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Criteria for Classification

Which criteria are used for classifying countries as developing (or developed)?

Please note: this section is still under development

Please note: this section is still under development

There is no agreed upon definition of which criteria should be used to determine if a country should be considered developing or not. In fact, this project has identified at least a dozen unique approaches used by different international organizations and treaties - and the expectation is that this number will grow as more research is conducted.

In addition, this study compiles the criteria used by individual countries to designate beneficiaries of their Generalized System of Preferences (GSP).

The material below details the criteria used by over 60 international organizations, treaties, and GSP schemes. 

Notes: 

  • Because the project seeks to map out how all major universal international organizations approach the label "developing countries", it includes cases where the developing/developed country division has no/negligible legal or statistical relevance.

  • Underline indicates link to source

Image by Timo Wielink

International Organizations

Treaties

Generalized
Systems of 
Preference

Follows UN-M49 (although it introduces a third category): "For statistical purposes, the BIS uses a classification that distinguishes Developed countries, Emerging Market and Developing Economies, and Offshore Centres".

Note: all countries listed as "Offshore Centres" are labeled 'Developing' in UN-M49

Food and Agriculture Organization (FAO)

The "developing country" category has no/negligible legal or statistical relevance

.

Self-identification: membership in the organization is equivalent to self-identifying as a developing country.

International ​Atomic Energy Agency (IAEA)

"The IAEA does not classify countries and the determination of a country as developed or developing has no impact for the purposes of IAEA’s work." 

Note: information obtained from Secretariat

International ​Civil Aviation Organization (ICAO)

Follows UN-DESA 

Note: information obtained from Secretariat

International Renewable Energy Agency (IRENA)

Follows UN-M49

Note: information obtained from Secretariat

International Fund for Agricultural Development (IFAD) 

Follows World Bank's income-based classification. Unlike the Bank's current approach, still links 'developing' to Low- and Middle-Income countries

Note: information obtained from Secretariat

International Labour Organization (ILO)

The "developing country" category has no/negligible legal or statistical relevance

Note: The ILO's Governing Body structure has a unique category of permanent members, called "countries of chief industrial importance", currently occupied by: Brazil, China, France, Germany, India, Italy, Japan, Russia, UK, and the US

The IMO categorizes countries as 'developing' when discussing technical cooperation but adopts not criteria: "Unfortunately there is no specific definition or criteria used to determine which states are considered a ‘developing’ country for the purposes of the IMO"

Note: information obtained from Secretariat

“The main criteria used by the WEO to classify the world into advanced economies and emerging market and developing economies are (1) per capita income level, (2) export diversification—so oil exporters that have high per capita GDP would not make the advanced classification because around 70% of its exports are oil, and (3) degree of integration into the global financial system. In the first criteria, we look at an average over a number of years given that volatility (due to say oil production) can have a marked year-to-year effect. For the first criterion, the data source is the WEO database; for the second criterion, it is the UN COMTRADE database; and for the last criterion, it is the IMF’s Balance of Payments Statistics Database. Note, however, that these are not the only factors considered in deciding the classification of countries. As it says in the WEO Statistical Appendix, "This classification is not based on strict criteria, economic or otherwise, and it has evolved over time. The objective is to facilitate analysis by providing a reasonably meaningful method of organizing data." Reclassification only happens when something marked changes or the case for change in terms of the three criteria above becomes overwhelming.”

Note: the IMF uses the nomenclature "Advanced economies" and "Emerging Market and Developing Economies"

While there are various existing classifications dividing countries into developing and developed countries, NDB does not fully endorse any of them. (In a few of NDB’s analytical work, the International Monetary Fund’s classification of “advanced economies” and “emerging market and developing countries” was used, as it fitted the purpose of the work)

Note: information obtained from Secretariat

Organization for Economic Co-operation and Development (OECD)

The OECD does not (officially) present itself as being an organization representing ‘developed’ countries, nor is membership tied to particular 'development'-related measures (ex: GDP, GDP per capita). However, many external bodies use OECD membership as a proxy for "developed" countries

Note: the OECD's founding document notes in the Preamble that “economically more advanced nations should co-operate in assisting to the best of their ability the countries in process of economic development”

