How do developed countries differ from the developing ones?

Currently, there is no single generally accepted rulebook that accurately sorts the world’s countries and regions into “developed” and “developing.”

This could be the result of the disparity in development outcomes between nations and the difficulty in categorizing every nation accurately into two groups.

Yet, organizations such as the United Nations (UN) and the World Bank attempt to do so, mainly because a ‘developing’ status allows a nation to benefit from foreign aid.

Although evaluating a country’s economic wealth can be achieved by analyzing its GDP, several additional metrics can also be used, including the Human Development Index (HDI), Gross National Income (GNI) and Human Capital Index (HCI). Although some are more accurate than others, each metric can be considered to be correct since development may be interpreted in different ways.

• GNI is the sum of all the money that a country’s citizens and enterprises have made during a certain timeframe.
• HCI estimates the anticipated productivity of a child born today as a future employee.
• HDI is an indicator of average performance in three important areas of human development: enjoying a long, healthy life, having access to education, and having a respectable level of living.

The UN divides the world’s nations into two main groups: developed and developing.

The World Bank uses other terms to define nations around the globe – these are upper-middle-, lower-middle-, and low-income countries.

Developed vs. developing countries at a glance

Prior to moving forward with the detailed description of how different organizations define developing and developed countries, we recommend analyzing the table below, which summarizes the main criteria and differences.

Note: Read every row as “usually,” not as a rule. Each description reflects a different institution’s measurement unit, and even though the measures correlate, they do not always agree on the same country.

*Do not consider each row as a definition by itself. A nation can sit on the “developed” side of one metric while being categorized as “developing” in another.

What is a developed country?

IGI Global, an international academic publisher, states that a developed nation boasts high GDP per person, has well-established industrial bases and infrastructure and supports a business-friendly climate. These countries also have high HCI and sound governmental institutions.

The World Bank defines high-income nations and territories as those that boast a GNI of over US$14,375 per capita (as of July 2026-June 2027, based on the 2025 Atlas-method GNI per capita).

For lower GNI values, the World Bank has three more tiers:

• Upper-middle income (US$4,636-14,375).
• Lower-middle income (US$1,176-4,635).
• Low income (US$1,175 or below).

What is a developing country?

A country marked as developing generally falls outside the high-income tier. This term defines a low-income nation that relies mainly on natural resources, has thinner infrastructure, an underdeveloped industrial foundation, and governmental organizations with a low level of efficiency. That’s the standard academic framing, at least.

Countries such as these are working to improve their economies and societies through sound policy execution and social and economic maintenance.

Still, it’s worth mentioning that in practice, the “developing countries” category is rather wide and can hardly accurately describe the nations within it.

For example, Vietnam and South Sudan are both classified as developing countries, though the former is an upper-middle-income economy, boasting a fast-growing manufacturing sector, while the latter is one of the world’s poorest states with the most fragile environments.

What does ‘development’ status mean?

Development status identifies whether nations have the opportunity to benefit from development aid and trade preferences under the regulations of multilateral or bilateral institutions. Some consider this to be the main reason why the characteristics of the terms ‘developed’ and ‘developing’ vary among different organizations.

Numerous criteria can be used to determine whether a nation is categorized as developing or not. These criteria often relate to the nation’s ability to accept development assistance in accordance with the regulations of a multilateral or bilateral organization.

Because each institution puts the “developed” or “developing” tag on countries for its own purpose (the World Bank for lending decisions, the WTO for trade rules, the OECD for aid accounting), the lines separating “developed” and “developing” sometimes do not align.

Developed or developing – who decides? Four classifications that disagree

Classification No. 1 – World Bank income groups

The largest development financing organization has four income tiers, sorted by GNI per capita, calculated in U.S. dollars (using the Atlas methodology) and adjusted to balance out short-term fluctuations in currency rates. The current cycle covers 218 economies.

Based on the 2026 update, six countries moved up, and none of the countries dropped. Five nations, including Jordan, Micronesia, the Philippines, Sri Lanka and Vietnam, advanced from the lower-middle to upper-middle income category, while the African nation Togo progressed from low to lower-middle income.

Did you know that, according to the World Bank, the share of global economies categorized as low-income has dropped from 30% to 11% since 1987?

The map below illustrates the World Bank Group 2025 country classification based on income level

Source: World Bank

Classification No. 2 – UN DESA (United Nations Department of Economic and Social Affairs)

For its economic forecasting, UN DESA classifies the world economies into three analytical buckets in its World Economic Situation and Prospects (WESP) reports:

• Developed economies.
• Economies in transition.
• Developing economies.

UN DESA goes beyond the GNI criteria applied by the World Bank and combines it with a country’s trade structure (in terms of oil, coal, and natural gas export/import), real GDP, and the Human Asset Index and Economic and Environmental Vulnerability Index elaborated by the UN.

Classification No. 3 – UNDP’s Human Development Index (HDI)

HDI ranks nations based on life expectancy, education, and income, with the highest score being the one above 0.800.

Even if, based on the World Bank ranking, a country is classified at a rather low level, it can be shown higher based on the HDI, since this one estimates outcomes rather than earnings (or vice versa).

Check out the graph below to get a better understanding of HDI.

