THE WORLD BANK GROUP

A World Free of Poverty

Development Education Program
Beyond Economic Growth
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Chapters: Introduction I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII

Chapter II. Comparing Levels Of Development, page 2

Grouping Countries by Their Level of Development

Different organizations use different criteria to group countries by their level of development. The World Bank, for instance, uses GNP per capita to classify countries as low-income (GNP per capita of $765 or less in 1995), middle-income (including lower-middle-income, $766 to $3,035, and upper-middle-income, $3,036 to $9,385), or high-income ($9,386 or more; Map 2.1).

India
China
Russia
Brasil
USA
Germany
Japan
GNP per capita
(US Dollars)
GNP per capita
(PPP Dollars)
340
620
2 245
3 640
26 980
27 510
39 640
1 400
2 920
4 480
5 400
26 980
20 070
22 110

A more popular, though apparently more disputable, approach involves dividing all countries into "developing" and "developed"- despite the general understanding that even the most developed countries are still undergoing development. Dividing countries into "less developed" and "more developed" does not help much either, because it is unclear where to draw the line between the two groups. In the absence of a single criterion of a country's development, such divisions can only be based on convention among researchers. For example, it is conventional in the World Bank to refer to low-income and middle-income countries as "developing," and to refer to high-income countries as "industrial" or "developed."

The relatively accurate classification of countries into "developing" and "developed" based on their per capita income does not, however, work well in all cases. There is, for instance, a group of "high-income developing countries" that includes Israel, Kuwait, Singapore, and the United Arab Emirates. These countries are considered developing because of their economic structure or because of the official opinion of their governments, although their incomes formally place them among developed countries.

Question for Discusion Another challenge is presented by many of the countries with "transition" or "formerly planned" economies- that is, countries undergoing a transition from centrally planned to market economies. On the one hand, none of these countries has achieved the established threshold of high per capita income. But on the other, many of them are highly industrialized. This is one reason their classification by the World Bank is currently "under review." Note that in the World Bank's World Development Report 1982 these same countries were classified as "industrial nonmarket," and in current United Nations publications most of them are still grouped among "industrial" countries.

In 1995 less than 1 of every 6 people in the world lived in high-income (developed) countries, and almost 2 of every 6 lived in transition countries- including 21 percent of the world population in China alone (Figure 2.2).






Chapters: Introduction I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII







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