See: OECD DAC-ODA

Eligibility to receive ODA can serve as a proxy for "developing countries": “all low- and middle- income countries based on gross national income per capita as published by the World Bank, except for G8 members, EU members, and countries with a firm date for entry into the EU. Membership of the OECD or the DAC does not affect eligibility to receive ODA. Several OECD members have been on the DAC List for many years and continue to receive ODA. Currently, no DAC members are on the list, but the DAC has made clear that leaving the list is not a requirement for DAC membership. Likewise, the provision of statistics to the DAC Secretariat has no bearing on a country's eligibility to receive ODA.”

Note: List is revised every three years

Organization for the Prohibition of Chemical Weapons (OPCW)

Follows UN-DESA

Note: information obtained from Secretariat

United Nations Children's Fund (UNICEF)

Follows UN-DESA

Note: information obtained from Secretariat

United Nations Department of Economic and Social Affairs (UN-DESA)

“For analytical purposes, the WESP [World Economic Situation and Prospects] developed classifies all countries of the world into one of three broad categories: developed economies, economies in transition and developing economies. The composition of these analytical groupings, specified in tables A, B and C, is intended to reflect basic economic country conditions, and are not strictly aligned with the regional classifications defined by the Statistics Division of UN DESA known as M49. ... Several countries (in particular the economies in transition) have characteristics that could place them in more than one category; however, for purposes of analysis, the groupings have been made mutually exclusive. Within each broad category, some subgroups are defined based either on geographical location or on ad hoc criteria, such as the subgroup of “major developed economies”, which is based on the membership of the Group of Seven.”​​

Note: this definition can be found in the World Economic Situation and Prospects 2021 report, published by UN DESA (see document's Annex)

No explicit set of criteria is given. The website only provides a list of the so-called "developing regions"

Note: no list is provided for "developed countries"

United Nations Environmental Programme (UNEP)

TBD

.

United Nations Human Settlements Programme (UN-Habitat)

Follows UN-M49

Note: information obtained from Secretariat

United Nations Educational, Scientific and Cultural Organization (UNESCO)

Follows UN-M49

Note: information obtained from Secretariat

Unique structure. Criteria combines countries' need and ability to finance. 'Developing' countries are identified using a combination of GNI per capita adjusted for "a health inequality aversion parameter, using the Disability Adjusted Life Years (DALY). The DALY is a measure of global disease burden and a key indicator of health inequality that is comprehensive and comparable between and among countries, and considers the share of burden arising from Communicable, Maternal and Prenatal Conditions to indicate a health system’s strength."

Note: "Ability to finance" is classified as "Low", "Lower-middle", "Upper-middle", and "High" - notwithstanding the identical labels used by the World Bank, the UNFPA's structure is detached from the Bank's. "Need to finance" is ranked as "highest", "high",  "medium", and "low". Given this structure, "developed" countries can be deduced as those whose ability to finance is high and need to finance is not low.

"Although there is no established convention for the designation of "developed" and "developing" countries or areas in the United Nations system, in 1996 this concept was introduced to the Standard country or area codes for statistical use (known as M49). It is intended for statistical convenience and does not express a judgement about the stage reached by a particular country or area in the development process."

Note: As per its own website, the UN publication "Standard Country or Area Codes for Statistical Use" was originally published as Series M, No. 49, and is now commonly referred to as the M49 standard, primarily for use in UN statistical publications and databases.
 

Important: UN-DESA and UN-49 are not identical

Under the UNFCCC (see Art.4.2 of the Convention), "developed" countries are those listed in Annex 1, and "developing" are the Non-Annex countries. Currently, Annex 1 parties "include the industrialized countries that were members of the OECD in 1992, plus countries with economies in transition (the EIT Parties), including the Russian Federation, the Baltic States, and several Central and Eastern European States"

Note: Annex 2 Parties are the OECD members of Annex I, but not the EIT Parties. 

"Designations such as “developed,” “developing", “industrialized”, “frontrunner”, “follower”, “latecomer” and “laggard” are intended for statistical  convenience and do not  necessarily express a judgment  about the state reached by a particular country or area in the development process."

