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 The Definition of Developing Countries under GATT
and other International Law
By Guglielmo Verdirame*

Introduction

While the gap between developed countries and the majority of the so-called de-
veloping countries is widening, the political will to tackle the problem of develop-
ment seems to be declining. This lack of political will is buttressed by more
frequently recurring reactionary arguments that point to developing countries as ex-
clusively responsible for their plight and that even advocate a form of guardianship
of developing countries to be exercised by the developed and self-righteous world.'i
The diminution in Official Development Assistance (ODA), the burden of debt
repayments, the concentration of aid on certain areas of the world and the fact that
aid is not often used to tackle priorities of human development are all factors that
contribute to worsening the plight of a large number of poor countries.2
In this context, a review of the legal mechanisms that constitute the international
law of development is necessary if an improvement in the fairness of the current

* The Author thanks Micbael Anderson for commenting on earlier drafts of this Article.
Special thanks also to Paolo Galizzi and Rupert Ticehurst.
' Claude Wauthier, Africa inquieta. Dure prove per le neodemocrazie, Le Monde Diploma-
tique (Italian edition, 11Manifesto), September 1996. During the negotiations for the renewal
of the Lome Convention in 1995, the United Kingdom argued that European aid to the par-
ticipating countries of the ACP (Africa, Caribbean, Pacific) should be decreased, while Ger-
many supported maintaining the same level of aid, despite the fact that European Union
membership had increased from 12 to 15. A. M.Mouradian, Offensiva contro la convenzione
di Lomb, Le Monde Diplomatique (Italian edition, 11Manifesto), April 1995.
2In 1994, developed countries disbursed 0.3 % of GNP as ODA as opposed to 0.34 % dis-
bursed in 1983/1984. UNDP, Human Development Report 1996, 1996, 199. In 1992 develop-
ing countries paid $160 billion in debt service charges, while the total amount of ODA
equalled only $60 billion. UNDP, Human Development Report 1994, 1994, 63. Furthermore,
certain countries tend to receive a disproportionate amount of aid compared to other, poorer
countries (the Arab States for example receive more ODA per capita than South Asian coun-
tries although the latter are far poorer) and aid is generally not focused on areas of human
priority, defined as "basic education, primary health care, rural water supplies, nutrition pro-
grammes and family planning services." Id., 72 - 73, particularly figure 4.7.
 Definition ofDeveloping Countries under GA TTandInternationalLaw

system is to be sought. The large number of treaties, declarations and conferences

that deal with development generally remain silent on the issue of the definition of
'developing country' and thus fail to provide clear criteria for the identification of
the beneficiaries of the measure or program they create.
This Article explores the ways in which developing countries are identified in the
practice of the General Agreement on Tariffs and Trade (the GATT) and other
international organizations. As for the GATT, its importance lies in its being the
instrument that provides the main legal framework for international trade. The
position of developing countries within the GATT is obviously crucial in favoring
or worsening the prospects for economic development. The practice of the United
Nations and the International Development Association (IDA), an affiliate of the
World Bank, will also be examined.' Although the main focus of this Article is on
multilateral practice, bilateral practice in allocating aid will also be referred to.
In the first section of this Article, some of the conceptual issues underlying the
question of the identification of developing countries will be examined. First, an
analysis of the theory of the duality of norms will be undertaken, dwelling on the
validity of the dichotomy of developed versus developing countries. Second, the Ar-
tide will assess whether the creation of two, or more, categories of countries on the
basis of their level of development is consistent with the principle of equality of all
States in international law.
The Article will then analyze the method of identifying developing countries un-
der the GATT, and compare it with the practice adopted in the application of other
international instruments. Although the main focus of the Article is the GATT, ref-
erence will also be made to the practice of other organizations - particularly those
that have also developed criteria for the identification of developing countries - as
well as to other models of identification currently in use, such as identification
through official lists and identification through self-election.
The conclusion will consider whether it would be advantageous to adopt general-
ly agreed to and differentiated categories of developing countries within the GATT
and other instruments. It will be argued that the adoption of such categories and the
use of legally binding criteria for the identification of developing countries can im-
prove the fairness of the current system by limiting the impact of foreign policy and

' These two organizations have a great impact on developing countries. Throughout the
1980s two-thirds of the total net disbursement of concessional flows to developing countries
by multilateral agencies came from the United Nations and the IDA. Within multilateral
agencies, a considerable role in development aid is performed by the regional organizations
(Arab Development Bank, African Development Fund etc.). In addition to multilateral aid,
bilateral aid is obviously very important. Private aid (through NGOs) and private invest-
ments also constitute another increasingly important source of financial transfers from the
richest to the poorest countries. UNDP Report 1994 (note 2), 61 et seq.
 Guglielmo Verdirame

national security interests of developed countries on the process of according prefe-

rential treatment and allocating aid.

