Girish Mahajan (Editor)

Developed country

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Developed country

A developed country, industrialized country, or "more economically developed country" (MEDC), is a sovereign state that has a highly developed economy and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for evaluating the degree of economic development are gross domestic product (GDP), gross national product (GNP), the per capita income, level of industrialization, amount of widespread infrastructure and general standard of living. Which criteria are to be used and which countries can be classified as being developed are subjects of debate.

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Developed countries have post-industrial economies, meaning the service sector provides more wealth than the industrial sector. They are contrasted with developing countries, which are in the process of industrialization, or undeveloped countries, which are pre-industrial and almost entirely agrarian. As of 2015, advanced economies comprise 60.8% of global GDP based on nominal values and 42.9% of global GDP based on purchasing-power parity (PPP) according to the International Monetary Fund. In 2015, the ten largest advanced economies by GDP in both nominal and PPP terms were Australia, Canada, France, Germany, Italy, Japan, South Korea, Spain, the United Kingdom, and the United States.

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 first industrialized country was the United Kingdom, followed by Belgium. Later it spread further to Germany, United States, France and other Western European countries. According to some economists such as Jeffrey Sachs, however, the current divide between the developed and developing world is largely a phenomenon of the 20th century.

Definition and criteria

Economic criteria have tended to dominate discussions. One such criterion is income per capita; countries with high gross domestic product (GDP) per capita would thus be described as developed countries. Another economic criterion is industrialization; countries in which the tertiary and quaternary sectors of industry dominate would thus be described as developed. More recently another measure, the Human Development Index (HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating.

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.

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.

Human Development Index (HDI)

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."

Since 1990, Norway (2001–2006, 2009–2013), Japan (1990–1991 and 1993), Canada (1992 and 1994–2000) and Iceland (2007–2008) have had the highest HDI score. The top 47 countries have scores ranging from 0.793 in Barbados to 0.955 in Norway.

Many countries listed by IMF or CIA as "advanced" (as of 2009), possess an HDI over 0.788 (as of 2010). Many countries possessing an HDI of 0.788 and over (as of 2010) are also listed by IMF or CIA as "advanced" (as of 2009). Thus, many "advanced economies" (as of 2009) are characterized by an HDI score of 0.9 or higher (as of 2007). Since April 2016, the IMF classifies Macau as an advanced economy.

The latest index was released on 14 December 2015 and covers the period up to 2014. The following are the 49 countries in the top quartile - having an HDI above 0.8, and classified as possessing a "Very high human development".

  • = Increase
  • = No increase or decrease
  • = Decrease
  • The number in parentheses represents the number of ranks the country has climbed (up or down) relative to the ranking in 2014 report.
  • As a non-UN member, the government of Taiwan calculates its own HDI, which had a value of 0.882 in 2011. Additionally, while the HDI for the Chinese special administrative region of Hong Kong is calculated by the UN, it is not for Macau. The Macanese government calculated the territory's HDI to be 0.868 in 2011. These values place both Taiwan and Macau well within the list of countries with "Very high human development". Furthermore, in 2009 a United Nations project calculated the HDI for all of its members, as well as Taiwan, Macau, and many dependent territories. The HDI values for the countries of San Marino and Monaco, which have not been included in official annual HDI reports, were found to be at 0.961 and 0.956 respectively. This places both countries firmly within the category of countries with "Very high human development" as well. The dependent territories with HDI values equivalent to "Very high human development" were: Jersey, Cayman Islands, Bermuda, Guernsey, Gibraltar, Norfolk Island, Faroe Islands, Isle of Man, British Virgin Islands, Falkland Islands, Aruba, Puerto Rico, Martinique, Greenland, and Guam. Of note, the HDI values in the 2009 report were calculated using the old HDI formula, while HDI values after the year 2010 are calculated with a different formula.

    Net take-home pay of OECD members

    While GDP per capita is often used to measure how developed a country is, it includes components that do not contribute to a citizen's standard of living. GDP per capita may increase while real incomes for the majority decline. However, measuring only net take-home pay gives a more accurate picture of a country's standard of living. The tables show net income figures published annually in the OECD Tax Database. They reflect the annual augmented total net take-home pay, by family-type, deducting taxes and non-tax compulsory payments. Since PPP conversion is a widely accepted way to compare income, the OECD publishes the data in USD PPPs. The two major family-types, married with two children and single with no child at 100% average wage have been selected to give an accurate picture of the wage levels.

    Gallup median household and per-capita income

    In 2013, Gallup published a list of countries with median per capita and household income. Using median, rather than mean income, results in a much more accurate picture of the average income of the middle class since the data will not be skewed by gains and abnormalities in the extreme ends. The figures are in international dollars using purchasing power parity and are based on responses from at least 2,000 adults in each country, with the data aggregated from 2006 to 2012. Below is a list of the top 30 countries in each category.

    Other lists of developed countries

    Some institutions have produced lists of developed countries: the UN (list shown above), the CIA, and some providers of stock market indices(the FTSE Group, MSCI, S&P, Dow Jones, STOXX, etc.). The latter is not included here because its association of developed countries with countries with both high incomes and developed markets is not deemed as directly relevant.

    However many other institutions have created more general lists referred to when discussing developed countries. For example, the International Monetary Fund (IMF) identifies 39 "advanced economies". The OECD's 35 members are known as the "developed countries club" The World Bank identifies 79 "high income countries".

    World Bank high-income economies

    According to the World Bank the following 79 countries (including territories) are classified as "high-income economies". In parentheses are the year(s) during which they held such classification since classification began in 1987.

    IMF advanced economies

    According to the International Monetary Fund, the following 39 economies are classified as "advanced economies":

    The CIA has modified an older version of the IMF's list of Advanced Economies, noting that the IMF's Advanced Economies list "would presumably also cover" some smaller countries. These include:

    High-income OECD members

    There are 33 members in the High-income OECD category, as determined by the World Bank. The High-income OECD membership is as follows:

    25 countries in Europe:

    3 countries in Asia:

  •  Israel
  •  Japan
  •  South Korea
  • 3 countries in the Americas:

  •  Canada
  •  Chile
  •  United States
  • 2 countries in Oceania:

  •  Australia
  •  New Zealand
  • Development Assistance Committee members

    There are 30 members—29 selected OECD member countries and the European Union—in the Development Assistance Committee (DAC), a group of the world's major donor countries that discuss issues surrounding development aid and poverty reduction in developing countries. The following OECD member countries are DAC members:

    23 countries wholly or partly in Europe:

    2 countries in Asia:

  •  Japan
  •  South Korea
  • 2 countries in North America:

  •  Canada
  •  United States
  • 2 countries in Oceania:

  •  Australia
  •  New Zealand
  • Paris Club members

    There are 22 permanent members in the Paris Club (French: Club de Paris), a group of officials from major creditor countries whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.

    15 countries wholly or partly in Europe:

    3 countries in Asia:

  •  Israel
  •  Japan
  •  South Korea
  • 3 countries in The Americas:

  •  Brazil
  •  Canada
  •  United States
  • 1 country in Oceania:

  •  Australia
  • References

    Developed country Wikipedia


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