Syndicate content

Add new comment

Submitted by Will Prince on

Martin,

The original analytical high-income threshold of $6,000 in 1987 prices that was created in 1989 was agreed to by the Bank's Executive Board in order to have all the countries previously classified as "industrial" classified as high income. Updating that threshold each year with the international inflation rate gets you to $12,616 in 2012. It's important to stress Shaida's point that the analytical classifications have no bearing on the World Bank's lending operations. When consulted by users we advise they apply these classifications flexibly and consider other factors if they are going to use them for any purpose, such as in their allocation decisions, since (as noted on the classification website) "GNI does not, by itself, constitute or measure welfare or success in development." No single measure does. You ask if there is a rationale for these thresholds? One purpose for the Data Group is as a way to group countries for presentation in publications, such as World Development Indicators. Are there better ways to group countries than the method we are using? That's what our review is all about. As such, we look forward to the results of the 2011 round of The International Comparison Program (ICP) to be released in December (http://icp.worldbank.org/), as a careful analysis of the new purchasing parity power data will inform our decision on future classification schemes.

Thanks,
Will