Question

What is the main criterion used by the World Bank in classifying different countries? Describe its limitations.

Answer 1

Heya !!

Per Capita Income or average income is the main criterion used by the World Bank for classifying different countries.

Limitations of per capita income are as follows :-

1) It unables to show how income is distributed among the people of the country.

2) Cost of pollution is not considered.

3) Some other important aspects like infant mortality rate, literacy rate, net attendance ratio etc are not considered while calculating per capita income.

Answer 2

Per Capita Income is the main criterion used by the World Bank in classifying different countries. The limitation of this criterion are:

Per capita income is useful for comparison but it doesn't show the distribution of income.

It also ignores other factors such as infant mortality rate, literacy level, healthcare, etc.

Per capita income does not give the true picture as there is a huge population which does not earn at all like children and the senior citizens but they are also included while calculating per capita income. National income rises but its distribution make the rich richer and the poor poorer.