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So You Said You Care About Poor Countries? Commitment to Development Index

October 31, 2012

By Fiorenzo Conte

Wealthy and industrialized countries (members of the OECD) often herald their commitment to support shared global prosperity: it is not just about them and their citizens but also about least developed countries, they say.  They do care in other words about poor countries. But how can one assess these claims against reality? Indices can give a sense about whether wealthy countries do care about poor countries as much as they say to do. The newly released Commitment to Development Index (CDI) by the Center for Global Development (CGD) asks precisely this question to wealthy countries: so how much you care about poor countries? It does so by looking at 7 different dimensions through which a wealthy country can foster prosperity in a poorer country: aid, trade, migration, investment, security, environment and technology. The index conveys two clear messages: caring about poor countries is not just about putting more money for official development assistance (i.e. aid) but it is to lift a series of barriers in other pivotal areas such as migration and trade. The second message one gets from the index is that wealthy countries can do a much better job at helping developing economies: it can be in environment, technology or migration but the bottom line is that all countries can improve on more than one of these dimensions.

If you are wondering what one can actually dig out of indices, what are indices good for and what makes the Commitment to Development Index particularly useful, there are two points one should consider

What Indices Usually Tell You. One example of an index is the multidimensional poverty indices (MPI) developed by the Oxford Poverty and Human Development Initiative.  The MPI breaks poverty into three dimensions that is health, education and living standard. For each dimension of poverty there are a number of indicators: so for example for health there is an indicator about number of children dead and one about number of child/adult malnourished; for standard of living the indicators are about whether or not a person has electricity and whether or not wood or charcoal are used as cooking fuels. The indicators are ten but it does not end here: the MPI combines two aspects of poverty i.e. the incidence of MPI poverty which tells you what percentage of people in each country are poor and intensity of MPI poverty which takes the average poor person and tells you in how many indicators she/he is deprived. It combines the two aspects of MPI poverty and gives how many people are MPI poor. If you are thinking this is complex, you are right. But this is the goal of indices: to reflect the complexity of what deprivation is and looks like for people around the world. Indices such as MPI and CDI give you a sense of how well countries are doing against the multiple dimensions, which comprise welfare or support to poor countries, depending on what one is looking for. It is about multiplicity instead of singularity. Why does this matter? If one looks at this graph, one gets why focusing only on one dimension is to miss out on other parts: and when the whole picture is taken into account the overall judgment about how well country are doing (e.g. in promoting the welfare of the population) is turned upside down. For example if one looks only at the % of poor people living in poverty Ethiopia is not doing too bad, this is inverted when one looks at its MPI score.

So multiplicity matters and indices give a sense of how countries are doing. The CDI serves therefore as a reality check: if Italy is claiming its commitment to support poor countries by pointing to its aid policies (i.e. how much money you are putting into foreign assistance), one can use the CDI to see if this claim is reflected in all the components. The index also tells you how countries are doing over time and therefore points to the improvements/worsening of country’s performance on the multiplicity of channels in comparison to other countries. So if you are asking what indices are good for the answer is one: advocacy.

What Indices Usually Do Not Tell You. If one looks at the graph above one sees that Ethiopia (second from the left) is not doing well and this is largely due to low performance on living standards. This in turns means that a lot of people in Ethiopia have no electricity, no access to clean drinking water, no access to adequate sanitation, live in a house with a dirty floor and use “dirty ” cooking fuels. By just looking at the graph however one does not get which specific indicators among the ten are driving down Ethiopia’s rank. Indices usually indicate little in terms of action points and areas to prioritize. One is left to unravel the living standard dimension into its components, see what each indicator comprises and identify the cause(s) of the low performance. It takes time and data to get to a level of simplicity on which to base actions. This is the conundrum of indices: sometimes they compound together too many complex socio-economic dimensions into one indicator which makes it difficult to interpret.  Indices however can unveil what is behind the overall score: for example the MPI can be broken down and one can see how much each indicator contributes to the overall score. One can, let’s say, advocate the Ethiopian government to do more in the area of living standards and one can also point to areas such as access to electricity and sanitation as priority areas.

However, there is one further barrier to action: what is doing more in, let’s say, sanitation and what improvement in sanitation can be considered satisfactory? These are questions which matter a great deal to policy makers.  What is useful to bridge the gap between indices and action is to put Ethiopia’s performance in sanitation against the performance of the best-performing country in sanitation which is also most comparable to Ethiopia. In other words, it is not just about opening the indicator black box but also about giving a sense of what doing better in sanitation looks like, considering Ethiopia’s actual circumstances.

The Black Box and the Feasible Best-Case Scenario. This is what the CDI does for you. It not only ranks countries on the basis of the 7 different dimensions to sustain poor countries but it also unpacks the complexity to a level simple enough to take action. If one clicks on the name of the country one gets where should each country invest its time and effort for each indicator in order to climb up the ranking. So in the case of Italy, one finds out that its overall low score in 2012 is linked to a very small foreign aid program and high fishing subsidies. CDI does not give complexity, it provides nuances: Italy is very open to students coming from least developed countries (i.e. a large share of students of foreign students comes from developing countries) however it lags behind when it comes to sharing the burden of refugees during humanitarian crises. By casting the performance of Italy with regard to let’s say openness to students from developing countries against other countries’ performances, CDI points to the gap to a feasible best case scenario: it is not telling Italy what it could do in a perfect world, it is telling what other wealthy countries achieved for each indicator. It is geared toward action not inaction.

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4 Comments leave one →
  1. November 1, 2012 6:53 pm

    Great post! Just added it to my weekly link review @ http://aidnography.blogspot.ca/2012/11/links-contents-i-liked-49.html

  2. droodman permalink
    November 5, 2012 4:03 am

    Hi Fiorenzo,
    As the head guy on the CDI, I really enjoyed this thoughtful post about it and indexes generally. The black box problem is something I’ve long struggled with, and I will never be sure that we’ve struck the right balance. Policies are complicated and the scope of the CDI is wide. So there’s always this tendency to want to add more nuance, which makes the index more meaningful and creates more incentives to reform policies. But it does make the beast more complicated and potentially harder to understand. The nice thing about the web is that it allows you to some extent to have your cake and eat it too, offering the visitor an initially simple presentation as well as ways to drill down. We’ve gradually built up this capability over the years. FYI I talk about this and other issues in an essay about index-making:
    http://www.cgdev.org/content/publications/detail/6661/

    Best,
    David

  3. happysmiles permalink
    January 10, 2013 2:49 pm

    its geared for policy people, not people on the ground

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  1. So You Said You Care About Poor Countries? From Index to Action « Do No Harm

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