I. Conceptual Issues

The francophone legal literature has devoted more attention to the problem of
the distinction between developed and developing countries.4 In the anglophone
literature, few authors have tackled this complicated issue.' The approach and the
ideas developed by the French authors provide the only existing theoretical frame-
work for discussing the issues related to the identification of developing countries in
international law.
A key concept for understanding the background to the problem of the legal defi-
nition of developing countries is that of the duality of norms operating in the sphere
of international economic law. This concept, developed mainly in the French litera-
ture, is widely referred to by most authors,' and underpins the practice of the
GATT. According to the theory of dual legal norms, two separate sets of rules exist
in the ambit of international economic law. The first set finds application in regula-
ting the economic relationships among developed countries; the second operates
with respect to the relationship between developed and developing countries.

' The main authors that have dealt with this problem are Guy de Lacharribre,Aspects r6-
cents du classement d'un pays comme momis developp6, Annuaire francais de droit interna-
tional (AFDI), 1967, 703 and Identification et statut des pays moins developpes, AFDI, 1971,
461; Guy Feuer, Les differentes categories de pays en d~veloppement, Journal du droit interna-
tional, 1982, 1; Maurice Flory, Droit international du developpement, 1977. Most French
books on the international law of development tend to discuss or at least acknowledge the
existence of a problem of defining developing countries. See, e.g., Jacques Bouveresse, Droit et
politiques du d~veloppement et de la cooperation, 1990, 83 et seq.; Ernst-UlrichPetersmann,
Die Dritte Welt und das Wirtschaftsv6lkerrecht, Zeitschrift fdr Auslindisches bffentliches
Recht und V61kerrecht, 1976, 492, 535 et seq. Comparative analyses of French and English
authors in the area of international law of development are quite rare, despite the great poten-
tial for a fruitful dialogue. One of the few works that analyzes the findings of scholars from
these two different traditions is FrancisSnyder/PeterSlinn (eds.), International Law of Devel-
opment, 1987.
s See mainly Milan Bulajic, Principles of International Development Law, 1993, especially
48 et seq.; F. V Garcia-Amador, The Emerging International Law of Development, 1990, 59;
Wil D. Verwey, The Principle of Preferential Treatment for Developing Countries, Indian
Journal of International Law, 1983, 343, 359 et seq.; A. A. Faturos,Developing States, in: Ru-
dolfBernhardt (ed.), Encyclopedia of Public International Law, vol. IX, 1986, 70.
6 See Bouveresse (note 4), 80 et seq.; Feuer (note 4), 5 et seq. For a critical assessment of this
theory in English see Bulajic (note 5), 48 et seq. Also Garcia-Amador (note 5) and Faturos (note
5) discuss this concept. See also PeterSlinn, Implementation of International Obligations to-
wards Developing States: Equality or Preferential Treatment?, in: W E. Butler (ed.), Control
over Compliance in International Law, 1991, 165.
 Definition of Developing Countries under GA TT and InternationalLaw

The rationale for the existence of the dual legal system lies in the varying stages
of economic and social development experienced by different countries. Given the
social and economic inequality among nations, "only unequal treatment can ensure
equal opportunities to subjects that are equal in law, but unequal in fact." 7 Develop-
ing countries - so the argument runs - should be accorded preferential treatment
in trade relations with developed countries, as well as other measures such as finan-
cial and technological aid, to compensate for existing inequality and to achieve a
more balanced world order.
The main shortcoming of the theory of dual legal norms is that it oversimplifies
complex economic and social differences into the rigid dichotomy of developing ver-
sus developed countries, which is far from providing a fair representation of reality.8
Placing countries such as Bhutan, Mali or Chad in the same category as Malaysia, Is-
rael or Chile is grossly inappropriate. Indeed, while the former are characterized by
GDP per capita of less than $600 and a Human Development Index (HDI)' among
the lowest in the world, the economic and social indicators in the latter represent a
situation that is closer in many respects to Western countries."0
However, this argument against the theory of duality of norms does not imply
that the underlying justification for that theory is to be rejected. On the contrary,
the rationale of that theory demands a more complex approach: its premise is that
pure juridical equality is a sterile legal fiction in the field of economic relations, in
which large differences separate States and create 'inequality in fact'. If this assump-
tion is valid, then the social and economic differences separating various countries
must be considered in all their complexity.

Bouveresse (note 4), 80.

