Economics
Developed Countries
Developed countries are nations with advanced economies, high standards of living, and well-established infrastructure. They typically have high levels of industrialization and technological advancement, along with strong institutions and governance. These countries often have high levels of income per capita and provide a wide range of social services to their citizens.
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5 Key excerpts on "Developed Countries"
eBook - ePub- Betty Jane Punnett(Author)
- 2017(Publication Date)
- Routledge(Publisher)
www.cia.gov/library ). Note that Hong Kong is not a country but in fact a part of the People’s Republic of China (PRC); however, it is often listed as a country, because of its special economic status within the PRC. The PRC does not recognize Taiwan as a country, and Taiwan does not currently have a seat at the United Nations.Developing Countries
This term is used most commonly at the United Nations to describe a broad range of countries, including those with both high and low per capita national incomes and those that depend heavily on the sale of primary commodities. These countries usually lack an advanced industrial infrastructure as well as advanced educational, health, communications, and transportation facilities.Wikipedia (www.wikipedia.org ) says simply, “a developed country is one that has a high income per capita” and “a developing country is a country with a relatively low standard of living.” Although I would not normally recommend Wikipedia as a single source of information, this definition captures the major distinction between the two groups and the distinction that is generally used in this book. The specific measure that is usually used for determining a country’s status is income per capita.Using this measure, income per capita, according to the Economist Intelligence Unit (2016), the twenty-five Developed Countries of the world are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Gibraltar, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States. All others are classified as emerging markets or transition economies.While income per capita is traditionally used to classify countries as developed or developing, there are limitations to this measure, and it does not capture the quality of life that may be experienced in a particular country. An alternative is the Human Development Index (HDI), which incorporates a variety of additional measures, such as health care, education, and social benefits. By and large, the countries that score high on per capita income also score high on the HDI and vice versa. Nevertheless, the HDI provides a better sense of what one will experience in a particular country. For example, Barbados, although a developing country, was number 30 on the HDI list, indicating a relatively high standard of living.
eBook - ePubManagement
A Developing Country Perspective
- Betty Jane Punnett(Author)
- 2013(Publication Date)
- Routledge(Publisher)
The CIA Factbook notes that this listing is similar to the new International Monetary Fund (IMF) term “advanced economies” which adds Hong Kong, South Korea, Singapore, and Taiwan but drops Malta, Mexico, South Africa, and Turkey (CIA World Factbook accessed at www.cia.gov/library, July 16, 2010). Note that Hong Kong is not a country, but is in fact a part of the People’s Republic of China (PRC) (but it is often listed as a country, because of its special economic status within the PRC); the PRC does not recognize Taiwan as a country, and Taiwan does not currently have a seat at the United Nations. Developing Countries This term is used most commonly at the United Nations to describe a broad range of countries including those with both high and low per capita national incomes and those that depend heavily on the sale of primary commodities. These countries usually lack an advanced industrial infrastructure as well as advanced educational, health, communications, and transportation facilities. Wikipedia (www.wikipedia.org, accessed June 9, 2010) says simply “a developed country is one that has a high income per capita” and “a developing country is a country with a relatively low standard of living.” Although I would not normally recommend Wikipedia as a source of information, this definition captures the major distinction between the two groups. The specific measure that is usually used for determining a country’s status is income per capita. Using this measure, income per capita, according to the Economist Intelligence Unit (2006) the twenty-five Developed Countries of the world are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Gibraltar, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, USA
eBook - ePub- Debraj Ray(Author)
- 1998(Publication Date)
- Princeton University Press(Publisher)
Figure 2.15 reveals.We summarize: developing countries are likely to have a high ratio of primary goods in their total exports, but as far as imports are concerned, there is significantly less variation.2.6. Summary
We began with a discussion of what the term economic development might mean. It is a multifaceted concept, embodying not just income and its growth, but also achievements on other fronts: reductions in infant mortality, higher life expectancy, advances in literacy rates, widespread access to medical and health services, and so on. Per capita income is sometimes used as an (incomplete) indicator for overall economic development, but should not be identified conceptually with development in the broader sense.We turned next to per capita income data for countries. Using exchange rates to convert local currencies into dollars, we obtained per capita income evaluated according to the exchange rate method . The disparities across countries is enormous. Some of this disparity is due to underreporting of income, but a far more serious problem arises from the fact that price levels are systematically different across countries: dollar prices for nontraded goods and services tend to be lower in developing countries. The purchasing power parity method attempts to correct for this by constructing international prices that are used to estimate national incomes. Cross-country disparities in per capita income are then smaller, but still large: the richest 5% of the world’s nations averaged a per capita income that was about twenty-nine times the corresponding figure for the poorest 5%, over the period 1960–85.There have been substantial changes in incomes for many countries. The meteoric rise of East Asia is a case to be noted. This case is contrasted with the fact that much of Latin America and sub-Saharan Africa languished during the 1980s. Thus, although the world distribution of income remained fairly unchanged in relative terms, there was plenty of movement within that distribution. However, there is evidence that a history of underdevelopment or extreme poverty feeds on itself. Using mobility matrices
