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A developing country is a country with low average income compared to the world average. The term has tended to edge out earlier ones, including the Cold War-defined "Third World".

The "developing" part of "developing country" may be considered euphemistic or perhaps optimistic, as many of the poorest countries are hardly developing at all; some have even experienced prolonged periods of negative economic growth. A developed country usually has an economic system based on continuous, self-sustaining economic growth. Development entails developing a modern infrastructure (both physical and institutional), and a move away from low value added sectors such as agriculture and natural resource extraction.

Measure of development

The term "developing country" often refers mainly to countries with low levels of economic development, but this is usually closely associated with social development, in terms of education, healthcare, life expectancy, etc.

The development of a country is measured with statistical indexes such as income per capita (GDP), the rate of illiteracy, and access to water. The UN puts forth a compound indicator using these lists of statistics, to create, a "human development index" which gives a sense of how developed countries are.

Developing countries are in general countries which have not achieved a significant degree of industrialization relative to their populations, and which have a low standard of living. There is a strong correlation between low income and high population growth, both within and between countries.

Nature of development

Even though a good part of the world seems to aspire to development, the term itself is criticized by those who think it is too centered on Western countries. The term implies a direction and a movement that the countries must follow; it implies an inferiority of the developing countries.

The terms utilized when discussing developing countries refer to the intent and to the constructs of those who utilize these terms. Other terms sometimes used are lesser developed countries or less developed countries (LDCs/LEDCs), underdeveloped nations or undeveloped nations, Third World nations, the South, or non-industrialized nations. Conversely, the opposite end of the spectrum is termed developed countries, more economically developed countries (MEDCs), First World nations, or industrialized nations.

The United Nations allows each nation to decide for itself whether it will be designated as "undeveloped" or "developing" (though many economists and other observers ignore the UN rule about self-designation).

To moderate the euphemistic aspect of the word developing, international organisations have started to use the term least developed countries (LLDCs) for the poorest nations which can in no sense be regarded as developing. That is, LLDCs are the poorest subset of LDCs. This also moderates the naïve tendency to believe that the standard of living in Somalia or Ethiopia is comparable to that in Brazil or Mexico.

The concept of the developing nation is found, under one term or another, in numerous theoretical systems having diverse orientations — for example, theories of decolonization, liberation theology, marxism, anti-imperialism, and political economy.

Sources of (under)development

According to different theories, sources of underdevelopment include:

• Intrinsic attitudes and aptitudes, real or used as justification
  • attitudes and culture of the people;
  • aptitudes and behavior of the elites and leaders;

• Legal structures and institutions
  • a breakdown in the rule of law
  • high corruption

• Extrinsic factors, real or used as justification
  • geopolitical or commercial interest that it creates compared to other countries;
  • place of the country in a historical and cultural system;
  • inadequate reforms imposed in counterpart with financing of last resort, by multilateral organizations (like the International Monetary Fund and the World Bank) to get out of situations of deficit and indebtedness in which the country is placed.
  • lack of interest in and comprehension for the specific dynamics of a nation, by multinational companies.

Typology and names of countries

Countries are often loosely placed into four categories of development:

1. Developed countries (Canada, United States, European Union members, Japan, Israel, Australia, New Zealand, Scandinavia, etc.)
2. Countries with an economy consistently and fairly strongly developing over a longer period (China, India, Brazil, South Africa, Costa Rica, Mexico, Turkey, Egypt, much of South America, Malaysia, Thailand, Possibly the former Warsaw Pact, etc.)
3. Countries with a patchy record of development (most countries in Africa, Central America, and the Caribbean excepting Jamaica (category 2); much of the Arab world falls in this category); also most of Southeast Asia, falls under this category excepting Malaysia and Thailand (category 2). 76% of the world's nations fall under this category.
4. Countries with long-term civil war or large-scale breakdown of rule of law or non-development-oriented dictatorship ("failed states") (e.g. Somalia, Sudan, Burma, perhaps North Korea)

The term "developing nation" is not a label to assign a specific, similar type of problem. One designates these nations depends on the angle at which one approaches them, and according to the solutions envisoned to solve their problems. Each one of these terms has meanings beyond its first appearance:

• Third World

The term was used for the first time by demographer Alfred Sauvy and refers to the Third Estate. The Third world does not include the nations of the liberal West ("First World") nor of the Soviet bloc ("Second World"), and to some extent were ignored because they could not throw strong support behind either. A Cold War era term which is increasingly deprecated.

• Countries of The South and The North

These terms originate from the fact that most developing countries (including many of the poorest) are in the southern hemisphere (south of the Equator), and most developed countries are in the northern hemisphere. However, the geographic distinction is not perfect — for example, Australia and New Zealand, both developed, are in the southern hemisphere, but not included in "the South". "North" and "South" are essentially euphemisms for "developed country" and "developing country", but are alternatives which are often preferred by people from the South because they avoid the loaded reference to "development".

• Rich and poor countries

These terms suggest a greater focus on income per capita. It should be noted that this statistic only reflects the statistical average wealth of a country's citizens; when income is distributed very unequally (as measured for example by the Gini coefficient) this figure may be misleading (see also kleptocracy).

• Industrialized and non-industrialized countries

Most countries that are currently being industrialized or are in advanced phases of industrialization, also have characteristics of a post-industrial economy.

See also

• Developed country
• Newly industrialized country
• Decolonisation
• Economic development
• Sustainable development
• Industrialisation
• G8
• World Bank
• List of developing countries according to the World Bank

• Development