See also Ennio Triggiani, Some Thoughts on the Most-Favoured-Nation Treatment,
Italian Yearbook of International Law, 1985, 124, 134: "There is undeniably a requirement to
overcome the simplistic binary division into developed and developing countries .. "
9The HDI is a composite index meant to gauge the level of development of a country on
the basis of social as well as economic criteria. The components of the HDI are life expect-
ancy, educational attainment, standard of living (measured in terms of real purchasing power).
The HDI reflects the evolution in the conception of development that has occurred in the last
two decades. On the HDI see UNDP Report 1994 (note 2), 90 et seq.; UNDP Report 1996
(note 2), 106 et seq. On the theoretical foundations of the HDI see A martya Sen, Commodities
and Capabilities, 1985 and The Standard of Living, 1987. For more information about the
HDI see UNDP Report 1996 (note 2), 90 et seq.
'0Indeed, Israel's GNP per capita was $13,460 in 1992, higher than the average GNP per
capita in the member States of the European Community ($12,536) in the same year. Malaysia
and Chile had GNP per capita that was close to that of Western European countries such as
Greece and higher than most Eastern European countries. In terms of human development,
all three of these countries were not far from European countries, and Israel ranked 19th in
the world, higher than Italy or Spain. UNDP Report 1994 (note 2), 129, table 1.
 Guglielmo Verdirame

The practice of some international organizations has acknowledged the existence

of a multiplicity of levels of development. A more complex approach has thus been
adopted allowing for the creation of more than just two categories of development.
For example the United Nations has established three categories - least developed
countries, developing countries and developed countries - in an effort to represent
the various stages of development." If various, and not simply two, categories of
countries may be defined - and to some extent are already defined - as a reflection
of different levels of development, then a large range of possible interactions among
these categories can occur. There will not be just a duality of norms, but a multiplic-
ity of sets of rules.'
The creation of different categories of countries on the basis of their level of de-
velopment may raise a problem of consistency with the principle of equality of all
States. 3 This principle, enshrined in Article 2(1) of the United Nations Charter, 4
represents, together with the principle of sovereignty, "the basic constitutional doc-
trine of the law of nations, which governs a community consisting primarily of
states having a uniform legal personality. " "
The idea that there is some tension between the two is based on the assumption
that the principle of equality also encompasses the concept of equality in law, mean-
ing that all States are bearers of the same rights and obligations. 6 Creating different

" In the practice of the General Assembly other subgroups of developing countries have
been established with regard to their special needs. These subgroups include island developing
countries, land-locked countries and the most seriously affected countries. Verwey (note 5),
365 et seq.
2For example, if a tripartite categorization into developed countries (A), developing coun-
tries (B) and least developed countries (C) is accepted, there will be one set of rules operating
inthe relations between As and Bs, the second set will discipline relations between Bs and Cs
and the third will apply to interactions between As and Cs. There may be at least three sets
of norms excluding interactions occurring between countries in the same category.
" On this principle see interalia:R. P.Anand, Sovereign Equality of States in International
Law, 197 Hague Recueil des Cours 9, vol. II, 1986; Jean-PierreCot/Alain Pellete (eds.), La
Charte des Nations Unies, 1991; Bruno Simma (ed.), The Charter of the United Nations: A
Commentary, 1994; Colin Warbrick, The Principle of Sovereign Equality, in: Vaughan Lowe/
Colin Warbrick (eds.), The United Nations and the Principles of International Law, 1994, 204.
The principle of equality of all States is obviously different from the principle of equality and
of non-discrimination with respect to individuals. See Warwick McKean, Equality and Non-
Discrimination under International Law, 1983.
""The Organisation and its Members, in pursuit of the purposes stated in Article 1, shall
act in accordance with the following principles. 1. The Organisation is based on the principle
of the sovereign equality of all its Members .... Article 2 adopts the synthetic expression
'equal sovereignty', to which two principles correspond, namely equality and sovereignty.
15 Ian Brownlie, Principles of Public International
Law, 1990, 287.
16This seems to be the position that Pierre-MarieDupuy accepts:
 Definition ofDeveloping Countries under GA TTand InternationalLaw

categories of countries with the consequence of according different rights and obliga-
tions thus constitutes an infringement of the principle of the equality of all States."
To establish whether the creation of different categories of countries in interna-
tional economic relations contravenes the principle of equality, it is necessary to
determine the scope and legal content of that principle."8 It is questionable whether

