"The Swedish foreign aid program is one of the best in the world in terms of quantity, weighted for country size, as well as its quality," said the report, published by the Centre for Global Development.
Sweden's overall score of 6.6 on the Commitment to Development Index (CDI) put it just behind number one Denmark's 6.8, and ahead of Norway's score of 6.2, giving the Scandinavian countries a clean sweep of the top three.
In addition to the strength of its foreign aid programme, Sweden was also praised for its refugee and environmental policies.
"Sweden also bears a large burden of refugees in humanitarian emergencies, provides little protection to domestic producers of agricultural products, and has the lowest greenhouse gas emission rates per capita of the CDI countries," the report read.
The annual CDI ranking compares 27 of the world's richest countries in seven policy areas that have an impact on poor nations: aid, trade, finance, migration, environment, security, and technology.
While Sweden received high marks for its foreign aid, finance, and migration policies, it received the lowest possible ranking for security due to "high arms exports to poor and undemocratic governments" as well as a lack of support for "creation and transfer of technological advances".
Sweden also placed in the bottom half of the ranking when it came to technology, with the CDI report criticizing the country for low subsidies to research and development (R&D) and its promotion of intellectual property rights in bilateral trade treaties which "restrict the flow of innovations to developing countries".
Overall, the ranking reveals that "there has been little overall improvement" in development policies of OECD countries since the CDI was first published a decade ago.
"Consistently measured over time, the scores for aid, migration, trade and technology transfer are about the same as they were when the Index was first calculated in 2003, and rich country policies to support global security are distinctly worse," CGD said in a statement.