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Developed nation

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Developed nation

"Industrial nation" redirects here. For the industrial music magazine, see Industrialnation.
Further information: Developed market

A developed country or "more developed country" (MDC), is a sovereign state that has a highly developed economy and advanced technological infrastructure relative to other less developed nations. Most commonly, the criteria for evaluating the degree of economic development are gross domestic product (GDP), the per capita income, level of industrialization, amount of widespread infrastructure and general standard of living.[1] Which criteria are to be used and which countries can be classified as being developed are subjects of debate.

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. According to the International Monetary Fund, advanced economies comprise 65.8% of global nominal GDP and 52.1% of global GDP (PPP) in 2010.[2] In 2011, the nine largest advanced economies by either nominal GDP or GDP (PPP) are the United States, the United Kingdom, Germany, France, Japan, Italy, Canada, Spain and South Korea.[3][4]

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 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.[5]

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. However, many anomalies exist when determining "developed" status by whichever measure is used.[examples needed]

Kofi Annan, former Secretary-General of the United Nations, defined a developed country as follows: "A developed country is one that allows all its citizens to enjoy a free and healthy life in a safe environment."[6] But 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.[7]

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.[8]

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 Central Europe and of the Commonwealth of Independent States (Russian Federation, Ukraine, Belarus, and Central Asia; code 172) in Europe are not included under either developed or developing regions."[9]

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 (1990–91 and 1993), Canada (1992 and 1994–2000) and Iceland (2007–08) 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[10] CIA as "advanced" (as of 2009), possess an HDI over 0.788 (as of 2010). Many countries[11] 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).

The latest index was released on 14 March 2013 and covers the period up to 2012. The following are the 47 countries in the top quartile - having an HDI above 0.8, and classified as possessing a "Very high human development".

Note: The green arrows (Increase), red arrows (Decrease), and blue dashes (Steady) represent changes in rank when compared to the 2011 data – published in the 2011 report.

As a non-UN member, the government of Taiwan calculates its own HDI, which had a value of 0.882 in 2011.[12] 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".[13] 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, and Guam.[14] 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.

Average disposable wage 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 wages and salaries gives a more accurate picture of a country's standard of living. Unlike the gross wage, which can be a misleading indicator of the well-being of a citizen since it does not represent the full amount of money the worker will be left to consume on goods or services, the disposable wage excludes compulsory deductions such as income tax, municipal tax, provincial/state income tax, social security (pension plan, medicare) and compulsory insurance. The list below has compulsory deductions applied with rates obtained from the OECD Tax Database, which assumes that the citizen is single with no children, with an income level 100% of the average wage.[15] All monetary values are based on the OECD's purchasing power parity exchange rates. Note that the OECD does not publish data for some countries and hence they are not listed.

Rank Country Disposable $
Disposable $
Gross $
1  United States 42,050 242 Increase 22.8% 54,450
2  Ireland 41,170 531 Increase 18.9% 50,764
3  Luxembourg 37,997 -1,477 Decrease 28.1% 52,847
4   Switzerland 35,471 -57 Decrease 29.4% 50,242
5  Australia 34,952 835 Increase 22.3% 44,983
6  United Kingdom 33,513 -1,272 Decrease 25.1% 44,743
7  Canada 32,662 -648 Decrease 22.7% 42,253
8  Norway 31,101 913 Increase 29.3% 43,990
9  South Korea 31,051 1,341 Increase 12.3% 35,406
10  Netherlands 29,269 -544 Decrease 37.8% 47,056
11  Austria 29,008 -177 Decrease 33.4% 43,555
12  Sweden 28,301 480 Increase 25.0% 37,734
13  Denmark 27,974 -335 Decrease 38.6% 45,560
14  Japan 27,763 724 Increase 21.0% 35,143
15  France 27,452 93 Increase 28.0% 38,128
16  Spain 26,856 -466 Decrease 21.9% 34,387
17  Finland 25,747 146 Increase 29.8% 36,676
18  Belgium 25,642 25 Increase 42.2% 44,364
19  Israel 24,225 147 Increase 18.9% 28,804
20  Germany 24,174 379 Increase 39.9% 40,223
21  Italy 23,194 -562 Decrease 30.8% 33,517
22  Greece 21,352 -2,039 Decrease 18.8% 26,295
23  Portugal 17,170 -2,044 Decrease 24.5% 22,742
24  Czech Republic 15,115 -191 Decrease 23.0% 19,630
25  Slovakia 14,701 -328 Decrease 22.9% 19,068
26  Poland 14,390 116 Increase 28.3% 20,069
27  Estonia 13,737 -444 Decrease 20.7% 17,323
28  Hungary 12,843 52 Increase 35.0% 19,437

Other lists of developed countries

Only three institutions have produced lists of "developed countries". The three institutions and their lists are the UN list (shown above), the CIA[21] list and the FTSE Group's list, whose list is not included because its association of developed countries with countries with both high incomes and developed markets is not deemed as directly relevant here.[22] However many institutions have created lists which are sometimes referred to when people are discussing developed countries. The International Monetary Fund (IMF) identifies 35 "advanced economies",[23][24] The OECD, also widely known as the "developed countries club"[25][26][27] has 34 members. The World Bank identifies 66 "high income countries". The EIU's Quality-of-life survey and a list of countries with welfare states are also included here. The criteria for using all these lists and for countries' inclusion on these lists are often not properly spelt out, and several of these lists are based on old data.

IMF advanced economies

According to the IMF the following 35 economies are classified as "advanced economies":[23]

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"[21] some smaller countries. These include:

 Andorra  Faroe Islands  Holy See  Liechtenstein  Monaco

Development Assistance Committee members

There are 28 members — 27 selected OECD member countries and the European Union—in the Development Assistance Committee (DAC),[28] a group of the world's major donor countries that discuss issues surrounding development aid and poverty reduction in developing countries.[29] The following OECD member countries are DAC members:

21 countries in Europe:

2 countries in Asia:

2 countries in North America:

2 countries in Oceania:

1 Joined the DAC in 1961, withdrew in 1974 and re-joined in 1991.

World Bank high-income economies

According to the World Bank there are 76 "high-income economies".[30]

High-income OECD members

There are 30 members in the High-income OECD category, as determined by the World Bank.[31] The High-income OECD membership is as follows:

23 countries in Europe:

3 countries in Asia:

3 countries in the Americas:

2 countries in Oceania:

Economist's quality-of-life survey of 2005

Research about standard of living and quality of life by the Economist Intelligence Unit resulted in a quality-of-life index, covering 111 countries. As of 2005, the top 30 countries are:[32]

Newsweek's the world's best countries Index of 2010

Newsweek published in 2010 the "world's best countries" index, measuring "education, health, quality of life, economic dynamism, and political environment" in 100 countries. As of 2010, the top 30 countries are:[33]

The top 30 countries in terms of quality of life are:

See also


External links

  • IMF (advanced economies)
  • The Economist (quality of life survey)
  • The World Factbook (developed countries)
  • United Nations Statistics Division (definition)
  • List of countries, United Nations Statistics Division (developed regions)
  • World Bank (high-income economies)
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