Final answer:
The World Bank uses per capita gross national income to categorize countries into four stages of economic development. This system aids in understanding and addressing the economic and developmental disparities between nations. The classification complements Wallerstein's world systems approach and supports global development goals.
Step-by-step explanation:
The World Bank classifies countries into four categories of development using per capita gross national income as a base. These categories help differentiate the economic status of nations across the globe, ranging from low-income countries that may struggle with basic human necessities to high-income countries that focus on new technology and have high standards of living.
This classification system aligns with Wallerstein's world systems approach, where countries are segmented into core, periphery, and semi-periphery, based on their economic dominance and labor types. The World Bank's classification is crucial as it informs their goals, such as the twin goals of accelerating economic growth and reducing poverty proclaimed by World Bank President Robert McNamara in the 1970s.
The World Bank also tracks demographics and environmental health indicators like the Human Development Index, life expectancy, literacy rates, and infant mortality to provide insight into a nation's development level and standard of living. This information aids policymakers in informed borrowing decisions and supports global initiatives like the Millennium Development Goals and the Sustainable Development Goals focused on development and poverty alleviation.