The World is Getting Richer: Developing Economies Fall from 58% to 39% of All Countries in 15 Years

Great post from Mark Perry of "Carpe Diem."

"Don Boudreaux at Cafe Hayek provides a link to this July 2011 report on World Bank Income Groups, which includes the graph above (click to enlarge) based on the World Bank's annual review and re-classification of countries into four income groups—Low, Lower Middle, Upper Middle and High. From the report:

"More interesting is the shift over the last two decades of countries out of the bottom two groups and into the top two groups (see chart above). The number of Low-income and Lower Middle-income countries, often referred to as ‘developing economies’, is clearly diminishing."

MP: Based on "eyeballing" the data in the chart, we can compare 1996 to 2011:

1996: There were about 125 countries classified in the bottom two categories: Low (income per capita of $1,005 or less) or Lower/Middle ($1,006 to $3975 per capita income), and 80 countries classified in the top two categories: Upper Middle ($3,976 to $12,275) or High ($12,276 or higher).

2011: The number almost exactly reversed between the two lower and two higher groups: In 2001, there were only about 90 countries in the two low-income categories (vs. 125 in 1996) and 125 countries in the two high-income categories (vs. 80 in 1996).

Bottom Line: In just the 15-year period between 1996 and 2011, there were about 40 countries that moved from the two lower income groups to the two high-income categories, which is about 20% of the countries in the world that moved from "developing economy" status in 1996 to Upper Middle/High Income status by 2011. We could say that in 1996, the World Bank classified about 58% of the world's economies as low-income or "developing," and by 2011 that percentage had fallen to only 39%.

Yes, the world is clearly getting richer, as Don points out.

Related: See this November 2009 CD post "New Study Shows Significant Drop in World Poverty.""