 24)
 

Security

Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, military protection of global sea lanes, and participation in international security treaties. It also penalizes arms exports to poor and undemocratic governments.

New Zealand’s security performance

  • Score: 7.3
  • Rank: 3

Strengths

  • Significant personnel contributions to UN peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 3)
  • Participates in major international security treaties and regimes
  • No arms exports to poor and undemocratic governments (rank by share of GDP: 1)
Weaknesses
  • No protection of global sea lanes

Technology

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.

New Zealand’s technology performance

  • Score: 4.4
  • Rank: 19

Strengths

  • Will force patent holders to license to meet social needs
  • Restricts copyrighting of databases
  • Provides patent exceptions for research purposes
Weaknesses
  • Low government expenditure on R&D (rank by share of GDP: 21)
  • Low tax subsidy rate to businesses for R&D (rank: 26)
  • Allows patents on plant and animal varieties