"Industrialized economies include economies with adjusted manufacturing value added (MVA) per capita higher than $2,500 (international PPP) or a gross domestic product higher than $20,000. Emerging industrial economies include economies with adjusted MVA per capita ranging between $1,000 (international PPP) and $2,500 or whose share of the world MVA is higher than 0.5 percent. The list of least developed countries is based on decisions of the United Nations General Assembly. All remaining economies are included in the group “other developing economies.”

Note: See document's page iii and Annex C.1, p.195.

The UPU uses one of the most complex criteria to classify countries, based on its "postal development indicator" (PDI), which generates a four-tiered hierarchical structure. The simplified explanation is that the PDI is made out of a macroeconomic  part (gross  national  income per  capita) and  a  postal specific  part (the normal  letter  unit  cost). The full details of the PDI calculation can be found in this document (pp316-319)

Note: While the PDI system divides countries into four groups, Group 1 is commonly referenced as  the one of 'developed countries', while Groups 2-4 s 'developing countries', albeit legally, only the specific group allocation matters

Since 2016, the WB no longer uses the labels "developing" and developed". Prior to that, High-Income countries were referenced as "developed", while Middle- and Low-Income countries were referred to as "developing". However, many external organizations and documents still adopt these equivalences.

Note: "Unless otherwise noted, there is no longer a distinction between developing countries (defined in previous editions as low- and middle-income countries) and developed countries (defined in previous editions as high-income countries). Regional groupings are based on geographical coverage rather than a subset of countries that were previously referred to as developing." (From World Development Indicators Report of 2016)

World Food Programme (WFP)

Follows UN-DESA

Note: information obtained from Secretariat

World Health Organization (WHO)

The "developing country" category has no/negligible legal or statistical relevance

.

World Intellectual Property Organization (WIPO)

According to the WIPO's yearly report - World Intellectual Property Indicators - the reference used for "developing countries"is the World Bank's income-based categories.

Note: For more on "Patent Information Services for Developing Countries", click here 

World Tourism Organization (UNWTO)

Follows IMF

Note: information obtained from Secretariat

Self-declaratory. “There are no WTO definitions of “developed” and “developing” countries. Members announce for themselves whether they are “developed” or “developing” countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries”

Note: List is not publicly available

World Meteorological Organization (WMO)

Follows World Bank's income-based classification. Unlike the Bank's current approach, still links 'developing' to Low- and Middle-Income countries

Note: information obtained from Secretariat

Cartagena Protocol on Biosafety to the Convention on Biological Diversity 

Identical to CBD (no specific criteria)

Note: information obtained from Secretariat

Convention on Biological Diversity - CBD

No direct and specific criteria have been used for the purpose of the treaty. Instead, according to Art. 20, para. 2 of the Convention, the Conference of the Parties to the Convention was required to establish a list of developed country Parties and other Parties which voluntarily assume the obligations of the developed country Parties. At its 1st COP meeting it adopted a list of developed country Parties, which has been implemented since then. As and when any ambiguity arises in establishing a certain country as developing country or even as least developed country, the Secretariat uses the list from UN’s DESA.

Note: This information was obtained through direct correspondence with the CBD Secretariat (June 2021)

Convention on Persistent Organic Pollutants (POPs) (Stockholm Convention)

No criteria. "The texts of the Basel, Rotterdam, and Stockholm conventions do not define the term “developing countries”, nor have the respective Conferences of the Parties adopted guidance on this matter."

Note: information obtained from Secretariat

Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention)

No criteria. "The texts of the Basel, Rotterdam, and Stockholm conventions do not define the term “developing countries”, nor have the respective Conferences of the Parties adopted guidance on this matter."

Note: information obtained from Secretariat

Convention on the Conservation and Management of Fishery Resources in the South East Atlantic Ocean (SEAFO)

Developing countries are individually identified: Namibia, Angola, South Africa

Note: information obtained from Secretariat

Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (Rotterdam Convention)

No criteria. "The texts of the Basel, Rotterdam, and Stockholm conventions do not define the term “developing countries”, nor have the respective Conferences of the Parties adopted guidance on this matter."

