Growing up in a western European country, it is hard to avoid the terms ‘developed’ and ‘developing’ as a framework for viewing the entire world. A brief online search reveals dozens of articles from the Financial Times, the Guardian, the Economist and other news sources using this language, and here at Oxford it is possible to take papers with names like ‘Economics of Developing Countries’. There’s nothing inherently bad about this; these are terms that most of us are familiar with, and they can be useful in conceptualising the world and understanding the magnitude of the gap that exists between the West and most other countries. However, this framework has often come under fierce criticism as well, and particularly in light of the COVID-19 pandemic, in which rich countries have been far worse than poorer ones both in terms of human and economic cost, it is reasonable that these terms should undergo some interrogation. Should we divide the world simply into two categories, developed and developing?
Start with what these terms actually mean. There is no established United Nations convention for determining what countries are classified as ‘developing’, but traditional measures include Gross Domestic Product (GDP) per capita, a relatively smaller industrial base and low Human Development Index (HDI) compared to other countries. The International Monetary Foundation uses per capita income level, export diversification, and degree of integration into the global financial system, and in reality, this categorisation has come to include the vast majority of countries outside of Europe, North America, Australia, New Zealand and Japan. Interestingly, several countries that have recently been upgraded to the level of ‘developed’ (such as the United Arab Emirates) have maintained their ‘developing’ status as a way of achieving favourable treatment from bodies such as the World Trade Organisation. In most cases though, this lens seems valid: some countries are rich, and some are poor, and this is a way of distinguishing between the two.
The reality is more complicated. Mathis Wackernagel has argued that the binary labelling of countries as “neither descriptive nor explanatory. It is merely a thoughtless and destructive endorsement of GDP fetish.” In his view, there are not two types of countries, but over 200, all faced with the same laws of nature, yet each with unique features. Hans Rosling has elaborated on this critique, saying that the binary distinction is unhelpful and arbitrary, especially considering the fact that the vast majority of people are middle income. He has proposed an alternative model involving four categories: ‘Level 1’, where one billion people live, includes people living on $1 to $2 per day. ‘Level 2’ has three billion, living on around $4 per day, while ‘Level 3’ has two billion on $8 to $32. It is at this level that most people have access to clean water and stable electricity. Finally, there is ‘Level 4’, where one billion people live on incomes above $32 per day. This is categorisation is useful for two reasons: firstly, it allows us to differentiate between countries and regions more easily than in a simple rich/poor dynamic, but it also enables us to more easily identify regional or social disparities within countries, which can assist in identifying places where income inequality is higher.
The ongoing pandemic raises more questions about whether the ‘developed’ and ‘developing’ dichotomy is useful. Many in the Western media are scratching their heads as they look at how the world has responded: why has the West fared so poorly? Ten out of the top twenty countries with the highest death count per million people are European, and it is the economies of these ‘developed’ countries that have seen the most disruption due to lockdown. Most of Africa and Asia have been spared the worst of the disease and all that comes with it. Some of the reasons for this are due to factors such as a younger demographic profile or greater use of outdoor spaces, but others are more artificial. Many African nations have seen the impact of disease outbreak more vividly in recent years because of the Ebola virus, leaving them more alert and more prepared for the oncoming storm. The response was coordinated and swift (two qualities lacking in Europe’s initial reaction), with some impressive results. South Africa implemented one of the world’s strictest lockdowns on 27 March, which contributed to a decrease of the rate of infections from 42% to 4%, while Rwanda imposed a ban on all non-essential travel within the country only six days after the first case was detected. Vietnam is another country that has handled the outbreak remarkably. Much of this came from its strong investment in health infrastructure after the 2003 SARS outbreak, with an average increase of 9% in public health expenditure between 2000 and 2016. Its previous experience with SARS also contributed to the design of effective containment strategies, which included quarantine measures based on exposure to risk rather than symptoms. If you, like me, are a Western European, it hurts to watch your own government’s dismal response when other nations have performed so admirably.
What conclusion can be drawn from this? You can quickly point out that Europe may have fallen down on its pandemic strategy, but it still outperforms countries like Vietnam in terms of life expectancy and freedom of speech. In my view, however, the lesson we should take is that the division of countries into ‘developed’ and ‘developing’ is unhelpful as it promotes the idea that some countries are better than others; even the word ‘developed’ implies a sense of being finished and complete, which we clearly know is not the case. It might also promote bad policy, if people see a country like Sweden, ostensibly one of the most ‘developed’ in the world, and decide to emulate its lockdown policy, which we know now resulted in failure. Richer countries don’t know everything, and they should have the capacity to learn from middle-income and lower-income ones, and this would be easier without the baggage of outdated labels. The World Bank has already begun to phase out the use of language like ‘developed’ and ‘developing’. It’s time we did too.