C'est le principe de 1'egalit6 souveraine des Etats qui est l'origine de l'obligation pour
chacun d'entre eux de respecter les droits des tiers. Elle signifie que tous se trouvent
places devant le droit dans une situation identique. Celui-ci leur reconnalt 1 priori les
memes aptitudes l6gales, les mimes droits et les mimes obligations.
PierreMarie Dupuy, Droit international public, 1993, 73. It is also the position advocated by
Kiba Mbaye.
Quand les droits sont in~gaux, c'est parce que la loi est encore in~gale et qui il n'est pas
possible de parler d'une vrai regne de 1e'galite, meme si c'est le regne de la legalite. Dans
une r~gime de lois injustes ou meme sc6lrates, l'galit6 devant la loi, c'est a dire l'appli-
cation de la loi a tous sans discrimination, a fatalement des consequences d'inegalite.
... Le constat de la flagrant inegalit6 de fait entre les Etats a fait naltre une idee nou-
velle, destin~e a donner au principe d'hgalite souveraine un contenu dynamique.
Kiba Mbaye, Article 2: Paragraph 1, in: Cote/Pellete (note 13), 79, 91. This author, however,
does not seem to avoid the simplifying dichotomy of developing versus developed countries
when he argues:
11 apparalt que la soci&6 internationale comprend des puissants et des faibles: les pays
industrialis6s, d'une part, et les pays en dveloppement d'autre part. Dans une telle socie-
te, inegalitaire de fait, le droit internationale doit venire au secours des Etats qu'une li-
berte totale de chaque 6l6ment bas6e sur le principe d'galit6 livrerait fatalement au une
triste sort.
Id, 92. But see, e.g., Randelzhofer, General Introduction to Article 2, in: Simma (note 13), 72,
74: equality "does not, however, signify equality in law, whereby all states are to the same ex-
tent subject to rights and obligations."
" An infringement of a general principle of law can also be justified as a derogation from
that principle, provided that such derogation is permitted under certain circumstances. In-
deed, the right of veto accorded to the Five Great Powers is an example of derogation from
the principle of equality of all States. The "pragmatic reasons" (AlbertBleckmann, Article 2(1),
in: Simma (note 13), 77, 89) invoked to justify that derogation could also be utilized to justify
a derogation from the same principle aimed at creating a more truly equal international com-
munity.
" The travauxpriparatoiresand the later pronouncements of the General Assembly do not
significantly contribute to clarifying the content of the principle of equality. With respect to
the travauxpriparatoires,one of the preparatory meetings held at the San Francisco Confer-
ence (Report of the Rapporteur of Committee 1 to Commission 1, UNCIO Doc. 944, 1/1/34,
10 et seq. (1946)) dealing with the text of Article 2 tried to elucidate the meaning of the expres-
sion 'sovereign equality' in these terms:
the terminology sovereign equality ... includes the following elements: 1) states are ju-
ridically equal; 2) each state enjoys the right inherent in full sovereignty; 3) the personal-
ity of the state is respected, as well as its territorial integrity and political independence;
4) the state should, under international order, comply faithfully with its international
duties and obligations.
 Guglielmo Verdirame

the principle of the equality of all States signifies anything more than equality before
the law, or juridical equality, and whether there is a conflict between that principle
and according preferential treatment, i.e. 'more rights', to certain countries identi-
fied on the basis of their level of development. Indeed, the principle of equality
means primarily "equality before the law, that is every state enjoys the same legal per-
sonality, regardless of differences in terms of geographical size, population, military
power, economic strength and so on."19
The view that the scope and content of the principle of equality is limited to ju-
ridical equality is confirmed in the approach adopted by international courts. In
Venezuelan Arbitration before the Hague Tribunal 1903,20 the Permanent Court of
Arbitration decided that the "principle of equality cannot be stretched to the extent
of meaning that all nations are to have equal rights in all circumstances"21 and that

Kelsen is critical of this statement:

Juridical equality means equality before the law, and that means that everybody has the
duties and rights which the law confers upon him, or that everybody shall be treated as
the law provides; which is an empty tautology. The second point of the interpretation
given by Committee 1/1 is meaningless as long as the term sovereignty is not defined.
Point 3 does not result from Article 2, paragraph 1, but from Article 3, paragraph 4.
Point 4 has nothing to do with the sovereign equality of the Members. It formulates the
truism that legal obligations shall be complied with.
Hans Kelsen, The Law of the United Nations, 1950, 52, note 4. Kelsen's arguments could also
apply to the Declaration on Friendly Relations and Cooperation among States (GA Res. 2625
(XXV) of 24 October 1970), which attempts to clarify the content of 'sovereign equality', but
basically adopts a list of elements very similar to the one of the travauxpriparatoires.Gaetano
Arangio-Ruiz, The UN Declaration on Friendly Relations and Cooperation among States,
1979, 144 emphasizes the "tautological and repetitive nature" of this part of the General As-
sembly resolution.
" Warbrick (note 13), 208 - 209 criticizes this principle with an argument similar to the one
adopted by Kelsen (note 18). He argues that the principle of equality before the law is "a trite
proposition" signifying simply that "states are equally entitled to enjoy their rights and
obliged to conform to their duties" and that such a statement is devoid of any practical impor-
tance due to the infrequency of international litigation. However, he acknowledges that the
principle of formal equality when applied to the status of States within international organiza-
tions bears greater significance as well as practical consequences.
20 The Venezuelan PreferentialCase, in: Scott (ed.), The Hague Court Reports, 1916, 55. See
also Anand (note 13), 109 - 112. The dispute concerned the claims held by nationals of various
countries in Venezuela. After failing to reach a settlement, Great Britain, Italy and Germany
resorted to coercive measures including blockading the Venezuelan ports. Once Venezuela
agreed to satisfy those claims, the blockading powers demanded that the claims of their
citizens be accorded preferential treatment with respect to the claims held by nationals of
other countries. Venezuela and the non-blockading countries rejected this demand, arguing
that it entailed a violation of the principle of equality of all States. The Permanent Court of
Arbitration decided in favor of Great Britain, Germany and Italy.
21This is a statement submitted by the British government summarizing its arguments to
 Definition ofDeveloping Countries under GA TTand InternationalLaw

