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Developed country

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"A developed country is one that allows all its citizens to enjoy a free and healthy life in a safe environment." (Kofi Annan) [1]

The term developed country is used to describe countries that have a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue and there is fierce debate about this. One such criteria is the Human Development Index. Developed countries being those with a high (HDI) rating. Another criteria is industrialization. Counties in which the tertiary and quaternary sectors of industry dominate being described as developed. A further criteria is income per capita and countries with high gross domestic product (GDP) per capita being described as developed countries. However, anomalies exist when determining "developed" status by GDP per capita alone.

Countries not fitting such definitions may be referred to as developing countries.

Similar terms

Terms similar to developed country include advanced country, industrialized country, more developed country (MDC), more economically developed country (MEDC), Global North country, first world country, and post-industrial country. The term industrialized country may be somewhat ambiguous, as industrialization is an ongoing process that is hard to define. The term MEDC is one used by modern geographers to specifically describe the status of the countries referred to: more economically developed. The first industrialised country was England, followed by Germany, France, the remainder of the United Kingdom and other Western European countries. According to economists such as Jeffrey Sachs, however, the current divide between the developed and developing world is largely a phenomenon of the 20th century.[2]

Definition

According to the United Nations Statistics Division,

There is no established convention for the designation of "developed" and "developing" countries or areas in the United Nations system. [3]

And it notes that

The designations "developed" and developing" are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process.[4]

The UN also notes

In common practice, Japan in Asia, Canada and the United States in northern America, Australia and New Zealand in Oceania, and Europe are considered "developed" regions or areas. In international trade statistics, the Southern African Customs Union is also treated as a developed region and Israel as a developed country; countries emerging from the former Yugoslavia are treated as developing countries; and countries of eastern Europe and of the Commonwealth of Independent States (code 172) in Europe are not included under either developed or developing regions.[5]

In the 21st century, the original East Asian Tiger[6] countries (Hong Kong,[7][6], Singapore[7][6], South Korea[7][6][8][9], and Taiwan[7][6]) are considered "developed" region or areas, along with Cyprus,[7] Israel[7], Malta,[7], and Slovenia[7].

Hong Kong is a Special Administrative Region of the People's Republic of China, a developing country; however, it is a separate economic entity with its own currency and customs controls, and is recognized[6] as developed. In contrast, the Taiwan has diplomatic recognition by 23 United Nations member states and functions as a de facto independent country, and is also recognized[7][6]as an industrialized developed country.

In the old international reports, the countries of Eastern Europe (including Slovenia which still belongs to "Eastern Europe Group" in the UN institutions) as well as the former Soviet Union (U.S.S.R.) countries (including those in Asia) and Mongolia, were not included under either developed or developing regions, but rather were referred to as "countries in transition"; however they are now widely regarded (in the international reports) as "developing countries" (except for Slovenia, see above).

Human Development Index

World map showing the Human Development Index as presented by the United Nations in 2007.
Main articles: Human Development Index and List of countries by Human Development Index

The UN HDI is a statistical measure that gauges a country's level of human development. While there is a strong correlation between having a high HDI score and a prosperous economy, the UN points out that the HDI accounts for more than income or productivity. Unlike GDP per capita or per capita income, the HDI takes into account how income is turned "into education and health opportunities and therefore into higher levels of human development." A few examples are Italy and the United States. Despite a relatively large difference in GDP per capita, both countries rank roughly equal in term of overall human development.[10] Since 1980, Norway (2001-2006), Japan (1990-91 and 1993), Canada (1992 and 1994-2000) and Iceland (2007-08) have had the highest HDI score. Countries with a score of over 0.800 are considered to have a "high" standard of human development. The top 30 countries have scores ranging from 0.912 in Cyprus to 0.968 in Iceland. Several small countries, such as Andorra, Liechtenstein and Macau were not reviewed by the United Nations. Thus, these countries have not received an official HDI score.[11]

Many countries listed by IMF or[12] CIA as "advanced" (as of 2008), possess an HDI over 0.9 (as of 2006). Many countries[13] possessing an HDI of 0.9 and over (as of 2004), are also listed by IMF or CIA as "advanced" (as of 2007). Thus, many "advanced economies" (as of 2008) are characterized by an HDI score of 0.9 or higher (as of 2006).