eBook - ePubDevelopment Economics
Theory and Practice
- Alain de Janvry, Elisabeth Sadoulet(Authors)
- 2021(Publication Date)
- Routledge(Publisher)
Chapter 2 ). Differences in living standards are enormous between developing and industrialized countries, with PPP adjusted per capita income in the former only 21 percent of that in the latter, and a minute 5 percent in the low-income developing countries. In spite of notable success stories, continued failure to achieve development for half of humanity not only has huge intrinsic welfare costs for that population but is also a lost opportunity for the population of the industrialized countries and poses serious threats to the survival of the entire human race. Achieving development should thus be an issue of concern to both developing and industrialized countries, and this not only on ethical grounds but also for self-interest. Yet, as we will see in this book, achieving development is a highly complex issue to address, with causal determinants of development outcomes only partially understood and approaches to success still largely to be discovered where development has as of yet failed to occur. Thus, while achieving universal development is easy to recognize as a fundamental objective for humanity at large, how to do this is still very much work in progress. It requires creativity and commitment as well as strong analytical skills in using the tools of development economics. The objective of this book is to help the reader acquire these skills and become an effective professional in contributing to the pursuit of development.We show in Box I.1 the criteria we use in categorizing countries by level of economic development. Categories are largely based on the use of income to measure development.Box I.1 Terminology Used in Categorizing Countries The terminology we will be using in categorizing countries in terms of levels of development will vary according to the issues analyzed. It will broadly correspond to the following typology.Developing Countries, or Less Developed Countries (LDCs)
Using per capita income, these countries are classified by the World Bank (2020 ) into the following groups.- Low-income countries with gross national income per capita (GNIpc) ≤ $1,025 (measured in US dollars, 2018). In 2020, this category included 55 countries.
- Middle-income countries with GNIpc from $1,026 to $12,475. These are frequently divided into:
- lower-middle-income countries with GNIpc from $1,026 to $4,035—in 2019, this category included 53 countries;
- Eckhard Siggel(Author)
- 2016(Publication Date)
- Routledge(Publisher)
Another characteristic of economic development is that improvements of the living standard are normally accompanied by changes in the structure of the economy. Structural changes have become known as development criteria in their own right, for instance the increasing importance of the industrial and service sectors relative that of the primary sector. Economic development can therefore also be described as a process of growth and structural change, where the latter may refer to changes in the sector composition or to other structural effects.High average income, even if distributed in a socially acceptable way, is not a guarantee for the fulfilment of human needs in areas such as education, health care, longevity, or personal freedom. It has therefore become standard practice to define economic development by reference to sets of indicators measuring these aspects. The Human Development Index, computed and published annually since 1990 by the UNDP, is a composite indicator of several welfare aspects including education, health, and per person income. It is the subject of the first case study , where it is explained in some detail.The concept of national income as measured in the national accounts is not a perfect measure of material well-being, nor of the level of production, because it fails to include various forms of income that are either not marketed or unrecorded, such as the value of housework, child raising and various activities associated with subsistence agriculture and the informal sector. The level of subsistence and informal sector activities is usually estimated by national statistics bureaus and added on to the national accounts, but many other activities, in particular female work in the household, are not included in the concepts of domestic production and income. This is a shortcoming from the point of view of trying to measure all economic activity, but it is widely accepted because of the difficulty of measuring other activities.In spite of these limitations, the average or per capita level of income is often used as a broad indicator of the level of development. The reason for this usage is threefold: data availability, relative comparability of this measure across countries, and a strong correlation with other indicators of well-being. Indicators of education and health, for instance, tend to be positively related to the level of per capita income. However, it is always possible to find a group of countries in particular time periods, for which such a correlation is either insignificant or even negative. This point was made by Amartya Sen, who showed that for a group of countries like China, Sri Lanka, Brazil, Mexico and South Africa, the correlation between GNP per head and the life expectancy at birth seemed to be negative (Sen, 1989). For a very large number of countries, however, the correlation between these indicators can be shown to be positive and significant.
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