Country_12_Hungary_EN

Hungary

Commitment to Development Index 2012

Hungary 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 Hungary’s performance on the 2012 CDI. For more details, visit cgdev.org/cdi.

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Overall Score

Hungary’s 2012 CDI Performance n Overall rank 2012: 22 n Overall score 2012: 4.0 Hungary ranks 22nd overall in 2012. Hungary excels in the environmental component, scoring in the top five in all indicators except its rate of fossil fuel production per capita. However, the Hungarian government has a meager aid program and engages in poor donor practices, resulting in a low score on the aid component.

A lack of government spending on R&D, little support for UN peacekeeping operations, and a low level of migration from developing countries contribute to its weak performance in the technology, security and migration components, while substantial agricultural subsidies lower Hungary’s record on trade.

Hungary’s CDI Performance, 2012 Aid Trade Investment Migration Environment Security Technology Overall

0

www.cgdev.org/cdi

4

8

12

16

Hungary 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: 0.8 n Rank: 25

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: 3.6 n Rank: 25 Strengths

Weaknesses - Low net aid volume as a share of the economy (0.09%; rank: 25) - Largest share of aid to less poor and worse-governed recipients (selectivity rank: 27) - Fails to report tied aid (rank: 24) - Allows project proliferation; small average project size (rank: 18)

Trade

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

n Score: 5.4 n Rank: 19

- Employs foreign tax credits to prevent double taxation of corporate profits earned abroad - No restrictions on pension fund investment in emerging markets

Weaknesses - Weak leadership in extractive industry transparency initiatives - Limited prosecution of home-country bribe payers

Migration

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.

n Score: 1.7 n Rank: 23

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)

Weaknesses - High agricultural subsidies (equivalent to a tariff worth 14.7% of the value of imports; rank: 23)

Center for Global Development

Investment

Strengths - Tuition for foreign students the same as for nationals

Weaknesses - Small number of immigrants from developing countries entering Hungary (rank by share of population: 22) - Bears small share of the burden of refugees during humanitarian crises (rank: 16)

Hungary 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: 7.9 n Rank: 2

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: 3.4 n Rank: 24

Strengths - No fishing subsidies (rank: 1) - High gas taxes ($1.54 per liter; rank: 1) - Excellent compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 4) - GDP growth exceeded growth in greenhouse gas (GHG) emissions over the past decade (average annual GHG growth rate/GDP, -3.99; rank: 5)

Strengths - High tax subsidy rate to businesses for R&D (rank: 8) - Provides patent exceptions for research purposes

Weaknesses

Weaknesses

- Low government expenditure on R&D (rank by share of GDP: 24) - Pushes to extend intellectual property rights in bilateral trade treaties (“TRIPS Plus� measures) that restrict the flow of innovations to developing countries - Does not revoke unused patents

- High fossil fuel production rate per capita (0.7 tons of carbon dioxide equivalent; rank: 15)

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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.

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.

n Score: 5.4 n Rank: 11 Strengths - Few arms exports to poor and undemocratic governments (rank by share of GDP: 8)

Weaknesses - Low personnel contributions to UN peacekeeping operations over last decade (rank by share of GDP: 20) - Has not ratified the Convention on Cluster Munitions (CCM)

Center for Global Development

Hungary 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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