The latest index was released on December 18, 2008. This so-called "statistical update" covers the period up to 2006 and was published without an accompanying report on human development. The update is relevant due to newly released estimates of purchasing power parities (PPP), implying substantial adjustments for many countries, resulting in changes in HDI values and, in many cases, HDI ranks.[14]

Lists of prosperous economies

While there is no official guideline for which country may or may not be considered developed, different institutions have created certain categories for the economically most prosperous countries. The IMF identifies 32 "advanced economies",[7] while the CIA identifies 34 "developed countries" and 35 "advanced economies".[15] The OECD, also known as the 'developed country club', has 30 members. The World Bank identifies 66 "high income countries", which are classified either as developed or developing by the UN. The criteria used to create these lists differ across these organizations as does the placement of certain countries.

CIA developed country list

  Map of Developed Countries (DCs) as described by the CIA

The CIA World Factbook includes a classification of developed countries (DCs) [15] It notes that such countries form the top group of a hierachy: developed countries (DCs), former USSR/Eastern Europe (former USSR/EE), and less developed countries (LDCs).

It asserts that this group

includes the market-oriented economies of the mainly democratic nations in the Organization for Economic Cooperation and Development (OECD), Bermuda, Israel, South Africa, and the European ministates;

And is

also known as the First World, high-income countries, the North, industrial countries;

It notes that these[16]

generally have a per capita GDP in excess of $10,000 although four OECD countries[17] and South Africa have figures well under $10,000[18] and two of the excluded OPEC countries have figures of more than $10,000;[19]

Having raised these criteria it then announces a list of 34 DCs.[20] The CIA also notes that this list is

similar to the new International Monetary Fund (IMF) term "advanced economies"

But that

adds Hong Kong, South Korea, Singapore, and Taiwan but drops Malta, Mexico (sic[21]), South Africa, and Turkey.

The 34 countries are as follows:

•  Andorra •  Faroe Islands •  Ireland •  Monaco •  Spain
•  Australia •  Finland •  Israel •  Netherlands •  Sweden
•  Austria •  France •  Italy •  New Zealand •   Switzerland
•  Belgium •  Germany •  Japan •  Norway •  Turkey
•  Bermuda •  Greece •  Liechtenstein •  Portugal •  United Kingdom
•  Canada •  Holy See •  Luxembourg •  San Marino •  United States
•  Denmark •  Iceland •  Malta •  South Africa

CIA advanced economy list

The official classification of "advanced economies" was originally made by the IMF. The CIA intends to follow the IMF but also to add non-IMF members. Thus, until March 2001, the CIA list was more comprehensive than the IMF list. Since 2001, however, Cyprus, and more recently Slovenia and Malta, were added to the IMF list but not to the CIA advanced economy list. Below is the current CIA advanced economy list, consisting of 35 countries:[15]

•  Andorra •  Faroe Islands •  Iceland •  Monaco •  South Korea
•  Australia •  Finland •  Ireland •  Netherlands •  Spain
•  Austria •  France •  Israel •  New Zealand •  Sweden
•  Belgium •  Germany •  Italy •  Norway •   Switzerland
•  Bermuda •  Greece •  Japan •  Portugal •  Taiwan
•  Canada •  Holy See •  Liechtenstein •  San Marino •  United Kingdom
•  Denmark •  Hong Kong •  Luxembourg •  Singapore •  United States

IMF advanced economy list

  Countries described as Advanced Economies by the IMF.

According to the International Monetary Fund the following 32 countries are classified as "advanced economies:"[7]

•  Australia •  Germany •  Luxembourg •  Slovenia
•  Austria •  Greece •  Malta •  South Korea
•  Belgium •  Hong Kong •  Netherlands •  Spain
•  Canada •  Iceland •  New Zealand •  Sweden
•  Cyprus •  Ireland •  Norway •   Switzerland
•  Denmark •  Israel •  Portugal •  Taiwan
•  Finland •  Italy •  San Marino[22] •  United Kingdom
•  France •  Japan •  Singapore •  United States

High-income OECD members: The 'developed country club'

The High-income OECD is widely known as the 'developed country club'[23] and has 27 members[24], although there are three other OECD members (Mexico, Poland and Turkey) that are not High-income OECD members. The members are described as sustaining the highest life expectancy, lowest incidence of disease, lowest poverty rate, and lowest child mortality rate in the world.[25] The CIA, in its developed country list, implies developed countries are the OECD members plus Bermuda, Israel, South Africa, and the European ministates. The High-income OECD membership (2009) is as follows:

