The criterion used by the UNDP for measuring development is different from the criterion used by the World Bank in the following ways.
- The UNDP compares the development of the countries on the basis of literacy rate, gross enrolment ratio and health status of their people. On the their hand, the World Bank compares the development of the countries on the basis of per capita income or average income.
- On the basis of the comparison done by the UNDP, the countries are ranked as first, second, third… whereas on the basis of the comparison done by the World Bank the countries are divided into three categories:
1. Rich or developed or high-income countries
2. Middle-income or developing countries
3. Poor or underdeveloped or low-income countries
The UNDP has a broader concept of development and the World Bank has a narrow concept of development.
Limitation: Limitation of this criterion is that average or per capita income is not the only factor important for development. This factor hides the other important factor—distribution of income, which also affects development. Higher average income, along with equitable distribution of income is considered favourable for development.
