Country_12_Germany_EN

Germany

Commitment to Development Index 2012

Germany David Roodman and Julia Clark

The Commitment to Development Index (CDI) ranks 27 of the world’s richest countries based on their dedication to policies that benefit poor nations.

Looking beyond standard comparisons of foreign aid flows, the CDI measures national policies in seven areas that are important to developing countries: aid, trade, investment, migration, environment, security and technology. This report reviews Germany’s performance on the 2012 CDI. For more details, visit cgdev.org/cdi.

Denmark Norway Sweden Luxembourg Austria Netherlands Finland New Zealand United Kingdom Portugal Canada Germany Belgium France Spain Australia Ireland Switzerland United States Italy Greece Hungary Slovakia Czech Republic Poland Japan South Korea

Overall Score

Germany’s 2012 CDI Performance n Overall rank 2012: 11 n Overall score 2012: 5.4 n Change since 2003: +0.5 (using 2012 methodology) Germany ranks 11 overall in 2012.

Germany finishes near the top on the investment component thanks to policies that promote healthy investment in developing countries. The German government also bears a large share of the burden of refugees during humanitarian crises and spends a significant amount on research and development of new technologies. But Germany would score higher if it was more selective in its aid recipients and increased the average size of its projects, decreased its agricultural subsidies, and increased participation in international peacekeeping efforts.

Germany’s CDI Performance, 2003–12 2003

Aid

2012

Trade Investment

th

www.cgdev.org/cdi

Migration Environment Security Technology Overall

0

4

8

12

16

Germany Country Report

Aid

Aid quality is just as important as aid quantity, so the CDI measures gross aid as a share of GDP adjusted for various quality factors: it subtracts debt service, penalizes “tied” aid that makes recipients spend aid only on donor goods and services, rewards aid to poor but relatively well-governed recipients, and penalizes overloading poor governments with many small projects.

n Score: 3.9 n Rank: 15

Investment

Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. The CDI includes a checklist of policies that support healthy investment in developing countries.

n Score: 6.3 n Rank: 2 Strengths

- Large amount of private charitable giving attributable to tax policies (rank by share of GDP: 8)

- Employs tax treaties to prevent double taxation of corporate profits earned abroad - Particularly active in Extractive Industries Transparency Initiative (EITI) and the Kimberley Process on blood diamonds - Vigorous prosecution of home-country bribe payers

Weaknesses

Weaknesses

- Contributes to project proliferation; small average project size (rank: 23) - Large share of aid to less poor and relatively worse-governed recipients (selectivity rank: 19) - Large share of tied or partially tied aid (21.7%; rank: 17)

- Does not provide support for outflows of portfolio investment - Political risk insurance also given to inefficient, import-substituting projects

Trade

The movement of people from poor to rich countries provides unskilled immigrants with jobs, income and knowledge. This increases the flow of money sent home by migrants abroad and the transfer of skills when the migrants return.

Strengths

International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries.

Migration

n Score: 6.9 n Rank: 6

n Score: 5.5 n Rank: 16

Strengths

Strengths - Low tariffs on textiles (6.4% of the value of imports; rank: 3) - Low tariffs on apparel (6.4% of the value of imports; rank: 3) - High level of manufactures imports from poorer countries (10.1% of GDP per capita; rank: 4)

- Bears large share of the burden of refugees during humanitarian crises (rank: 3) - Moderate number of immigrants from developing countries entering Germany (rank by share of population: 10) - Tuition for foreign students the same as for nationals

Weaknesses - High agricultural subsidies (equivalent to a tariff worth 13.0% of the value of imports; rank: 18)

Center for Global Development

Germany Country Report

www.cgdev.org/cdi

Environment

Rich countries use a disproportionate amount of scarce resources, and poor countries are most vulnerable to global warming and ecological deterioration, so the CDI measures the impact of policies on the global climate, fisheries, and biodiversity.

n Score: 6.9 n Rank: 11

Technology

Rich countries contribute to development through the creation and dissemination of new technologies. The CDI captures this by measuring government support for R&D and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.

n Score: 5.0 n Rank: 14

Strengths - No fishing subsidies (rank: 1) - Low consumption of ozone-depleting chemicals per capita (rank: 1) - High compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 3)

Weaknesses - Greenhouse gas emissions grew almost as fast as GDP in 2000-2010 (average annual growth rate/GDP, -1.9%; rank: 19)

Security

Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, military protection of global sea lanes, and participation in international security treaties. It also penalizes arms exports to poor and undemocratic governments.

n Score: 3.7 n Rank: 21

Strengths - High government expenditure on R&D (rank by share of GDP: 6)

Weaknesses - Low tax subsidy rate to businesses for R&D (rank: 26) - Large share of government R&D expenditure on defense (4.0%; rank: 20) - Does not force patent holders to license to meet social needs - Offers patent-like proprietary rights to developers of data compilations, including those assembled from data in the public domain

For More Visit cgdev.org/cdi for the complete 2012 edition of the Commitment to Development Index. There, you can explore the numbers with our interactive graphing tool, view additional publications and background papers, and dive deeper into the CDI methodology by downloading our data and code.