21 countries in Europe:

•  Austria •  Greece •  Norway
•  Belgium •  Hungary •  Portugal
•  Czech Republic •  Iceland •  Slovakia
•  Denmark •  Ireland •  Spain
•  Finland •  Italy •  Sweden
•  France •  Luxembourg •   Switzerland
•  Germany •  Netherlands •  United Kingdom

2 countries in Asia:

•  Japan
•  South Korea

2 countries in North America:

•  Canada
•  United States

2 countries in Oceania:

•  Australia
•  New Zealand

World Bank high-income economies

Main article: High income economy
  High income
  Upper-middle income
  Lower-middle income
  Low income

"High income economies" are defined by the World Bank as countries with a Gross National Income per capita of $11,456 or more.[26] According to the United Nations definition some high income countries may also be developing countries. Thus, a high income country may be classified as either developed or developing.[27]

According to the World Bank, the following 66 countries and territories are classified as "high-income economies"[28][29][30]:

High-income economy not classified by World Bank:

Quality-of-life survey

Main article: Quality-of-life index

Research about standards of living and quality of life by the Economist Intelligence Unit resulted in a quality-of-life index. As of 2005, the 30 countries with the highest index are:[31]

Welfare states

Currently modern, expansive welfare states are still the exclusive domain and hallmark of the developed nations,[32] commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP.[33] Prominent sociologist Gosta Esping-Andersen states that the developed nations have developed a new kind of capitalism exclusive to them, which he dubbs "welfare capitalism." This type of capitalism seeks to ensure economic security, independence, stablity and opportunity by creating expansive public sectors that fuse public policy and market forces. According to Esping-Andersen, welfare state policies and economic forces are completely interwoven in these nations, with public policy shaping such basic market attributes as consumer demand, capital stock build-up, labor pariticipation rates, worker productivity and the extent and ramifications of the business cycle.[32] These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, have proven themselves highly effective in reducing relative as well as absolute poverty in all high-income OECD countries.[34][35][36]

Country Absolute poverty rate
(threshold set at 40% of U.S. median household income)[34]		 Relative poverty rate[35]
Pre-transfer Post-transfer Pre-transfer Post-transfer
 Sweden 23.7 5.8 14.8 4.8
 Norway 9.2 1.7 12.4 4.0
 Netherlands 22.1 7.3 18.5 11.5
 Finland 11.9 3.7 12.4 3.1
 Denmark 26.4 5.9 17.4 4.8
 Germany 15.2 4.3 9.7 5.1
  Switzerland 12.5 3.8 10.9 9.1
 Canada 22.5 6.5 17.1 11.9
 France 36.1 9.8 21.8 6.1
 Belgium 26.8 6.0 19.5 4.1
 Australia 23.3 11.9 16.2 9.2
 United Kingdom 16.8 8.7 16.4 8.2
 United States 21.0 11.7 17.2 15.1
 Italy 30.7 14.3 19.7 9.1

