The fine folks at the Center for Global Development keep a raptor’s eye on the world of development aid. Each year, they issue a report in conjunction with Foreign Policy magazine, “Ranking the Rich” on their commitment to international development.
Their index is considerably more subtle than the comparisons usually used to determine who’s giving a little and who’s giving a lot of international aid. Large nations like the US point to their overall giving as evidence of their responsibility and generosity. The FP index adds a bit more nuance to this, by considering aid in relation to national GDP. Given the US’s vast GDP, the large amount of aid given – the largest in absolute dollar terms – is small in comparison to the generosity of nations like Denmark, which spend single-digit percentages of their national budget on foreign aid. (The US government allocates $0.19 per citizen per day to foreign aid, as compared to $0.86 in Sweden and $1.06 in Denmark.) The FP index also discounts tied aid – aid that goes to purchase products or services from the donor nation, and aid to dictatorships and nations unlikely to spend the money well. (US aid to Iraq is counted at $0.10 on the dollar to recognize the unlikelihood of most of that money reaching the people it is intended to benefit.)
But while the US does badly on the aid score (2.2 out of 10), the US finishes in the middle of the pack of the world’s 21 donor nations, at 13th. That’s because the index also measures scores in trade, investment, migration, environment, security and technology transfer. In comparison to the largely European competition, the US gets excellent scores in trade and investment, pointing to a willingness to enable private investment in developing nations and comparatively low trade barriers. (While the US continues to heavily subsidize farmers in otherwise unprofitable industries like cotton and sugar, these subsidies are modest compared to European farm subsidies and Japan’s notorious 900% tarrif barrier on imported rice.)
What’s most interesting to me about the index is that none of the nations listed are perfect, or even close to perfect. (And only one, Japan, scores dramatically worse than the others.) The Netherlands, topping the index due to outstanding scores in aid, environment and investment is around average on migration. Nations I’ve never thought of as immigration-friendly – Austria, Switzerland – get high marks for admitting unskilled as well as skilled labor. It’s fascinating to see how many levers nations have that affect development policy, far beyond just trade tarrifs, aid dollars and border control.
Very much worthwhile – the visualization tool CGDev offers on their site to let you explore this year’s findings. You’ll note that the most succesful countries have a strong geographic clustering effect – evidently the Scandinavians and the Low Countries “get” development in a way few other nations do.