What is the main criterion used by the World Bank in classifying different countries? What are the limitations of this criterion, if any?

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asked Jul 16, 2017 in Economics by sforrest072 (157,439 points) 60 409 936

1 Answer

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answered Jul 16, 2017 by Abhishek Kumar (14,593 points) 5 9 35
 
Best answer

The main criterion used by the World Bank in classifying different countries is the per capita income or average income of a person in a country. 

Limitations of this criterion:

It does not tell us about how this average income is distributed among the people in the individual countries. Two countries with the same per capita income might be very different with regard to income distribution. One might have equitable distribution of income while the other might have great disparities between the rich and the poor.

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