as a consequence the preferential treatment that some countries had been accorded
should not be regarded as a violation of that principle.
The International Court of Justice has rejected the view that the principle of
equality requires that developed countries discriminate positively in favor of devel-
oping countries to compensate for inequality in fact.22 In the Libya-Malta Continen-
tal Shelf case,23 the Court rejected the argument that the different economic posi-
tions of the States concerned were to be taken into account in delimiting the conti-
nental shelf.24 If the principle of equality entailed a positive obligation incumbent on
all States, and in particular on developed countries, to strive for equality in fact,
then the ICJ should have concluded that Malta, the less developed party in that
controversy, was entitled to a decision taking its economic conditions into account.
The interaction between the principle of the equality of all States and the crea-
tion of different categories of countries can thus be summarized in the following

which the Court subscribed. The other position, which was rejected by the Court, is epito-
mized by the statement submitted on behalf of the government of the United States. "While
each State is sovereign within its domain, elsewhere ... all States are equal, having equal
rights and duties of respect, of representation and of justice." See Anand (note 13), 110.
22 The conceptual reasoning behind the idea of positive discrimination rests on a more
generous interpretation of the principle of equality. It is argued that, reality being character-
ized by inequality, equality is a legal fiction. This legal fiction is not, however, devoid of con-
sequence. One of the effects that the legal existence of the principle of equality produces is
that all subjects to which that principle applies (individuals at the domestic level and States in
international law) are obliged to pursue equality. The stronger or richer ones are thus obliged
to discriminate positively in favor of the poorer or weaker ones. See note 25. On the use of
legal fictions especially in the area of fundamental rights and principles see Jack Donnelly, The
Concept of Human Rights, 1985; RonaldDworkin, Taking Rights Seriously, 1978; Rolando
Gaete, Human Rights and the Limits of Critical Reason, 1993, 27 et seq.
' ContinentalShelf(Libya vs. Malta), 1985 ICJ 13 et seq. See also ContinentalShelf (Tunisia
vs. Libya), 1982 ICJ 18.
24 ContinentalShelf (Libya vs. Malta) (note 23), 41:
It was argued by Malta, on the other hand, that the considerations that may be taken
account of include economic factors and security. Malta has contended that the relevant
equitable considerations, employed not to dictate a delimitation but to contribute to the
assessment of a delimitation otherwise arrived a-, include the absence of energy resources
on the island of Malta, its requirements as an island developing country, and the range
of its established fishing activity. The Court does not however consider that a delimita-
tion should be influenced by the relative economic position of the two States in ques-
tion, in such a way that the area of continental shelf regarded as appertaining to the less
rich of the two States would be somewhat increased in order to compensate for its inferi-
ority in economic resources. Such considerations are totally unrelated to the underlying
intentions of the applicable rules of international law. It is clear that neither rules de-
termining the validity of legal entitlement to the continental shelf, nor those concerning
delimitations between neighbouring countries, leave room for any considerations of eco-
nomic development of the States in question.
 Guglielmo Verdirame

terms.2" The principle of equality does not require that certain countries be accorded
'more rights' than others in economic relations in order to foster their economic
development; however, if those rights are granted, and preferential treatment is ac-
corded, this practice is not to be regarded as a violation of or derogation from the
principle of equality.26

II. Models of Identification of Developing Countries

According to the broad classification adopted in most French literature," there

are three main methods for identifying developing countries. The first is through an
explicit legal definition. This is the method broadly adopted under the GATT, and
also followed by the United Nations for the identification of the Least Developed
Countries among developing countries (LDCs).
The second method is self-election. The countries that have an interest therein
claim developing country status for the application of a certain international instru-

