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Research Article

Unpacking the ‘developing’ country classification: origins and hierarchies

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Pages 651-673 | Received 15 May 2022, Accepted 25 Jul 2023, Published online: 14 Aug 2023
 

Abstract

The division of the world into ‘developing’ and ‘developed’ countries has grown increasingly problematic in the past decades. Nonetheless, it remains embedded in legal documents, foreign policy discourse, and colloquial use. This paper explores this complexity by unpacking the different ways in which the ‘developing’ label is used in the international system. It argues that understanding the complexity around its use requires a rigorous analysis of the label’s diverse meanings and consequences. This is done by introducing a taxonomy that intersects two elements: (1) the source of the classification (External or Internal) and (2) the kind of hierarchy implied in the classification (Narrow or Broad). This two-by-two matrix generates four approaches in which the ‘developing’ vs ‘developed’ dichotomy is used: Technocratic, Elective, Northern Gaze, and Southern Solidarity. Each approach is explored empirically, illustrated by cases connected to international organizations and multilateral treaties. In doing so, the paper teases out the underlying reasons why the use of the dichotomy is so challenging, based on what kinds of contestation it generates, and which actors are pushing for demise or longevity (and where).

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 A category is a subsection of a group, created by putting together those with perceived similarities. A label is the name given to each category. Classification is the process of determining how each unit should be categorized; When used inside single quotes, the words ‘developing’ and ‘developed’ imply its use as a label; without the quotes, it refers to the verb (to develop).

2 This paper’s working definition of hierarchy draws from Mattern and Zarakol (Citation2016, p. 624): ‘broadly as any system through which actors are organised into vertical relations of super- and subordination.’

3 Still, as noted by an anonymous reviewer, while countries in the periphery might have agency in identifying themselves as ‘developing’, most of them had little real influence over the creation of this category.

4 The concept of the core/periphery division in the international system can be found in Raul Prebisch’s writings as early as 1946 (Love, Citation1980, p. 64).

5 As noted by the US’ Director of the Office of International Trade Policy, Clair Wilcox, in October 1946: ‘Members of the undeveloped-nations bloc’ were already urging ‘affirmative provision be made for the industrialization of undeveloped areas’ in the ITO’s charter (Wilcox, Citation1946, emphasis added).

6 Gini suggested the ranking of countries based on their industrial importance be drawn from a system of eight indices: Four absolute (e.g., Value of the total net production) and four relative indices (e.g., Ratio between the amount of special trade and the value of the total net production).

7 UNIDO uses an adjusted value of manufacturing value added (MVA) per capita (at PPP), obtained as a product of two ratio variables: MVApc (adjusted)j = GDPpc (at PPP)j x sj, where sj = MVAj/GDPj (UNIDO, n.d82.). ‘Industrialized Economies’ (IEs) include economies with adjusted MVApc higher than US$2,500 (PPP) or a GDP/pc higher than $20,000 (international PPP); all other countries are considered ‘Developing and Emerging Industrial Economies’ (DEIEs) (UNIDO, Citation2021, p. 184).

8 According to the IMF (Citation2021; emphasis added), the main criteria used to classify countries ‘are (1) per capita income level, (2) export diversification . . . and (3) degree of integration into the global financial system . . . Note, however, that these are not the only factors considered in deciding the classification of countries . . . This classification is not based on strict criteria, economic or otherwise, and it has evolved over time.

9 IMF voting, for instance, is determined by a quota system that is completely unrelated to this classification. Low-income countries (a World Bank classification) can have access to IMF loans at lower/zero interest rates, but this is not extended to all countries in the ‘Emerging market and developing economies’ group.

10 Each income band is determined based on gross national income (GNI) per capita data in US dollars, converted from local currency using the World Bank Atlas method (World Bank, n.d82.); These groups are different than the ‘Least Developed Country’ (LDC) classification, which yields important consequences for those labeled as such. While it is amply used by the World Bank (and several other IGOs), this list is set by a group of independent experts that report to UN’s ECOSOC.

11 Such is the case of the European Union’s Generalized Systems of Preference (GSP), International Fund for Agricultural Development (IFAD), World Intellectual Property Organization (WIPO), World Meteorological Organization (WMO), and the OECD’s criteria for Official Development Assistance (ODA) eligibility.

12 See UPU (Citation2013, pp. 316–319) for full details.

13 These numbers are taken from each country’s GSP schemes, available on UNCTAD’s website: https://unctad.org/topic/trade-agreements/generalized-system-of-preferences.

14 The origins of this approach can be traced further back to the concomitant negotiations to establish an International Trade Organization (ITO) and GATT in the late 1940s - where only the latter was successful. While open to all nations, only 23 signed the GATT, all of which had an advanced industrial profile, and sought to reduce tariffs for manufactured goods. In 1958, a GATT-commissioned a study on the trends in international trade (known as known as the Haberler Report) came out, focusing on situation of ‘less developed’ countries.

15 Measured in Gross National Income (PPP; current international $); numbers from World Bank database.

16 In the first document (WTO Citation2019a), China is mentioned 55 times, India 21 times, South Korea 20 times, Brazil nine, Israel eight, and Russia seven times.

17 Brazilian President Jair Bolsonaro, an open supporter of Pres. Trump, stated his indirect support for the initiative, stating Brazil would no longer self-identify as developing in upcoming WTO negotiations.

18 As per last Trade Policy Review of Israel (drawn up by the WTO Secretariat): ‘Israel has developing country status in the WTO’ (WTO, Citation2018, item 2.5).

19 Based on World Bank data (https://data.worldbank.org/).

20 Based on World Bank data (https://data.worldbank.org/).

21 In 1950, Spain’s GDP per capita (measured in US dollars at 1990 PPPs) was lower than that of Mexico, and Argentina’s was less than 5% smaller than that of France (Van Zanden et al., Citation2014, p. 67).

22 Kennedy Library, White House Central Files, Subject Files, Executive, Box 184, FG 296 U.S. Information Agency 1-20-61–7-31-61 (emphasis added).

23 The concept of ‘developing regions’ detailed which countries were considered developing. There is no explanation over why the word ‘regions’ was used instead of ‘countries.’ One possibility is it could have been to avoid claims of recognition of some jurisdictions as sovereign states.

24 A recent example involved Brazil: Pres. Bolsonaro (2019–2022) opened the path for Brazil to no longer be automatically treated as ‘developing’ in future WTO negotiations and gave little importance to Brazil’s ‘developing’ country alliances but did not discuss (at least not publicly) taking the country out of the G77.