Summary

Legend
CIA DCs CIA's The World Factbook, Developed countries CIA AE CIA's The World Factbook, Advanced economies
IMF AE International Monetary Fund, Advanced economies WB HIE World Bank, High-income economies[30]
HDI≥0.9 Human Development Index at or above 0.9[37] QoL≥7 Quality-of-life index at or above 7.0
Countries CIA DCs CIA AE IMF AE WB HIE HDI≥0.9 QoL≥7 All
 Australia YES YES YES YES YES YES 6
 Austria YES YES YES YES YES YES 6
 Belgium YES YES YES YES YES YES 6
 Canada YES YES YES YES YES YES 6
 Denmark YES YES YES YES YES YES 6
 Finland YES YES YES YES YES YES 6
 France YES YES YES YES YES YES 6
 Germany YES YES YES YES YES YES 6
 Greece YES YES YES YES YES YES 6
 Iceland YES YES YES YES YES YES 6
 Ireland YES YES YES YES YES YES 6
 Italy YES YES YES YES YES YES 6
 Japan YES YES YES YES YES YES 6
 Luxembourg YES YES YES YES YES YES 6
 Netherlands YES YES YES YES YES YES 6
 New Zealand YES YES YES YES YES YES 6
 Norway YES YES YES YES YES YES 6
 Portugal YES YES YES YES YES YES 6
 Spain YES YES YES YES YES YES 6
 Sweden YES YES YES YES YES YES 6
  Switzerland YES YES YES YES YES YES 6
 United States YES YES YES YES YES YES 6
 China, Republic of (Taiwan) NO YES YES YES YES YES 5
 Hong Kong NO YES YES YES YES YES 5
 Israel YES YES YES YES YES NO 5
 San Marino YES YES YES YES YES — 5
 Singapore NO YES YES YES YES YES 5
 United Kingdom YES YES YES YES YES NO 5
 Andorra YES YES — YES YES — 4
 Cyprus NO NO YES YES YES YES 4
 Korea, South NO YES YES YES YES NO 4
 Liechtenstein YES YES — YES YES — 4
 Monaco YES YES — YES YES — 4
 Bermuda YES YES — YES — — 3
 Faroe Islands YES YES — YES — — 3
 Malta YES NO YES YES NO NO 3
 Slovenia NO NO YES YES YES NO 3
 Bahrain NO NO NO YES YES NO 2
 Brunei NO NO NO YES YES NO 2
 Greenland NO NO — YES YES — 2
 Holy See YES YES — — — — 2
 Kuwait NO NO NO YES YES NO 2
 Macau NO NO — YES YES — 2
 Puerto Rico NO NO — YES YES — 2
 United Arab Emirates NO NO NO YES YES NO 2
 Antigua and Barbuda NO NO NO YES — — 1
 Aruba NO NO NO YES — — 1
 Bahamas, The NO NO NO YES NO — 1
 Barbados NO NO NO YES NO NO 1
 Cayman Islands NO NO — YES — — 1
JerseyGuernsey Channel Islands NO NO — YES — — 1
 Czech Republic NO NO NO YES NO NO 1
 Estonia NO NO NO YES NO NO 1
 Equatorial Guinea NO NO NO YES NO NO 1
 French Polynesia NO NO — YES — — 1
 Guam NO NO — YES — — 1
 Hungary NO NO NO YES NO NO 1
 Isle of Man NO NO — YES — — 1
 Netherlands Antilles NO NO — YES — — 1
 New Caledonia NO NO — YES — — 1
 Northern Mariana Islands NO NO — YES — — 1
 Oman NO NO NO YES NO NO 1
 Qatar NO NO NO YES NO NO 1
 Saudi Arabia NO NO NO YES NO NO 1
 Slovakia NO NO NO YES NO NO 1
 South Africa YES NO NO NO NO NO 1
 Trinidad and Tobago NO NO NO YES NO NO 1
 Turkey YES NO NO NO NO NO 1
 U.S. Virgin Islands NO NO — YES — — 1

