New Income Groups

Background

The World Bank's income groups are useful for communication and operations, but this project examines three concerns:

• The conceptual basis for the thresholds separating income groups is not sufficiently clear.
• GNI per capita does not capture important differences in countries' development profiles and challenges.
• The current high-income threshold may be too low to represent a meaningful development standard.

Objective

Develop and compare alternatives that are conceptually defensible, informative about development, and feasible to update regularly. The project will initially examine two possible products rather than assume that either should replace the official income groups.

Current Roadmap

1. Prepare a presentation for colleague consultation.
2. Build a machine-readable, provenance-preserving literature base.
3. Use the evidence and feedback to prioritize the research design.

Two Pathways

1. Conceptually grounded income thresholds

Select a small set of development indicators in addition to income, establish a conceptual basis for group boundaries, and map the results back to thresholds for GNI per capita or another income measure.

This preserves the simplicity of an income-based classification, but may still conceal important heterogeneity by expressing multidimensional differences in income terms.

2. Multidimensional development classification

Combine income and non-income indicators into a classification that is not reduced to a single income threshold. Candidate methods include:

• clustering analysis;
• a composite index with explicit thresholds;
• minimum or bottleneck requirements for individual indicators; and
• approaches like MPM-, SPI-, or other deprivation-counting approaches.

This pathway better reflects a Beyond GDP objective, but may be harder to explain, operationalize, and maintain with full country coverage.

Evaluation Criteria

All approaches will be assessed against:

• global country coverage;
• annual updating;
• temporal comparability;
• interpretability and operational usefulness;
• transparency of normative choices and weights;
• robustness to indicator and methodological changes; and
• treatment of missing and low-quality data.

Initial Evidence Base

The review will begin with the UN High-Level Expert Group on Beyond GDP's 31 indicators, the World Bank Group Corporate Scorecard, the Cost and Affordability of a Healthy Diet, and related frameworks such as the HDI, MPM, and SPI.

Original resources will be retained. Resources and papers will be converted to Markdown with Microsoft's markitdown package, with original-to-Markdown mappings and conversion metadata stored in JSON. Each paper will also receive a brief literature summary. The Compound GPID CR research workflow and evidence-provenance practices will guide this work.

Near-Term Outputs

1. A presentation for colleague discussion covering the problem, both pathways, candidate methods, and key trade-offs.
2. A machine-readable, provenance-preserving literature and resource base.
3. A prioritized research design, including an indicator shortlist and methods for empirical testing.