Ranking the Rich: The 2006 Commitment to Development Index

Event Title: Ranking the Rich: The 2006 Commitment to Development Index
Sponsors: International Resources Group (IRG), Society for International Development- Washington Chapter (SIDW)
Location: IRG
Date: September 21, 2006
Time: 10:00 AM - 11:00 AM
Approximate number of Attendees: 14
Intern Attending: Ashley Smith

Featured Speaker: David Roodman, Research Fellow at the Center for Global Development, Chief Architect of CDI

David Roodman discussed The Commitment to Development Index, a method of ranking countries according to their overall contributions to developing countries. The country’s scores are determined by qualitative and quantitative measures in seven categories: aid, trade, investment, migration, environment, security and technology.
1) Aid – This refers to direct foreign aid given to developing countries. Countries receive negative points when this aid is tied to contingencies, as is the case for the United States, which attaches strings to 80% of its aid. Countries receive higher points if they give aid to poor, well-governed countries verses dictatorships. Additionally, if governments provide incentives, like tax write-offs, they receive positive points.

2) Trade - Low tariffs, minimal quotas, low subsides for farmers, and high imports from less developed countries are looked at favorably. Japan ranks the lowest in this category because their rice tax is almost 900%.

3) Investment - Countries are rewarded for political risk insurance, international work against bribery (including not giving money to finance corruption, including conflict diamonds), and rules against double taxation.

4) Migration – Countries are rewarded for allowing immigration from developing countries, especially of non-skilled workers. This includes accepting a high percentage of foreign students from developing countries and not charging them higher tuitions, as well as providing aid to refugees and asylum seekers. Austria and Switzerland rank high in this category due to their acceptance of large numbers of immigrants from former Yugoslavia.

5) Environment – Low emissions, high gas tax, low fishing subsidies, and low tropical timber imports are all rewarded. The United States ranks the lowest here, in large part for its failure to ratify the Kyoto Protocol.

6) Security – Giving money and personnel to UN peacekeeping missions, not exporting arms to non-democratic states, and protecting sea lanes for global trade all generate positive points. Norway ranks number one in this category for being a high UN donor and Australia ranks second for its personnel contributions to peacekeeping in East Timor.

7) Technology – Countries receive positive points for public spending on research and development and for not extending intellectual property rights— for example, providing drug protection for 10 years, when the international norm is only five.

Overall, the United States ranked high in areas where a hands off approach is awarded verses the countries who topped the list, who received points in areas where active government intervention is rewarded. The highest ranking G7 member is Germany at number nine and the United States, as world leader, at number eleven. This tells us that the countries with the highest capacity to help do the least. However, it should be noted that the United States saw an increase in positive aid from 2003-2006.