See also

References

  1. ^ http://www.unescap.org/unis/press/G_05_00.htm
  2. ^ Sachs, Jeffrey (2005). The End of Poverty. The Penguin Press. ISBN 1-59420-045-9. {{cite book}}: Cite has empty unknown parameter: |coauthors= (help); Unknown parameter |tlocation= ignored (help)
  3. ^ "Composition of macro geographical (continental) regions, geographical sub-regions, and selected economic and other groupings (footnote C)". United Nations Statistics Division. revised 17 October 2008. Retrieved 2008-12-30. {{cite web}}: Check date values in: |date= (help)
  4. ^ http://unstats.un.org/unsd/methods/m49/m49.htm
  5. ^ "Composition of macro geographical (continental) regions, geographical sub-regions, and selected economic and other groupings (footnote C)". United Nations Statistics Division. revised 17 October 2008. Retrieved 2008-12-30. {{cite web}}: Check date values in: |date= (help)
  6. ^ a b c d e f g http://www.businesspme.com/uk/articles/economics/78/East-Asian-Tigers-.html
  7. ^ a b c d e f g h i j k IMF Advanced Economies List. World Economic Outlook, Database—WEO Groups and Aggregates Information, October 2008.
  8. ^ http://travel.state.gov/travel/cis_pa_tw/cis/cis_1018.html
  9. ^ http://www.ft.com/cms/s/0/98c62f1c-850f-11dd-b148-0000779fd18c.html
  10. ^ "UN. (2006). Human Development Report". Retrieved 2007-07-07.
  11. ^ "UN. (2008). Human Development Index: A Statistical Update". Retrieved 2008-12-22.
  12. ^ The official classification of "advanced countries" is originally made by the International Monetary Fund (IMF). The IMF list doesn't deal with non-IMF members. The CIA intends to follow IMF list but adds few countries which aren't dealt with by IMF due to their not being IMF members. By May 2001, the advanced country list of the CIA was more comprehensive than the original IMF list. However, since May 2001, three additional countries (Cyprus, Malta and Slovenia) have been added to the original IMF list, thus leaving the CIA list not updated.
  13. ^ Namely sovereign states, i.e. excluding Macau: In 2003 the government of Macau calculated its HDI as being 0.909 (the UN does not calculate Macau's HDI); In January 2007, the People's Daily reported (from China Modernization Report 2007): "In 2004...Macau...had reached the level of developed countries". However, Macau is not recognized by any international organisation as a developed/advanced territory, while the UNCTAD organisaion (of the UN), as well as the CIA, classify Macao as a "developing" territory. The World Bank classifies Macau as a high income economy (along with developed economies as well as with few developing economies).
  14. ^ [1]
  15. ^ a b c CIA (2008). "Appendix B. International Organizations and Groups. [[World Factbook]]". Retrieved 2008-04-10. {{cite web}}: URL–wikilink conflict (help)
  16. ^ This appears to mean the Organization for Economic Cooperation and Development (OECD), Bermuda, Israel, South Africa, and the European ministates
  17. ^ This is no longer true as all OECD economies have a GDP/head grater than $10,000
  18. ^ this is no longer true as South Africa's GDP/head is only slightly less than $10,000
  19. ^ this is no longer true as many OPEC countries have GDP/head greater than $10,000
  20. ^ This list does not correspond to the criteria indicated
  21. ^ This is not true as Mexico actually appears in neither list. Many authorities have classified Mexico as a newly industrialized country (see e.g., p. 164, Globalization and the Transformation of Foreign Economic Policy, Paweł Bożyk, Ashgate Publishing, Ltd., 2006, ISBN 0-75-464638-6, or p. 126, The Limits of Convergence, Mauro F. Guillén, Princeton University Press, 2001, ISBN 0691057052.)
  22. ^ World Economic Outlook, International Monetary Fund, October 2008, second paragraph, line 9-10.
  23. ^ http://www.oecd.org/dataoecd/3/57/39370725.pdf
  24. ^ http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20421402~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html
  25. ^ http://www.dcp2.org/regions/102/high-income-oecd
  26. ^ "World Bank, Country Classification". Retrieved 2008-10-12.
  27. ^ "UN. (2005). UNCTAD Handbook of Statistics" (PDF). Retrieved 2007-07-09.
  28. ^ World Bank - Country Groups. Accessed on October 12, 2008.
  29. ^ World Bank - Country Classification. Accessed on October 12, 2008, last paragraph, line 4.
  30. ^ a b Country classification table, World Bank. Accessed on line December 22, 2008.
  31. ^ The world in 2005: The Economist Intelligence Unit's quality-of-life index, The Economist. Accessed on line January 8, 2007.
  32. ^ a b Esping-Andersen, G. (1990). The three worlds of welfare capitalism. Princeton, NJ: Princeton University Press.
  33. ^ Barr, N. (2004). The economics of the welfare state. New York: Oxford University Press (USA).
  34. ^ a b Kenworthy, L. (1999). Do social-welfare policies reduce poverty? A cross-national assessment. Social Forces, 77(3), 1119-1139.
  35. ^ a b Bradley, D., Huber, E., Moller, S., Nielson, F. & Stephens, J. D. (2003). Determinants of relative poverty in advanced capitalist democracies. American Sociological Review, 68(3), 22-51.
  36. ^ Smeeding, T. (2005). Public policy, economic inequality, and poverty: The United States in comparative perspective. Social Science Quarterly, 86, 955-983.
  37. ^ Indicator Tables HDI 2008, United Nations Development Programme, December 18, 2008. Some entities are not included in this report. In this case an HDI figure from the UN's last available report has been used, except in the cases of the Republic of China (Taiwan) and Macau, which the UN has not calculated an HDI for; here, the figure of the entities' governments has been used.

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