Academic journal article Academy of Marketing Studies Journal

Assessing the Level of Economic Development in Countries Transitioning to Information Orientated, Postindustrial, Societies

Academic journal article Academy of Marketing Studies Journal

Assessing the Level of Economic Development in Countries Transitioning to Information Orientated, Postindustrial, Societies

Article excerpt

INTRODUCTION

In today's world there are more than 200 states and state formations. All are at varying stages of socioeconomic development, with differing standards of living and diverse roles in the world economy. Disparity in the economic development of separate states and regions in the world is a phenomenon characteristic of all stages of the development of international economics.

International organizations and experts have attempted to devise universal approaches towards grouping countries by their level of economic development. Level of economic development, as a term, is understood as the economic climate (eg. group of countries or economic regions) at a certain moment in history. However, this term is multidimensional; the level of economic development includes such characteristics as; the GDP output level, as well as the level of GDP output in relation to per capita purchasing ability; the structure of social production, meaning, the proportion of industry and agriculture in the world's economy; the proportion of production used by the means of production and the share, scale, and pace of development of advanced subdivisions of the economy; the quantitative level of employment; the level of exploitation of natural resources, meaning, the contribution of land, fuel, energy and mineral resources; the organization and effectiveness of social production, meaning, labor productivity.

Each of the criteria listed above is essential. However, which one of them to use for placing a country in one group or another is a question that has not yet been answered in contemporary scientific and specialized publications. Several approaches can be identified which are used by international institutes for the comparative analysis of the level of economic development in individual countries.

THEORY

The widest recognition in statistical publications has been given to the so-called "standard classification" of countries. This model is currently used by the United Nations Conference on Trade. The standard classification identifies three distinct groups of countries:

* developed or industrialized countries; this group includes countries which are members of the Organization for Economic Cooperation, with the exception of Mexico, the Republic of Korea and Turkey, and new countries, meaning, members of the European Union and Israel;

* countries with transitional economies, for example, Southeastern Europe and the Commonwealth of Independent States (CIS);

* developing countries, meaning, all other countries and subnational entities not included in the previous groupings (Report on Trade and Development 2012).

Another kind of classification has been proposed by the International Monetary Fund (IMF). In its 2014 report, the IMF identified three groups of countries: "Countries with developed economies", "Countries with developing markets" and "Low-income countries". The report also used the following terms: "developing countries/small states," meaning, countries with a population of no more than 1.5 million people. The report also used a separate grouping for some Middle Eastern countries, specifically, "Middle Eastern countries going through a transitional period," using examples such as Yemen, Jordan, Tunisia, Morocco, Egypt (International Monetary Fund, 2014, p.14).

This classification is also not entirely effective. In the IMF's system there are no criteria by which countries can be classified into one group or another. An additional classification system has been proposed by the World Bank. The standard used by the World Bank assesses countries by their gross domestic product (GDP) per capita. According to this classification system, countries are divided into three groups: countries with low, medium, and high income levels. The medium income range is includes two subgroups: countries with incomes above and below the average.

For each group of countries, the World Bank has defined threshold amounts. …

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