Ranking the Rich: CGD/FP Commitment to Development Index (CDI) June 19, 2003

Why a CDI? Rich country policies matter for development Time to hold rich countries accountable Need a tool to measure rich country commitments to development – ex: Millennium Development Goal 8

Goals of the CDI Educate and inspire to action the rich- world public and policy makers Motivate a race to the top among OECD countries Spark new research and data collection Foster debate about the role of rich country policies in development

What is the CDI ? Measure of policyeffort on policies that affect development prospects of poor countries Measure of policy effort on policies that affect development prospects of poor countries The index ranks 21 countries –members of the DAC (except Luxembourg) The index ranks 21 countries –members of the DAC (except Luxembourg)

Caveats Effort not impact Effort not impact Precision vs. simplicity Precision vs. simplicity Better to be simple and simplistic than complex and simplistic. Better to be simple and simplistic than complex and simplistic. But policies are complex But policies are complex Lots not measuredyet Lots not measuredyet Exact numbers and ranks not too meaningful, but horserace is attractive Exact numbers and ranks not too meaningful, but horserace is attractive

Components Aid Aid Trade Trade Investment Investment Environment Environment Migration Migration Peacekeeping Peacekeeping

Aid Quantity relative to GDP, adjusted for quality: Debt service received and administrative costs netted out Debt service received and administrative costs netted out Tied aid discounted 20% Tied aid discounted 20% Adjustment to reflect selectivity Adjustment to reflect selectivity

Aid Selectivity - Examples $100 million to Tanzania are booked at full value because it is a poor country with relatively good governance $100 million to Tanzania are booked at full value because it is a poor country with relatively good governance $100 million to Russia count as $50 million because it is a relatively rich country with high levels of corruption $100 million to Russia count as $50 million because it is a relatively rich country with high levels of corruption

Aid Results

Trade Aggregate measure of protection in tariff equivalent terms: Tariffs Tariffs Non-tariff barriers Non-tariff barriers Subsidies Subsidies

Trade Results

Investment Quantity of FDI in developing countries relative to GDP: Discounted by corporate corruption abroad (TI index) Discounted by corporate corruption abroad (TI index)

Investment Results

Environment Mainly: depletion of shared commons (greenhouse emissions, ozone-depleting substances, fishing subsidies) Mainly: depletion of shared commons (greenhouse emissions, ozone-depleting substances, fishing subsidies) Minor part: contributions to international efforts (ratifying treaties, $ to multilateral environmental funds) Minor part: contributions to international efforts (ratifying treaties, $ to multilateral environmental funds) Minor part: support for clean technologies development Minor part: support for clean technologies development

Environment Results

Migration Mainly: flow of legal immigrants / population Mainly: flow of legal immigrants / population Minor part: refugee assistance Minor part: refugee assistance

Migration Results

Peacekeeping Financial contributions to U.N. peacekeeping, relative to GDP Financial contributions to U.N. peacekeeping, relative to GDP Personnel contributions to multilateral (U.N. and NATO) peacekeeping Personnel contributions to multilateral (U.N. and NATO) peacekeeping

Peacekeeping Results

Overall Scores