25 It is certainly possible to predict an evolution of the principle of equality of all States

similar to the evolution of the concept of equality in many national legal systems in which
positive discrimination is derived from equality. See note 22. Using Dworkin's terminology,
(note 22), 134 - 137, the 'conception' of concepts such as fairness, equality, legality or cruelty
changes constantly as underlying social attitudes towards those principles evolve. The change
in the 'conception' of equality that has generally occurred at the domestic level could make
its way into international law. The latter is normally characterized by a higher degree of sta-
bility and reluctance to change than domestic law. On the principles and processes of legal
change in international law see Wolfgang Friedmann,The Changing Structure of International
Law, 1964, 117 et seq. See also Warbrick (note 13), 216 - 218; Stephen Zamora, Is there a Cus-
tomary International Economic Law?, German Yearbook of International Law, vol. 32,
1989, 9.
As far as the principle of equality and non-discrimination with respect to individuals under
international law is concerned, the matter is very different. The content of that principle has
evolved to a great extent and there is sufficient evidence to suggest that equality and non-dis-
crimination entail "the principle to treat equally what are equal and unequally what are un-
equal," South West Africa cases (Ethiopia vs. South Africa, Liberia vs. South Africa) (Second
Phase), 1966 ICJ 248, 306 (dissenting opinion of Judge Tanaka), and that "equality sometimes
requires States Parties to take affirmative action in order to diminish or eliminate conditions
which cause or help to perpetuate discrimination prohibited by the Covenant," General Com-
ment 18/37 on non-discrimination adopted by the United Nations Human Rights Committee
established under the International Covenant on Civil and Political Rights. See Brownlie (note
15), 598 - 601 (with further references); McKean (note 13), 258 - 285.
26 Warbrick (note 13), 216 argues that countries benefiting from positive discrimination
must accept limitations to their sovereignty. The relationship between aid conditionality and
the donor country's claim to supervise the implementation of the donation, and the principle
of sovereignty is certainly worthy of scholarly analysis.
2 Flory (note 4), 59 et seq.
 Definition ofDeveloping Countries under GA TT andInternationalLaw

ment or measure. This method is followed within the General System of Prefer-
ences (GSP), for which all country members of the Group of 77 identified them-
selves as developing. Other countries have also declared themselves developing and
thus have claimed to be entitled to benefit from that system (Romania, Israel, Bulga-
ria, Turkey, Greece, Spain, Malta). However, developed countries may refuse to
apply preferential treatment to specific countries that identify themselves as devel-
oping.
The third method is the creation of a list of countries considered developing for
the purposes of a particular norm or for the application of a specific international
instrument. It is the method used predominantly in the allocation of bilateral aid.
The European Community adopted this system for the identification of the benefi-
ciaries of its GSP scheme and more recently the United Nations Framework Con-
vention on Climate Change has used the same method.
Each of these methods encounters certain difficulties. Concerning the method of
identification through criteria, the main problem is to arrive at a set of criteria that
can simultaneously account for all the different aspects of development (social con-
ditions, economic development etc.). There is no consensus on what constitutes de-
velopment, but in establishing criteria such ideological consensus should be reached.
Furthermore, identification through a set of criteria should satisfy different and con-
trasting needs. It should be rigid enough to allow for fairly immediate and uncon-
troversial identifications; it should also have a certain degree of flexibility, because
in reality there is no clear-cut "threshold that separates wealth from poverty, and
poverty itself from extreme indigence."28
The method of identifying a developing country through a list also has some dis-
advantages. First, the inclusion of a country in a list can depend on factors not re-
lated to the actual level of development. Indeed, political factors (international ac-
ceptance of the country's political regime, friendliness of its relations with countries
that shape international development policies etc.) may play a decisive role." It is
thus no surprise that the method of the list is the one by far preferred in agreements
on bilateral aid. Second, a country that has been excluded from a list does not have
any legal means to challenge that decision. In the absence of clear criteria for identi-
fying developing countries, it is hardly possible to envisage how a country consid-
ered developing under a broad economic and social classification that is excluded
from the list of developing countries for the application of a particular preferential
measure can challenge that exclusion and legally assert entitlement to the specific
measure. However, this system has the advantage of high flexibility. Thus a country

De Lacharriire(note 4), 462.

29For example Israel, which ranks 19th or 24th in the world in terms of human develop-
ment (depending on whether the source is the UNDP Report for 1994 or 1996) receives one-
fifth of the ODA of the United States government. UNDP Report 1994 (note 2), 75.
 Guglielmo Verdirame

in which only some specific social or economic sectors are underdeveloped can be
considered developing for the application of a particular measure affecting that sec-
tor while being excluded from the list of developing countries for the purpose of
other measures.
The method of self-election is also problematic. As Bouveresse has observed, "the
mechanism of the self-election has paradoxically conferred a real freedom of choice
on the developed countries," 0 in that they have a wide margin of discretion and
may exclude certain self-elected developing countries from particular preferential
treatment.