Source: UNDP

Classification No. 4 – OECD-DAC’s list of official development assistance (ODA) recipients

Only nations and regions on the Development Assistance Committee’s (DAC) List of ODA Recipients are eligible for funds that officially count as aid.

The list is evaluated each year, and countries are grouped into:

• Least developed countries (LDCs).
• Low-income countries, which are not LDCs.
• Lower-middle-income countries and territories, which are not LDCs.
• Upper-middle-income countries and territories, which are not LDCs.

Based on the latest list, four countries flagged for high income by the World Bank remain eligible for ODA: Guyana, Panama, Nauru, and Montserrat.

That flagged high-income detail is a great example of the contradiction we talked about earlier – the same country has two contradictory statuses at once. Take Guyana, for example – a high-income nation according to one measure (World Bank) and still officially an aid recipient by another.

Least developed countries (LDCs): the smallest and strictest category

UNCTAD currently lists 44 nations as least developed, with the list being evaluated by the UN Committee for Development Policy based on three criteria:

• GNI per capita
• A human assets index
• Economic and environmental vulnerability index.

This is considered to be strict criteria, and according to it, eight countries have moved out of the LDCs category:

• Botswana (1994)
• Cabo Verde (2007)
• Maldives (2011)
• Samoa (2014)
• Equatorial Guinea (2017)
• Vanuatu (2020)
• Bhutan (2023)
• Sao Tome and Principe (2024)

In 2026, Bangladesh, the Lao People’s Democratic Republic, and Nepal are expected to be moved out of the LDCs as well. In 2027, UNCTAD expects the Solomon Islands to advance, and in 2029, the same is anticipated for Cambodia and Senegal.

Top 15 economies by GDP per capita

According to data provided by the World Bank (2023, 2024, 2025), the top 15 developed nations based on GDP per capita (current US$) are:

Important note: Six out of the 15 countries and regions on this list are microstates or dependent territories (Monaco, Liechtenstein, Bermuda, the Cayman Islands, the Faroe Islands and Macao). No organization bases its classification of development only on GDP per capita because this measure favors small, finance- , and tourism-heavy governmental structures.

Top 15 countries by Human Development Index (HDI)

According to data from the UNDP’s Human Development Report 2025 (presenting values for 2023 as the most recent), the top 15 developed countries based on HDI are:

Source: UNDP

As previously noted, “Very high human development” starts at an HDI of 0.800.

Why the “developed/developing” split is being retired

The UN Statistics Division deleted the categories.

In 2021, the M49 statistical codes 514 (“Developed regions”) and 515 (“Developing regions”) were officially removed from the groupings. According to the organization’s standing note, the UN system does not have an established definition of developing and developed countries (or areas).

*The Standard country or area codes (known as M49) were introduced in 1996, and in it “Developed regions” and “Developing regions” were separated for statistical purposes.

The World Bank stopped aggregating by “developed” and “developing”.

Today you won’t find the countries under the “developing” category within the World Bank’s Development Indicators. At the same time, it notes that the term “developed” is also no longer suitable, as it cannot align well with history.

The WTO never defined “developed” and “developing” countries.

According to the official statement of the organization, members self-designate as “developing” or “developed,” but other members have the opportunity to challenge the decision of a member to benefit from provisions designated to developing countries.

Still, all of the above-mentioned does not indicate that the split is dead. UN DESA’s World Economic Situation and Prospects report still uses the terms “developed” and “developing” economies. In addition, a lot of aid architecture still runs on this division.

Some of the substitutes for these categories include “emerging markets” and “low- and middle-income countries,” and each term means something slightly different.

Frequently asked questions

What is the difference between a developed and a developing country?

It all comes down to the system you are using. Under the World Bank framework, the GNI-per-capita threshold separates high-income countries (above US$14,375) from the others. By UNDP’s HDI, it’s a score of 0.800 or above that separates the two.

How do you tell if a country is developed or developing?

You will not find a single test that would show what category a country is found in. The two most commonly cited are the World Bank’s income threshold and UNDP’s HDI cutoff of 0.800. Moreover, a country can be listed as developing in one and as developed in the other.

Is China still considered a developing country?

Yes and no. The World Bank classifies China as upper-middle income in the current cycle (July 2026), while at the WTO, China self-designates as a developing nation. Both are current, and both are correct; it’s just that the two systems measure different things. Based on HDI, China is described as a country with very high human development, with a score of 0.797 (just under the 0.800 threshold for “very high” human development).

Is the United States a developed country?

Yes, by every common measure: it’s a high-income country according to the World Bank classification; it has an HDI of 0.938 – very high (17th globally, HDR 2025), and it’s a country-donor rather than a recipient in OECD-DAC’s aid accounting.

How many least developed countries are there?

As of December 2025, there are 44 least developed countries according to the UN Trade and Development. However, Bangladesh, Lao PDR, and Nepal are expected to be removed from this list and advance in November 2026.

Final word

Although various nations are referred to as developed or developing, it can be challenging to make a comparison based on these standards. However, the metrics that are typically used to gauge a nation’s economic development are its GDP, GNI per capita, or HCI.

Which classification you should use depends on what you’re trying to do with it: for example, finance runs on the World Bank’s income groups, whereas trade runs on WTO self-designation. When it comes to aid eligibility, it all comes down to the OECD-DAC list, and human development comparisons run on HDI. There’s no single “correct” definition or description.