The World Bank's Classification of Countries by Income
The World Bank has used an income classification to group countries for analytical purposes for many years. Since the present income classification was first introduced 25 years ago there has been significant change in the global economic landscape...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/01/25737491/world-banks-classification-countries-income http://hdl.handle.net/10986/23628 |
| Summary: | The World Bank has used an income
classification to group countries for analytical purposes
for many years. Since the present income classification was
first introduced 25 years ago there has been significant
change in the global economic landscape. As real incomes
have risen, the number of countries in the low income group
has fallen to 31, while the number of high income countries
has risen to 80. As countries have transitioned to middle
income status, more people are living below the World Banks
international extreme poverty line in middle income
countries than in low income countries. These changes in the
world economy, along with a rapid increase in the user base
of World Bank data, suggest that a review of the income
classification is needed. A key consideration is the views
of users, and this paper finds opinions to be mixed: some
critics argue the thresholds are dated and set too low;
others find merit in continuing to have a fixed benchmark to
assess progress over time. On balance, there is still value
in the current approach, based on gross national income per
capita, to classifying countries into different groups.
However, the paper proposes adjustments to the methodology
that is used to keep the value of the thresholds for each
income group constant over time. Several proposals for
changing the current thresholds are also presented, which it
is hoped will inform further discussion and any decision to
adopt a new approach. |
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