Il.Identification through Explicit Definition: The GATT

The provisions regarding developing countries are concentrated in Article XVIII

and in Part IV of the GATT (Articles XXXVI - XXXVIII). These norms refer only
to two categories of contracting parties: developed and developing contracting par-
ties. However, more recently the tendency to override this dual system and to estab-
lish more than just two categories of developing countries has emerged.
Article XVIII as modified in 1955 allows developing countries to deviate from the
general GATT rules and to adopt a variety of measures to protect or promote their
fledgling industries. Part IV,introduced in 1965, sets forth a series of measures in
favor of developing countries that developed contracting parties must strive to im-
plement.3
As Hudec has observed, "the centrepiece of the developing countries' campaign
was the demand for the preferences ... this issue was pressed and decided largely
outside the GATT; the GATT legal situation was then confirmed by means of a
waiver."32 In 1971, a waiver to Article I, the Most Favoured Nation (MFN) clause,

30Bouveresse (note 4), 80.

31In spiteof its "legalistic language," Part IV contains "no definable legal obligations," and
at the time of its introduction "it added nothing to the existing legal relationship between
developed and developing countries." Robert Hudec, Developing Countries in the GATT
Legal System, 1987, 56. Part IV includes three articles. The first, Art. XXXVI, is just a procla-
mation of principles and objectives. It can probably be considered as a sort of preamble to
interpret the following provisions that should have more substance. Art. XXXVII lists the
commitments undertaken by developed countries. Its language is very cautious and the com-
mitments of developed countries are expressed in terms of "shall to the fullest extent pos-
sible," "make every effort to" or "give active consideration to" and 'have special regard to."
The last provision in Part IV, Art. XXXVIII, is on the joint action to be undertaken by con-
tracting parties for the pursuit of the objectives set forth in Art. XXXVI. Again the wording
is 'soft', requiring only that contracting parties "seek appropriate collaboration with the UN"
and so on.
2
Robert Hudec, The GATT Legal System and World Trade Diplomacy, 1990, 228.
 Definition ofDeveloping Countriesunder GA 7TT and InternationalLaw

was introduced to "permit developed contracting parties... to accord preferential

tariff treatment to products originating in developing countries and territories."33 A
similar aim was pursued by another waiver, introduced in the same year, that al-
lowed trade preferences among developing countries.34 The system of preferential
treatment for the products of developing countries in world trade was finally insti-
tutionalized in the Tokyo Round in 1979 with the adoption of the so-called 'en-
abling clause' (Decision on a Differential and More Favourable Treatment, Reci-
procity and Fuller Participation for Developing Countries)."
The 'enabling clause' by granting an autonomous standing to the principle of
non-reciprocity within the GATT legal system defacto reduces the scope of the Ar-
ticle I MFN clause enormously.3 6 However, that decision contains a significant limi-
tation, introduced under pressure from the United States.37 Paragraph 7 entails the
possibility of the 'graduation' of a developing country and, as a consequence, the
loss of the entitlement to non-reciprocal preferential treatment. 38 By means of para-
graph 7 it is restated that the rule within the GATT can only be the MFN clause
and that preferential treatment is a derogation from that rule valid only in excep-
tional circumstances and on a provisional basis.
Article XVIII of the GATT as revised in 1955 contains a very broad definition of
developing country, which provides the legal framework within which the GATT
regulations are to be applied. Article XVIII defines developing countries as those the
'economies of which can only support low standards of living and are in the early
stages of development."

" Basic Instruments and Selected Documents (BISD), Supp. 18, 24 - 25.
34
1d.
" BISD Supp. 26, 203 - 205
31See also Triggiani (note 8), 134: "The Principle of the duality of norms governing interna-
tional relations finds its most significant expression in the 'enabling clause'."
3 Hudec (note 32), 85 - 86.
38 BISD Supp. 26, 205. The last part of paragraph 7 reads:
Less-developed contracting parties expect that their capacity to make contributions or
negotiated concessions or take other mutually agreed action under the provisions and
procedures of the General Agreement would improve with the progressive development
of their economies and improvement in their trade situation and they would accordingly
expect to participate more fully in the framework of rights and obligations under the
General Agreement.
Both the United States and the European Community have resorted to this paragraph, de-
manding more reciprocity especially in those sectors in which developing countries have
achieved a level of development dose to that of the more advanced States. See Hudec (note 32),
86; Oswaldo de Rivero, The New Economic Order and International Development Law, 1980,
23 - 34.
 Guglielmo Verdirame

