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Commitment to Development Index

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Commitment to Development Index

Summary: The Commitment to Development Index (CDI) ranks wealthy governments on how much they are doing to help poor countries.

Main Points: The CDI rates governments on aid, trade, investment, migration, environment, security, and technology, and averages the seven for an overall score. 

The CDI scores wealthy governments on helping poor countries via 7 linkages:

·        The aid component of the CDI moves beyond standard but narrow comparisons of the quantity of aid governments give, factoring in quality too. It penalizes donors for giving aid to relatively rich or worse-governed recipients, for overburdening governments with lots of small aid projects, or for "tying" aid, which forces recipients to spend it on the donor country's own goods rather than shop around for the lowest price. The component also rewards tax deductions and credits that support private charity.

·        The trade component of the CDI penalizes countries for erecting barriers to imports of crops, clothing, and other goods from poor nations. It looks at two kinds of barriers: tariffs (taxes) on imports, and subsidies for domestic farmers, which stimulate overproduction and depress world prices. Such barriers deny people in poor countries jobs and income. The component also evaluates rich countries' share of imports from developing countries in order to account for unmeasured (tacit) barriers.

·        The investment component of the CDI compares rich countries on policies that encourage constructive investment in poor countries. It is based on a checklist of policies that matter. For example, do governments allow public pension funds to invest in poor countries? Do they offer insurance against political risks, such as expropriation, to encourage domestic companies to venture abroad? Do they first check for potential environmental and labor rights abuses in factories to be insured?

·        The migration component of the CDI compares rich countries on how easy they make it for people from poor ones to immigrate, get education or find work, send home money, and even return home with new skills and capital.

·        The environment component of the CDI compares rich countries on policies that affect shared global resources such as the atmosphere and oceans. Rich countries use these resources disproportionately while poor ones are less equipped to adapt to the consequences, such as climate change. Countries do well if their greenhouse gas emissions are falling, if their gas taxes are high, if they do not subsidize the fishing industry, and if they control imports of illegally cut tropical timber.

·        The security component of the CDI compares rich countries on military actions that affect developing countries. Rewarded are contributions to international peacekeeping and forcible humanitarian interventions that have an international mandate—unlike the 2003 invasion of Iraq but like the NATO intervention in Kosovo. Countries also get points for protecting sea lanes for global trade and participating in international security treaties, but lose them for exporting weapons to authoritarian regimes with heavy military spending.

·        The technology component of the CDI analyses policies of the rich countries that support creation and dissemination of new technologies, which can profoundly shape life in developing countries. The component rewards government funding and tax breaks for research and development but penalizes certain patent and copyright rules deemed too restrictive to the flow of ideas across borders.

The dataset covers OECD member countries.

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Page Created By:  Madina Junussova. The content presented on this page is drawn directly from the source(s) cited above, and consists of direct quotations or close paraphrases. This material does not necessarily reflect the official view of the publishing organization.

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