A tale of two indices: U.S. ranks top and bottom for development assistance

(Credit: Sepehr Ehsani/flickr)

Two new rankings of country-level performance on foreign aid and development tell very different stories. It is best illustrated by the high performance of the United States in one and low rank in another. The differences are emblematic of the ongoing debates about priorities and aid effectiveness.

The U.S. is by some measures among the most generous countries in terms of its foreign assistance. But its policies leave plenty of room for improvement, according to a new index. The U.S. ranks 21 out of 27 countries – just below the Czech Republic – according to the Commitment to Development Index (CDI), produced by the Washington, D.C.,-based think tank the Center for Global Development.

With a score of 4.6, the United States was closer to bottom ranking Japan (4.1) than Denmark (6.1). That is largely due to its policies on migration, finance and the environment. The U.S. has the dubious honor of being only one of two countries in the index that is not party to the Kyoto Protocol for managing climate change. But strong rhetoric from President Barack Obama at the ongoing Paris climate change meetings shows that the U.S. is poised to do better.

The CDI contrasts with the recently published World Giving Index (WGI), by the Charities Aid Foundation. The index measures generosity through three indicators: giving money, giving time and helping a stranger. Its methodology yields a different result. Notably, the top countries are Myanmar, the U.S. and New Zealand. Norway, third in the Commitment to Development Index, ranks number 15 – behind the United Arab Emirates and Bahrain. Denmark comes in 39th place.

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“In a world still riven by conflict, war and uncertainty, that natural desire of people to help others is something which we should cherish, and nurture,” according to John Law, head of the Charities Aid Foundation.

(CAF)

(CAF)

The two indices conclude with contradictory messages. Amounts of money and time are the top priorities for the WGI. In the CDI, how that money is spent and other policies that contribute to development determines which countries do best. At the heart of the conflict between the two is a growing divide among groups discussing foreign aid and development. For years, it was about getting more money for foreign aid. And while calls for money still remain, they are increasingly coupled with pressure related to how the money is spent and other non-aid policies that affect development.

The stated goal of the CDI is to show that development is not solely defined by amount of aid money given by countries. Because of that, it is the Scandinavian countries of Denmark, Sweden, Norway, Finland and the Netherlands that once again lead the index. The Danes take home the top prize for having the best policies on aid, technology, trade and security. Countries were scored on 7 different indicators that were then weighted and combined into an overall index score.

Commitment to Development Index, ranked by overall score. (CGD)

Commitment to Development Index, ranked by overall score. (CGD)

“The global goals show us there’s now a consensus that all countries should work together to bring about sustained, shared prosperity,” said Owen Barder, head of Center for Global Development Europe, in a statement. “Development-friendly policies on trade, transparency, the environment and in many other areas are a win-win for both rich and poor. The CDI helps policymakers understand where their countries can do better.”

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Foreign assistance is not set aside by the CDI. The United States ranks only 20th in the category of aid. Countries like Norway and Luxembourg give less overall, but provide more assistance relative to their national incomes. But it is how money is spent, particularly the burden placed on recipients for monitoring and reporting, that causes the U.S. to do poorly on the indicator. Such nuance matters, argues the Center for Global Development, because certain policies make it harder for countries to effectively spend the aid money they receive.

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.

  • Thanks Tom for this useful summary.

    You are right that an important difference between these two rankings is that the CGD Commitment to Development Index looks at “beyond aid” policies, whereas the World Giving Index looks (as the name suggests) at the amount of money that is given.

    Another difference which you don’t touch on but which is also important is that the Commitment to Development Index looks at the policies of governments, whereas the World Giving Index looks at the behaviour of individuals.

    Owen