## Classifications of Countries BasedOn their Level of Development: How it is Done and How it Could Be Done

_IMF Working Papers, February 1, 2011_

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## Bibliographic details
- Authors: Lynge Nielsen
- Published: February 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455216789.001

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### Overview
- The paper analyzes how the UNDP, the World Bank, and the IMF classify countries based on their level of development.
- Existing classification systems are found lacking in clarity with regard to their underlying rationale.
- The paper argues that a country classification system based on a transparent, data-driven methodology is preferable to one based on judgment or ad hoc rules.
- An alternative methodology is developed and used to construct classification systems using a variety of proxies for development attainment.

### Main findings and argument
- Current systems used by UNDP, the World Bank, and the IMF lack clear articulation of their underlying rationale.
- A transparent, data-driven country classification system is argued to be preferable to systems based on judgment or ad hoc rules.
- The paper develops and applies an alternative methodology to construct classification systems using multiple proxies for development attainment.

### Methodology developed
- The paper develops a transparent, data-driven methodology for classifying countries by level of development.
- The methodology is applied to construct classification systems using a variety of proxies for development attainment.
- Emphasis is placed on replacing judgmental or ad hoc rule-based classifications with empirically grounded procedures.

### Policy implications and recommendations
- Move from judgment-based or ad hoc rule-based classification systems toward transparent, data-driven classification systems.
- Use a variety of development proxies when constructing country classification systems to capture multiple dimensions of development attainment.

### Subjects and keywords
- Subject: Banking, International organization, Personal income, Poverty, Purchasing power parity
- Keywords: balance of payments, country classification system, development country, WP

*Content derived from "Classifications of Countries BasedOn their Level of Development: How it is Done and How it Could Be Done", IMF Working Papers, February 1, 2011.*

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## Content in this bundle

- **1. The World Bank's Operational Income Thresholds**
  - [1. The World Bank's Operational Income Thresholds (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp1131.pdf.md){rel="alternate" type="text/markdown"}
  - [1. The World Bank's Operational Income Thresholds (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp1131.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/classifications-of-countries-basedon-their-level-of-development-how-it-is-done-and-how-it-24628_