Economics
What is the main criterion used by the World Bank in classifying different countries? What are the limitations of this criterion, if any?
Answer
"Per capita income" is the main criterion used by the World Bank in classifying different countries. The main limitation of this criteria is that it reflects the average income of a person but does not depicts the distribution of the wealth in the country. A high per capita income of a country may be due to a high earning section while there may be a section of population which is poor.
Related Questions
Which of the following neighbouring countries has better performance in terms of human development than India?
- Bangladesh
- Sri Lanka
- Nepal
- Pakistan
Assume there are four families in a country. The average per capita income of these families is Rs 5000. If the income of three families is Rs 4000, Rs 7000 and Rs 3000 respectively, what is the income of the fourth family?
- Rs 7500
- Rs 3000
- Rs 2000
- Rs 6000
In what respects is the criterion used by the UNDP for measuring development different from the one used by the World Bank?
Why do we use averages? Are there any limitations to their use? Illustrate with your own examples related to development.