A closer look at rich countries’ commitment to development

A number of European countries once again topped an index that looks at how donors are “living up to their potential” to support the development of poor countries. But Europe’s performance as a whole still has room for improvement.

The results of the 2012 Commitment to Development Index could be fodder for debate at the upcoming European Development Days, where top European aid officials will gather to discuss the future of European development cooperation.

The index, published annually by U.S.-based think tank Center for Global Development, looks at how aid, trade, migration, investment security and technology policies of 27 wealthy countries affect development and well-being in poor countries.  These seven areas are given equal weight in computing a country’s overall score because all factors influence development, CDG says.

As with last year’s index, the Nordic countries Denmark, Norway and Sweden came on top. David Roodman, CDG senior fellow and architect of the index, attributed the consistently good performance of these countries in the annual ranking to their high spending on aid relative to income, their sound environmental policies, strong sense of internationalism and willingness to engage in international issues.

The next four countries in the ranking are also from Europe: Luxembourg, Austria, the Netherlands and Finland. It’s worth noting, however, that Austria’s overall score was largely lifted by its high score in terms of migration policy.

CGD, for the first time, also attempts to measure the commitment of Europe as a whole. On this year’s index, Europe — all European Union member states, Norway and Switzerland — comes in third after New Zealand and Canada. Its overall score of 5.3 is quite below Finland’s 6. This can be attributed to large European countries’ poor performance on the index and the European Union’s restrictive trade policies, Roodman noted.

The United Kingdom is ninth in the index, while Germany, Belgium, France and Spain took the 12th to 15th slots. Italy ranked 20. Poland was the lowest-ranking European country at 25, with a score of 3.6.

The United States, meanwhile, slipped from fifth last year to 19th in the 2012 index. CGD notes that while the country has better trade policies than others analyzed, the United States performs poorly on other policy areas such as investment and environment. The U.S. aid budget is also less than 0.7 percent of its national income and a large portion of it is “tied,” the index adds.

The United States has been actively reforming its aid program, including through changes in how the U.S. Agency for International Development procures goods and services. Aid reform is in fact among issues raised at the ongoing presidential campaigns. Foreign policy, meanwhile, will be at the heart of the Oct. 16 and 22 presidential debates.

The only two Asian countries considered for the index once again finished at the bottom of the list, with Japan at number 26 and South Korea at 27. Roodman had noted that these countries are different from others in the list because of their protective and inward-oriented policies. Japan, for instance, has some of the highest barriers for exports from developing countries, particularly agricultural products like rice. It also gives the bulk of its aid in the form of loans, Roodman added.

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