Note: information obtained from Secretariat

Convention on the Regulation of Antarctic Mineral Resource Activities

TBD

.

Convention to Combat Desertification in those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa

Adopts UN-DESA

Note: information obtained from Secretariat

International Treaty on Plant Genetic Resources for Food and Agriculture

No criteria, but some use of World Bank's income-based division: "As of today, the Governing Body of the International Treaty has not yet developed any criteria or classification of countries. But for our administrative purposes and related processes, we typically use the World Bank classifications for general guidance, and changes are also made accordingly at regular intervals."

Note: information obtained from Secretariat

Minamata Convention on Mercury

Adopts UN-DESA

Note: information obtained from Secretariat

The Montreal Protocol details which countries are developing based on its Art.5 Special situation of developing countries: “1. Any Party that is a developing country and whose annual calculated level of consumption of the controlled substances in Annex A is less than 0.3 kilograms per capita on the date of the entry into force of the Protocol for it, or any time thereafter until 1 January 1999, shall, in order to meet its basic domestic needs, be entitled to delay for ten years its compliance with the control measures set out in Articles 2A to 2E, provided that any further amendments to the adjustments or Amendment adopted at the Second Meeting of the Parties in London, 29 June 1990, shall apply to the Parties operating under this paragraph after the review provided for in paragraph 8 of this Article has taken place and shall be based on the conclusions of that review. (…)”

Important note: Decision IV/7 Definition of developing countries: “The Fourth Meeting of the Parties [1992] decided in Dec. IV/7 to note that the Open-ended Working Group recommended that no criteria for future classification as a developing country for the purpose of the Montreal Protocol be adopted by the Meeting of the Parties and that the Parties should consider individually applications by Parties for classification as developing countries as and when such applications are made”.

Nagoya Protocol on Access and Benefit Sharing 

Identical to CBD

Note: information obtained from Secretariat

Membership to the OECD is used as the reference. Article 1 of Protocol says: "(u) "Developing countries" means those countries which are not Member States of the Organization for Economic Co-operation and Development (OECD); (v) "Developed countries" means those countries which are Member States of the Organization for Economic Co-operation and Development (OECD)"

.

United Nations Convention On The Law Of The Sea (UNCLOS)

TBD

.

World Health Organization Framework Convention on Tobacco Control

Connection to World Bank's income level: The classification applied by the Secretariat of WHO FCTC is based on the World Bank country classifications by income. We do not use developing/developed, at the best we can talk of “least developed” that are those of low-income level."

Note: information obtained from Secretariat

"Australia has not established eligibility requirements or definitions regarding the classification of countries within the different categories"

.

No clear definition. "At  present  Russia,  Belarus  and  Kazakhstan  grant  preferential  tariff  treatment  under  the GSP  scheme  to  103  developing  countries  and  49least-developed  counties.  Only beneficiary  countries  determined  as  least  developed  countries  (LDCs)  in  the  General Assembly  of  the  United  Nations  are  eligible  for  duty-free  preferential  treatment.  The  List of  Beneficiaries  of  GSP  was  approved  by  Decision  of  CU  Commission  n.  130  of  27 November 2009"

Note: Belarus, Kazakhstan, and Russia use the same approach.

"In 2013, Canada undertook a major review of the GPT, resulting in the graduation of 72 higher-income or trade-competitive countries as of January 1, 2015 and refocusing the  program on  countries  most  in  need  of  this  type  of  assistance."

.

"The general arrangement should be granted to all those developing countries which share a common developing need and are in a similar stage of economic development. Countries which are classified by the World Bank as high-income or upper-middle income countries have per capita income levels allowing them to attain higher levels of diversification without the scheme’s tariff preferences. Those countries include economies which have successfully completed their transition from centralised to market economies. They do not share the same development, trade and financial needs as the remaining developing countries; they are at a different stage of economic development, i.e. they are not similarly-situated as the more vulnerable developing countries; and, in order to prevent unjustified discrimination, they need to be treated differently. Furthermore, the use of tariff preferences provided under the scheme by high-income or upper-middle income countries increases the competitive pressure on exports from poorer, more vulnerable countries and therefore could impose unjustifiable burdens on those more vulnerable developing countries. The general arrangement takes account of the fact that the development, trade and financial needs are subject to change and ensures that the arrangement remains open if the situation of a country changes."

