Question

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

Answer 1

The main criterion is used by the World Bank in classifying different countries and the limitations of the above criterion are as follows:

        World Bank has different matching criteria while classifying different countries. However, Per Capital Income is the major among all these criteria. There are some limitation of using such criterion also, such as -

• It is unable to provide the data on distribution of income, which is a huge failure as distribution of income is a major factor determining a country's all over strength.

• It also doesn't pay any importance on infant mortality rate.

• It ignores literacy level of a country also.

• Healthcare is also another factor which is ignored by the World Bank.

Answer 2

The main criteria chosen by World Bank in classifying different countries are GDP and by measuring income the countries are classified as developed, developing or under-developed.

Explanation:

• The limitation of this criterion is that GDP measure the amount of money the country is earning based on the goods and services produced by it.
• However, it does not measure the equitable distribution of income in the country.
• This means that the country with higher GDP value can have more wealth concentration in the hands of fewer rich people while a larger population is devoid of much wealth.

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