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An Index of Donor Performance

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  • David Roodman

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Abstract

The Commitment to Development Index of the Center for Global Development rates 21 rich countries on the “development-friendliness” of their policies. It is revised and updated annually. In the 2004 edition, the component on foreign assistance combines quantitative and qualitative measures of official aid, and of fiscal policies that support private charitable giving. The quantitative measure uses a net transfers concept, as distinct from the net flows concept in the net Official Development Assistance measure of the Development Assistance Committee, which does not net out interest received. The qualitative factors are three: a penalty for tying aid; a discounting system that favors aid to poorer, better-governed recipients; and a penalty for “project proliferation.” The selectivity weighting approach avoids some conceptual problems inherent in the Dollar and Levin (2004) elasticity-based method. The proliferation penalty derives from a calibrated model of aid transaction cost developed in Roodman (forthcoming). The charitable giving measure is based on an estimate of the share of observed private giving to developing countries that is attributable to a) lower overall taxes (income effect) and b) specific tax incentives for giving (price effect). Despite the adjustments, overall results are dominated by differences in quantity of official aid given. This is because while there is a seven-fold range in net concessional transfers/GDP among the score countries, variation in overall aid quality across donors appears far lower, and private giving is generally small. Denmark, the Netherlands, Norway, and Sweden score highest while the largest donors in absolute terms, the United States and Japan, score in the bottom third. Standings by the 2004 methodology have been relatively stable since 1995.

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Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 42.

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Length: 41 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:cgd:wpaper:42

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Web page: http://www.cgdev.org

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Keywords: Commitment to Development Index; development aid; transfers; aid donor;

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  1. Andreoni,J., 2004. "Philantropy," Working papers 7, Wisconsin Madison - Social Systems.
  2. Ratha, Dilip, 2001. "Demand for World Bank lending," Policy Research Working Paper Series 2652, The World Bank.
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  13. David Roodman, 2004. "An Index of Donor Performance," Working Papers 42, Center for Global Development.
  14. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-82, July.
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