Note: another definition found was "Developing countries are automatically granted GSP if they: 1) Are classified as having an income level below "upper middle income" by the World Bank; 2) Do not benefit from another arrangement (like a Free Trade Agreement) granting them preferential access to the EU market  [...]" - found here

"Unlike other developed countries, access to Iceland’s GSP scheme is exclusive to LDCs."

.

No clear definition. "At  present  Russia,  Belarus  and  Kazakhstan  grant  preferential  tariff  treatment  under  the GSP  scheme  to  103  developing  countries  and  49least-developed  counties.  Only beneficiary  countries  determined  as  least  developed  countries  (LDCs)  in  the  General Assembly  of  the  United  Nations  are  eligible  for  duty-free  preferential  treatment.  The  List of  Beneficiaries  of  GSP  was  approved  by  Decision  of  CU  Commission  n.  130  of  27 November 2009"

Note: Belarus, Kazakhstan, and Russia use the same approach.

Beneficiaries are designated by  Cabinet  Order from countries/territories requesting for preferential treatment. The latter is subject to meeting the following criteria:  •  Economy of the country or the territory must be in the stage of development. •  The country or the territory desires to receive preferential tariff treatment under the GSP. •  The beneficiaries must be prescribed by a Cabinet Order as a country or a territory to which such preferences may appropriately be extended. •  Only beneficiary countries designated as least developed countries (LDCs) in the General Assembly of the United Nations are eligible for special preferential treatment for LDCs. 

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"Under  New Zealand’s GSP, a beneficiary loses preferences when its per capita Gross National Product reaches or exceeds 70 percent of the New Zealand level. The base reference source for this data is the World Bank Atlas.   At this level of relative income, a country is considered to have developed beyond the point where if needs preferential tariff treatment.  When a  beneficiary exceeds the benchmark, it is ‘graduated’ and loses its preferential status."

.

No clear definition. "At  present  Russia,  Belarus  and  Kazakhstan  grant  preferential  tariff  treatment  under  the GSP  scheme  to  103  developing  countries  and  49least-developed  counties.  Only beneficiary  countries  determined  as  least  developed  countries  (LDCs)  in  the  General Assembly  of  the  United  Nations  are  eligible  for  duty-free  preferential  treatment.  The  List of  Beneficiaries  of  GSP  was  approved  by  Decision  of  CU  Commission  n.  130  of  27 November 2009"

Note: Belarus, Kazakhstan, and Russia use the same approach.

"As of July 2019, the Republic of Korea grants preferential tariff treatment to 47 LDCs."

.

"In principle, all developing countries are eligible for the Swiss GSP, with the exception of countries and territories that have attained a high level of development. The exclusion is based on objective criteria. GSP benefits will not be granted to countries that are members of the Organization for Economic Cooperation and Development (OECD) or that have concluded a free trade agreement with Switzerland. The exclusion also applies to countries and territories that the OECD Development Assistance Committee has classified as a most advanced developing country or territory under part II of its list of development aid recipients. The definition of LDCs used herein is based on criteria proposed by the Economic and Social Council. Countries benefiting from the Swiss GSP are listed in annex 1. As of 1 September 2012, the following revisions were made to the status of countries and territories benefiting from Switzerland’s GSP:2 Free Trade Association, that is to say, Montenegro and Ukraine Barbados and Trinidad -and -Tobago the HIPC category. Beneficiary countries and their country status are indicated in annex 1." 

.

"Turkey grants preferential treatment to selected countries and territories that are classified as developing countries and LDCs by the World Bank, in accordance with the European Union. […] Turkey applies the graduation mechanism for the list concerned in accordance with the European  Union application"

.

The United States' approach to eligibility is extremely detailed and filled with unique elements. For full details, see US Code Title 19 - Customs Duties, 2462 - Designation of beneficiary developing countries.

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