Country Groups and Aggregates

Economic Inequality
The country classifications used by the Global Inequality Project divide the world into two major groups: the core economies of the Global North and the peripheral economies of the Global South. For the purpose of analysing trends in global income inequality and the structure of the world economy, we rely on the IMF’s categorization of countries as either “advanced economies” or “emerging and developing economies.” The map below shows the IMF’s categories. We have further divided the peripheral group into 7 world regions to permit more detailed analysis.

While the placement of some countries can always be debated, the IMF’s categories broadly reflect the structure of the global economy in the 21st century. While the “advanced economies” have disproportionate control over the institutions of global governance, most of the “emerging and developing economies” have been subjected to structural adjustment programs and now suffer from a constant outflow of economic value through unequal exchange and the global debt regime. The IMF’s categorization is also consistent with the structure of the world-economy from the 16th to 19th centuries, as described by the historian Immanuel Wallerstein.

It is worth noting that the IMF has added 17 countries to the “advanced” group since 1960. You can separate these countries from the rest of the core by toggling the graph (just press the button that says, ‘Show 1960 core’). Unless otherwise noted, the Global Inequality Project uses the IMF’s 2020 definition of core-periphery. However, we have used the 1960’s classification for some long run time series. In those cases, the ‘new core’ countries are allocated to the relevant geographical region.

 Environmental Inequality
For the analysis of global carbon inequality and environmental justice, we use a slightly different North-South classification, derived from a recent paper in the journal Nature Sustainability. This ‘Global North’ classification (pictured below) is similar to the IMF’s ‘advanced economy’ group, with the main difference that it includes several major Eastern European countries.

This typology is similar to the “Brandt line” - an imaginary line separating the North from the South, which was proposed in 1980 by an independent commission chaired by Willy Brandt. The Brandt line was developed at the height of the Cold War, when Eastern European countries were using socialist industrial policy to rapidly build up their productive capacity and challenge their peripheral position in the world-economy. Commentators tended to understand the Eastern European socialist countries as a “Second World” that stood somewhere between the rich “First World” and the poor “Third World.” Since the collapse of the USSR, the ‘3 worlds’ framework has become less common and the Brandt line has become less useful in explaining international economic inequalities (for instance, see Ferabolli’s 2021 “updated post-Cold War Brandt line,” which places Russia in the South).

Nevertheless, given the resource-intensive industrial economies built in Eastern Europe during the 20th century, the Brandt line remains relevant for explaining global environmental inequalities. Something like the Brandt line distinction can still be seen in the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCC divides the world into ‘Annex 1’ countries who bear disproportionate responsibility for climate change (including both the “developed economies” of the West and the “transitional economies” of Russia and Eastern Europe) and the ‘non-Annex countries’ of the Global South. We follow this convention by using similar North-South categories to analyse responsibility for climate breakdown and climate reparations.