Developed vs Developing Countries: Definitions and Differences

Q: Is China a developed or developing country?

China is classified as a developing, upper-middle-income economy by the World Bank and an emerging economy by the IMF, despite having the world's second-largest GDP. Its income per person is still well below high-income thresholds.

Q: Is Third World the same as developing?

Not exactly. Third World was a Cold War political term for countries aligned with neither the West nor the Soviet bloc. Today developing or low- and middle-income are the accurate, non-political replacements.

Developed countries have high incomes, advanced industry and services, and high living standards; developing countries have lower incomes and rely more on agriculture. There is no single official list: the World Bank sorts economies by income, the IMF by “advanced” vs “emerging”, and the UN by the Human Development Index.

Table of Contents

What is the difference between developed and developing countries?

A developed country has a high income per person, a diversified economy led by services and advanced industry, and strong health and education outcomes. A developing country has a lower income and depends more on agriculture and primary activities. There is no single official split: different bodies draw the line differently.

Aerial view of a modern city skyline of high-rise buildings representing developed, high-income economies — Developed economies are led by services and advanced industry. Photo: Pexels.

How are countries classified?

Three systems dominate. The World Bank sorts economies by gross national income per capita, with high-income economies above about $14,375 (World Bank, latest). The IMF splits the world into “advanced economies” (about 40-plus countries) and “emerging and developing economies” (IMF, 2026). The UN ranks countries by the Human Development Index, which blends health, education and income into one score (UNDP).

Indicator	Developed	Developing
GNI per capita (World Bank)	High income (> ~$14,375)	Low to middle income
Human Development Index	Very high, e.g. Iceland 0.972	Low, e.g. South Sudan 0.388
Life expectancy	~80–81 years	~64–65 years (low income)
Main economic sector	Services and advanced industry	Agriculture and emerging industry

Sources: World Bank (income), UNDP Human Development Report 2025 (HDI), OECD/World Bank (life expectancy).

Source: World Bank income groups (approximate counts, latest classification).

Examples of developed and developing countries

At the top of the Human Development Index sits Iceland, with a score of 0.972, followed by Norway and Switzerland at 0.970 (UNDP, 2025). These are wealthy, service-based, high-life-expectancy economies. At the other end, South Sudan (0.388), Somalia and the Central African Republic rank lowest, with economies still built on subsistence agriculture and life expectancy roughly 15 years shorter than in rich nations.

Aerial view of terraced agricultural fields where farming remains a major share of employment — In many developing economies, agriculture is still a major share of employment. Photo: Pexels.

Key takeaways

Developed countries have high incomes and service-led economies; developing countries have lower incomes and rely more on agriculture.
There is no single official list: the World Bank uses income, the IMF uses advanced vs emerging, the UN uses the HDI.
High-income economies exceed about $14,375 GNI per capita (World Bank).
HDI runs from Iceland (0.972) to South Sudan (0.388) (UNDP, 2025).

One of the clearest differences between developed and developing countries is where people work. Economists call the shift from farms to factories and offices structural transformation.

As countries develop, workers leave the farm

60 most populous countries, 2000 → 2025

Each dot is a country moving from 2000 to 2025. Almost every one moves right (richer) and down (fewer farm jobs). Developing countries still employ a large share of their people in agriculture; in developed countries it is only a few per cent. Data: World Bank, World Development Indicators (GDP per person in constant 2015 US dollars; employment in agriculture, modelled ILO estimates). Tap or click to pause.

Richer countries live longer, up to a point: the Preston curve

One of the clearest differences between developed and developing countries is how long people live. In 1975 the demographer Samuel Preston showed that life expectancy rises steeply with income in poor countries and then levels off. The pattern, now called the Preston curve, still holds.

In 35 countries where GDP per person was under $5,000 in 2024 (at purchasing power parity), average life expectancy was 64 years; in the 48 countries above $50,000 it was 82 years (World Bank). Moving from very poor to middle income buys a lot of extra years: clean water, vaccines, enough food and basic health care are cheap compared with the gains they bring.

Richer countries live longer, up to a point

Life expectancy vs income, 195 countries, 2024 (bubble size = population)

Each bubble is a country, sized by population. Life expectancy rises fast with income at low levels and flattens out among rich countries. Data: World Bank, World Development Indicators (2024). Tap or click to pause.

Income is not the whole story. Countries far above the curve show what good public health can achieve: Costa Rica’s life expectancy (81 years) is higher than that of the United States (79) at about a third of the income, and Bangladesh (75) far outlives Nigeria (55) at a similar income. Over time the whole curve has also shifted up, as medical knowledge spreads, so a country today lives longer than a country with the same income did a century ago.

Concept check

Is China a developed or developing country?

China is classified as a developing (upper-middle-income) economy by the World Bank and an emerging economy by the IMF, despite having the world’s second-largest GDP. Its income per person is still well below high-income thresholds.

Which countries are high-income?

Around 87 economies are high-income, including the United States, Germany, Japan, Australia and most of Western Europe. The World Bank sets the high-income line at roughly $14,375 of GNI per capita.

Is “Third World” the same as developing?

Not exactly. “Third World” was a Cold War political term for countries aligned with neither the West nor the Soviet bloc. Today “developing” or “low- and middle-income” are the accurate, non-political replacements.

Sources

World Bank, Country and lending groups (income thresholds) — retrieved 2026-07-04 — worldbank.org
UNDP, Human Development Report 2025 (HDI) — retrieved 2026-07-04 — hdr.undp.org
IMF, World Economic Outlook, Groups and aggregates — retrieved 2026-07-04 — imf.org
OECD, Society at a Glance 2024 (life expectancy) — retrieved 2026-07-04 — oecd.org
Our World in Data, World Bank income groups explained — retrieved 2026-07-04 — ourworldindata.org

Last updated: October 22, 2026

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As countries develop, workers leave the farm: Scatter chart. Each dot is a country; it moves from its position in 2000 to its position in 2025. Horizontal axis: GDP per person (constant 2015 US dollars, log scale). Vertical axis: share of jobs in agriculture. Almost every dot moves right an

Post Author

Juan David Montoya

Economist & Senior Economic Researcher. Editorial Director of EconomicActivity.org. Specializes in macroeconomic indicators, international trade flows, and economic sector taxonomy (ISIC Rev. 4). Analyzes multilateral data from the World Bank, IMF, UN Comtrade, and OECD.