Index reveals global challenges’ impact on the development landscape

Twenty years after the Center for Global Development, or CGD, first published the Commitment to Development Index, Sweden tops its rankings for the fourth time in a row.

The index, which started out looking at 21 countries, has evolved significantly and now examines the policies of 40 of the world’s most powerful economies across development finance, investment, migration, trade, environment, security, technology, and global health.

“The emphasis of the index is beyond aid and beyond finance — it looks at those wider policies that we want to empower development officials to change,” said Ian Mitchell, senior policy fellow and the co-director of CGD’s Europe program. So, while the United States is the biggest absolute donor of aid, it scores poorly on the index — this year ranking in 26th place — because it struggles to successfully ratify international treaties through its Congress and, relative to the size of its economy, the development finance it provides is not generous, he explained.

This year's index also reflected the disastrous impact of Russia’s invasion of Ukraine on global development — from soaring food prices to the diversion of aid finance — and those countries lagging behind in new indicators around climate.

In a conversation with Devex, Mitchell discusses how the index has adapted to the changing development environment and global challenges, and the policy areas in which nontraditional donors are leading the way.

This conversation has been edited for length and clarity.

Sweden and Germany top this year's Commitment to Development Index. Chart by: Center for Global Development

This year’s index includes a new indicator that looks at climate ambitions. You also measure emissions, fossil fuel subsidies, and carbon pricing. What was the rationale behind adding the new indicator and looking at these specific aspects of climate goals?

The environment component of the index started out quite focused on environmental treaties, and over time has become more focused on climate policies and climate ambitions because it’s clear that climate is really important to development. We question what rich countries are doing in regard to their own policies on climate, and whether the rhetoric they have around supporting the climate transition is reflected in their actual policies at home. We were already looking at the level of fossil fuel subsidies, whether countries are applying a carbon price, and what their emissions actually are. Now we’ve also introduced a new indicator on climate ambition, and this draws on the nationally determined contributions that countries publish with the United Nations and their emission reduction goals for 2030.

Sweden tops this year’s CDI, followed by Germany, then Norway. What kinds of policies do these countries score well for?

Sweden’s policy set is very supportive to development and of the eight individual components we measure — it ranked top on development finance, migration, and environmental policy.  Generally, they score really well on investment because their policies support investment in lower-income countries and, as part of the EU's trading scheme, they've got a relatively open trading environment for lower-income countries. So they're quite consistent in their performance. Technology is perhaps the only area where there's substantial room for improvement for them.

Germany does particularly well on exchange in relation to investment, migration, and trade. They're quite open in this with low-income countries, and that creates important opportunities for those countries. On the global public good components that we look at, Germany does well on health and on environment. Norway tops the investment component, and they also do very well on health and security. They're held back by some of their policies on trade, which makes it more difficult for lower-income countries, and their fossil fuel production means that they're not a leader in environment in the way that they are in other components.

Were there any surprising or particularly noteworthy results from this year's index?

One was the United Arab Emirates, which has scored quite poorly in previous years. But there seems to be a conscious effort on their part to make more data available. Surprisingly, they are ranked top for their technology and knowledge-sharing policies this year. The index scores countries highly for high levels of spending on domestic research and development, but most of the technology score is based on whether they encourage the transfer and diffusion of technology, especially with poorer countries. Relative to their population, the UAE actually has more foreign students per head than any other country, and those students tend to come from quite low-income countries. We were able to give them credit for that approach because we think that's one way to spread knowledge — not only does it provide important opportunities for those students, but they also gain new knowledge, skills, and often economic and intellectual capital that they can use back home.

The other surprise was around refugee hosting. The number of Ukrainian refugees that have been received, by Central European countries in particular, is very high. Some of those countries have increased the number of refugees they've taken by a hundredfold, and countries like Czechia have therefore gone from the bottom 10 countries in terms of refugees per head up to second. But in some ways, the surprise is that Turkey, based on the number of refugees they host relative to their population, is still topping that indicator with around 40 refugees for every thousand of the population. So even with that dramatic change in refugee numbers in Europe, Turkey is still the leading country in hosting refugees, among the countries we look at.

The war in Ukraine has had a significant impact on global development — what have been some of the knock-on effects of the war on countries around the world, and how is it shifting their development focus?

Russia hasn't ever scored well, but this year we made some adjustments to look at the direct impact of the war. We have a peacekeeping indicator where we penalized Russia, and we didn't give it credit, for example, for the refugees it’s taken in regard to the war.

Then there are the knock-on impacts which, in addition to refugees, have been higher food prices, and pressure on domestic budgets in donor countries. Several countries were restricting the export of food — an indicator we had in there from COVID-19 — and are therefore exacerbating the high food prices. Then on development finance, we know that traditional donor countries are spending their development finance budgets on hosting refugees. That hasn't really entered yet into the official data that we use, but we know it's coming.

Finally, and another one that surprised me a little bit, was around the subsidies for fossil fuels. With the energy price spiking, even before Russia's invasion, governments have been spending more on subsidizing fossil fuels and now that energy prices are higher, they've increased those subsidies again. But it's difficult to unwind those subsidies once they've been provided, so that's been another unexpected and negative climate impact.

Nine middle-income countries are included in the ranking. In what policy areas are some of these countries, as well as other nontraditional donor countries, doing particularly well?

It varies a bit, but the top scoring middle-income country is South Africa, which does quite well on technology, security, and migration. They receive a lot of migrants relative to their population, and perhaps because of the countries they're adjacent to, those migrants tend to be from lower-income countries.

But the wider story on the low-and middle-income countries is that they do well on technology. We look at two things here — efforts in generating new knowledge — which is traditional research and development expenditure and incentives for business — and the diffusion of knowledge — either through foreign students or research collaboration and also through trade restrictions. We see that middle-income countries have far fewer restrictions on the diffusion of their technology. When they strike trade deals, they tend not to compel the partner country to extend patent lengths or restrict intellectual property rights, whereas the EU, the U.S., and most of the industrialized countries put quite strong restrictions on those that go beyond the World Trade Organization’s norms. Those are really important policies that don't get as much attention from the development community. Paradoxically, by restricting the spread of technology, high-income industrialized countries may be limiting their own growth.

Explore the Commitment to Development Index 2023 here.