When being a ‘developing country’ is useful

While the ‘developed’ and ‘developing’  categories are still common labels applied to dividing the world’s countries, dispute over where exactly these dividing lines are drawn frequently generates criticisms of their antiquated nature.  This is more than an academic exercise; as David Bosco at Foreign Policy writes, there are some real economic consequences at stake:

“But it turns out that wanting to develop and wanting to be classified as “developed” are two quite different things. Particularly when it comes to international trade, there are pocketbook reasons that a country might prefer to remain “developing” long after economic data and common sense remove it from that category. Some of the key international trade agreements underlying the World Trade Organization, in particular, offer special benefits to developing countries…

“For its part, the WTO has no classification system. Instead, countries declare their status and, consequently, their eligibility for the trade benefits accorded to developing countries. They often do so à la carte, claiming developing country status for certain agreements but not others. This murky honor system produces some odd results.  South Korea, Mexico, and Turkey are members of the elite G-20 and the OECD (traditionally thought of as the rich-country club) but when it comes to WTO matters, they sometimes claim to be developing. Israel is another OECD member that has taken advantage of developing-country benefits…

“Not that there’s much Washington, Tokyo or Brussels can do about it. The practice of self-declaring is by now built deep into the WTO structure, and attempts to reform the system have gotten nowhere. For the time being, a developing country at the WTO is whoever claims to be one.”

Self-declaring is also built into the UN Framework Convention on Climate Change structure, in the division between Annex I and non-Annex I parties, which generates different obligations and commitments over reducing emissions, contributing finance, and so on.

This apparent anomaly is a familiar theme on this blog, and my occasional posts on this subject constitute a mini ‘Not Quite the End of the Third World’ series. As before, my purpose is simply to suggest that our understandings of what developing countries are is not something that can be reached through purely objective (i.e. statistical) means.

In a parallel universe, the dividing line between the developing/developed labels would simply be in crossing some statistical line – some measure of per capita income, or emission levels, or so on. Deciding what the measure is may be contentious – but once the process is settled on, then it would seem to work pretty smoothly. In our current universe, one method may be via the Human Development Index, which produces neat, comparable scores and allows for a high/medium/low division in terms of human development.

But almost any sort of label matters more than just what it describes, because the label itself is related to some sense of identity – a statement about what that state is, and what it is not. Who are my friends, and who are my enemies? Different benefits and costs come into play, ones that aren’t reducible to statistical claims.

Yes, there may be some instrumental exploitation of these categories, taking advantage of the material benefits offered by falling into one category and not another. But I’d suggest that there is also some pull created by a particular identity claim upon a state, which is why from the perspective of a given state, it still seems entirely unsurprising that it might continue to describe itself as a developing country as opposed to a developed one (even if it does so inconsistently from issue to issue). Normative reasons can exist alongside instrumental reasons.

For all the suggestions that the developed/developing distinction is irrational based on the economic data, or beyond common sense, then – these categories are likely to be with us for some time yet.

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