How Has the Developing World Changed since the Late 1990s? A Dynamic and Multidimensional Taxonomy of Developing Countries - Working Paper 375

Many existing classifications of developing countries are dominated by income per capita (such as the World Bank’s low, middle, and high income thresholds), thus neglecting the multidimensionality of the concept of ‘development’. Even those deemed to be the main ‘alternatives’ to the income-based classification have income per capita heavily weighted within a composite indicator. This paper provides an alternative perspective: clusters of developing countries. We take 4 ‘frames’ on the meaning of development: economic development, human development, better governance, and environmental sustainability. We then use a cluster procedure in order to build groups of countries that are to some extent internally ‘homogeneous’, but noticeably dissimilar to other groups. The advantage of this procedure is that it allows us identify the key development characteristics of each cluster of countries and where each country fits best. We then use this taxonomy to analyze how the developing world has since the late 1990s in terms of clusters of countries and the country groupings themselves.