U.S. DEALT BAD HAND FROM INDEX'S 'STACKED DECK'

Saturday, June 14, 2003

A new method for measuring how much rich countries aid the development of poor ones finds the United States sadly lacking in generosity. Perhaps that was the whole point.

The ``Commitment to Development'' Index is a joint product of the Center for Global Development and the magazine Foreign Policy. It ranks 21 developed countries in six policy areas: trade, in which the United States comes first, and in foreign aid, the environment, foreign investment, migration and peacekeeping, in all of which it scores at or near the bottom. All in all, it ranks 20th, above only Japan.

Sound odd? Let me prime your reactions with a more familiar example, closer to home. Imagine an affluent family, dedicated to the best available education for their daughter, sending her to high-quality private schools, and eventually to Stanford. Oh, and med school after that, if she wants it. No problem; they can readily afford it.

Another family, equally dedicated, is just barely above the poverty level. Their daughter goes to the local high school, but Stanford is not available to her, either academically or financially. By great sacrifice, her parents cover half the cost of community college, and she earns the rest waiting tables in a Palo Alto, Calif., restaurant.

Which family has contributed the most to their child's education? I am moved to say it is the poor family that struggles and sacrifices; that is, to judge by effort. But it makes just as much sense to see things from the recipient's point of view, that is, to judge by effect, and in that case the well-off family has done more.

It just didn't hurt as much.

That tendency to see economic decisions in moral terms suffuses the new index, and it is sometimes even explicit. Daniel Drezner, who teaches political science at the University of Chicago, critiqued the study on his Web log. The United States should do better, he says, ``However, the authors should also acknowledge that, consciously or unconsciously, they stacked the deck against the United States.''

On foreign aid, for example, the United States ranks last. Why? As The Economist magazine put it, ``America is the biggest donor in absolute terms, but the stingiest relative to the size of its economy, spending only 0.12 percent of its gross domestic product'' on foreign aid.

So Denmark gets credit in the index for being 11 times more generous than America. Effort, or effect?

On the environment, also, the United States is at the bottom. That's because almost half of the score is linked to greenhouse-gas emissions per capita. As Drezner says, there are reasons to argue that emissions per unit of output would be a better measure. But that possibility was explicitly rejected. He notes that the authors explain, in their memo on the environment index, ``[T]he use of GDP in the denominator of a 'bad' indicator such as GHG emissions sends the odd moral signal that the richer a country is, the more acceptable it is to pollute.''

No, what's odd is the use of moral criteria for economic purposes. And remember, too, that this is an index of commitment to development. If development is successful, one of the results is that output per capita rises. By this criterion, that is a bad thing.

On the issue of migration, the United States scores poorly because countries are ranked largely on how many immigrants they accept relative to their population. On that basis, the top score is awarded to Switzerland and New Zealand. Yet the reason why migration contributes to development is that the emigrants send money back to their home countries. The effect on Somalia, say, is not in the least affected by its emigrants' share of the receiving county's population. What matters is how many Somalis there are sending money to their relatives.

Greece earns the top score for peacekeeping, six times higher than the U.S., because it has a lot of peacekeeping troops in the Balkans relative to the size of its army. But there are other forms of peacekeeping -- for instance, the United States has contributed to keeping shipping lanes open and free of piracy since the Marines landed on the shores of Tripoli early in the 19th century. The U.S. Navy, Drezner points out, is virtually the only force performing that useful service now, but the compilers of the index decided that giving the U.S. credit for it would be ``contentious.''

Portugal and Spain score more than four times higher than America on foreign direct investment, partly because as former colonial powers they invest heavily in their one-time colonies. But again, if you're the country receiving the investments, what's important is not how large the investment is relative to the economy of the country it's coming from; but rather how large it is relative to your economy.

And if that isn't stacking enough, the index simply averages all six scores, as if they are all of equal importance. That makes no sense either, Drezner observes, given that rich countries' trade barriers cost poor countries roughly twice as much as they receive in foreign aid (something Foreign Policy itself acknowledges).

The creators of the index describe their attempt as ``crude and imperfect.'' Yes.