question_answer

    In what respects is the criterion used by the UNDP for measuring development different from the one used by the World Bank? Explain.     Or What is the main criterion used by the World Bank in classifying different countries? What are the limitations of this criterion, if any? In what respects is the criterion used by the UNDP for measuring development different from the one used by the World Bank?

Answer:

                  World Bank publishes World Development Report every year measuring development in different countries. It uses the criteria of per capita income and distinguish countries as rich country, middle income group and lower income group according to the limit of per capita income of the countries. In 2004 it decided ` 4,53,000 is the minimum limit of per capita annual income to become a rich country and ` 37,000 as the maximum per capita annual income for lower income countries. But the report excludes some smaller countries and many Middle-East Countries from the rich countries even though their per capita annual income is above the limit. It is because inequality and lower standard of living. It is seen that per capita income cannot reflect the penetration of development or distribution of income in the society. So, UNDP has a set of improved parameters to compare countries. UNDP uses quantity of development as well as quality of development to find out real development. For quantitative measure it uses per capita income and for developing countries and for under developed countries it uses adjusted per capita income or purchasing power parity. For qualitative measure it uses standard of living i.e. life expectancy, level of education i.e. literacy rate, gross enrolment ratio. Taking all these aspects into consideration UNDP publishes Human Development Report (HDR) every year.