Strengths - Military ships stationed in sea lanes that are important to international trade (rank by share of GDP: 6) - Participates in major international security treaties and regimes

Weaknesses - Small personnel contributions to UN and other internationally sanctioned peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 21) - High arms exports to poor and undemocratic governments (rank by share of GDP: 20)

Center for Global Development

Germany Country Report

www.cgdev.org/cdi

Commitment to Development Index 2012 Country Denmark Norway Sweden Luxembourg Austria Netherlands Finland New Zealand United Kingdom Portugal Canada Germany Belgium France Spain Australia Ireland Switzerland United States Italy Greece Hungary Slovakia Czech Republic Poland Japan South Korea

Rank 1 2 3 4 5 6 7 8 9 10 11 11 13 13 15 15 17 18 19 20 21 22 23 24 25 26 27

Aid 11.5 13.0 12.6 13.0 3.1 9.5 6.6 3.3 6.8 3.1 5.0 3.9 6.4 4.2 4.0 4.3 7.5 5.2 3.2 1.3 1.6 0.8 0.8 1.1 0.7 1.6 1.0

Trade 5.3 1.1 5.8 5.3 5.6 5.9 5.8 8.1 5.5 5.6 6.2 5.5 5.5 5.6 5.5 7.4 5.2 1.5 6.7 5.7 5.3 5.4 5.8 5.5 5.6 0.1 -1.3

Investment 4.7 6.1 5.3 4.2 4.8 6.3 5.1 4.3 6.3 5.2 6.1 6.3 5.3 6.1 5.9 6.1 2.9 4.4 5.0 5.4 4.0 3.6 2.9 3.9 4.1 5.2 5.6

Migration 6.2 9.9 7.8 6.8 11.7 5.5 4.4 6.4 4.7 4.0 7.0 6.9 5.0 4.0 5.4 4.2 2.8 8.6 5.2 4.7 6.4 1.7 0.6 1.3 0.6 1.9 1.3

Environment 6.8 3.2 7.3 5.5 6.2 6.7 7.4 6.2 7.2 7.2 2.5 6.9 7.0 6.9 6.4 3.8 6.5 5.8 4.3 6.7 5.9 7.9 8.3 7.2 7.4 4.5 4.2

Security 7.7 7.6 1.2 5.0 6.1 3.2 6.6 7.3 5.4 6.0 5.7 3.7 3.6 3.7 3.4 5.1 6.9 4.4 4.6 5.0 5.7 5.4 5.5 1.6 3.8 4.5 1.4

Technology 6.6 5.7 4.7 4.2 5.7 5.4 5.9 4.8 4.3 7.4 5.5 5.0 4.6 6.6 5.8 5.2 3.9 4.8 4.9 4.2 2.8 3.4 2.6 5.3 2.7 6.1 7.0

Overall Score 7.0 6.6 6.4 6.3 6.2 6.1 6.0 5.8 5.7 5.5 5.4 5.4 5.3 5.3 5.2 5.2 5.1 5.0 4.8 4.7 4.5 4.0 3.8 3.7 3.6 3.4 2.7

Change since 2003 -0.2

+0.7 -0.3

n/a +0.7 -0.1

+0.1 0.0 +0.7 +1.1 +0.3 +0.5 +0.5 +1.0 +0.7 +0.2 0.0 +0.2 +0.8 +0.7 +0.7 n/a n/a n/a n/a +1.3 n/a

The above table lists scores for each of the 27 CDI-ranked countries across seven policy areas. A country’s overall performance is the average of its seven component scores, each of which are scaled so that an average score in 2012 equals 5.0. The final column shows the change in each country’s overall score since the CDI began in 2003 (using 2012 methodology).

About The CDI The Commitment to Development Index has been compiled each year since 2003 by the Center for Global Development (CGD), an independent think tank that works to reduce global poverty and inequality through rigorous research and active engagement with the policy community. CGD senior fellow David Roodman is the chief architect of the CDI, and collaborators have included William R. Cline on trade; Theodore H. Moran on investment; Jeanne Batalova, Kimberly A. Hamilton, and Elizabeth Grieco on migration; Amy Cassara and Daniel Prager on environment; Michael E. O’Hanlon, Adriana Lins de Albuquerque, Mark Stoker and Jason Alderwick on security, and Keith Maskus and Walter Park on technology. The Index is supported by the CDI Consortium.

Center for Global Development

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