In Annex I to the agreement (Notes and Supplementary Provisions), some fur-

ther attempt is made to give that expression a more precise meaning. As for the first
element in the definition, "economies which can only support low standards of liv-
ing," it was added that what is relevant is "the normal position of that economy"
and that the determination should not be based "on exceptional circumstances such
as those which may result from the temporary existence of exceptionally favourable
conditions." Additionally, it was specified that "the phrase 'in the early stages of de-
velopment' is not meant to apply only to contracting parties which have just started
their economic development, but also to contracting parties the economies of which
are undergoing a process of industrialisation to correct an excessive dependence on
primary production."39 However, in spite of this attempt to throw some light on
the definition of Article XVIII, it remains too broad and vague.40 Indeed, the adden-
da in the annex simply state that certain readings of the definition must be avoided,
but they by no means contribute to the determination of which more specific cri-
teria should be adopted in determining whether a contracting party is developing or
developed.
The practice within the GATT confirms the inadequacy of the definition under
Article XVIII. In 1958, the Contracting Parties decided on an application brought
by Ceylon under Article XVIII.4 The government of Ceylon contended that due to
economic difficulties it was entitled to a release from some obligations under the
agreement. In granting the release, the Contracting Parties decided that Ceylon
could be considered a developing country for the purposes of Article XVIII, because
Ceylon's GNP per capita was "substantially below the figure of industrialised coun-
tries in Western Europe" and because, having taken "as a general indication the share
of manufacturing, mining and construction in the GNP,"42 its economy was "in the
early stages of development." The decision that Ceylon was a developing country
for the purposes of Article XVIII was thus based on the criteria most commonly re-

" Hudec (note 32), 86.

40 See also Verwey (note 5), 362: "It is a vague and abstract definition which certainly does
not deserve the name definition."
41 BISD Supp. 6, 112 et seq.
42
1d., 113.
 Definition ofDeveloping Countries under GA TTand InternationalLaw

ferred to for the identification of a developing country,43 but no substantive indica-

tion was derived from the wording of the GATT provision itself.
A number of disputes" have arisen in connection with Article XVIII(B), which
permits developing countries to adopt restrictions to safeguard balance of payments.
In these cases, developed countries contested the restrictions introduced by develop-
ing countries. The developing countries involved in the disputes have been India,
Korea and Brazil. The arguments of the developed countries against the adoption of
these measures rested on elements other than the developing country status, which
was implicitly recognized. Indeed, although under GATT practice "it is incumbent
upon the party invoking an exception to the General Agreement to demonstrate
that it is qualified for that exception,"4" in the cases at issue none of the parties in-
voking the application of Article XVIII(B) deemed their status as developing coun-
tries to be subject to demonstration. The United States, the contracting party that
brought the action against those developing countries, acquiesced in this practice.
Another important case for the determination of the criteria adopted in identify-
ing developing countries in the GATT is the Australian Waiver case of 1966.46 Aus-
tralia applied for a waiver of its obligations under the agreement to accord preferen-
tial treatment to products originating from developing countries by reducing duty
fees on them. The Australian request was based on Article XXV47 and on Part IV of

4 The early practice of the International Labour Organisation (ILO)is the first to adopt
similar criteria. In that case it was necessary to determine which countries had to be con-
sidered "of chief industrial importance" and thus eligible for sitting in the governing body of
that organization. The problem was whether India or Sweden was to be the eighth member
of the governing body. The final decision was in favor of India and was grounded on absolute
economic figures (GNP, total number of people working in the manufacturing sector). India,
having a much larger population than Sweden, obviously enjoyed better performance in abso-
lute terms, but if those data had been read against the background of demographic size (GNP
per capita,share of manufacturing in the total economy), the economic plight of India would
have been manifest. ILO Official Bulletins, April 1919 -August 1920, July -December 1920
and July -December 1921.
" The cases are Restrictionson Imports ofBeef (United States vs. Korea), 1988, BISD Supp.
36, 268 (the leading case); Import Restrictions on Almonds (United States vs. India), 1987,
GATT Doc. L/6197; Restrictions on Imports of CertainAgriculturaland ManufacturedProducts
(United States vs. Brazil), 1989, summarized in: Robert Hudec, Enforcing International Trade
Law, 1993, 584.
4 Restrictionson Imports ofBeef (note 44), 275.
BISD Supp. 14, 162 et seq. Some of the relevant documents on the Australian Waiver case
are not published in the BISD (GATT Doc. L/2443; GATT Doc. L/2464).
" Art. XXV:5 reads: "In exceptional circumstances not elsewhere provided for in this
agreement, the Contracting Parties may waive an obligation imposed upon a contracting par-
ty by this Agreement." It then goes on to require a qualified majority of two-thirds of the
votes cast, comprising more than half of the contracting parties.

12 GYIL 39
 Guglielmo Verdirame

the GATT. The Contracting Parties, albeit reluctantly, approved the Australian
scheme and allowed the waiver. The problem of the identification of the countries
that had to be the beneficiaries of the reduction of the Australian fees was not
solved by reference to the definition in Article XVIII, or to alternative criteria, but
simply by referring to an unofficial list of developing countries that, as with the
practice of other organizations, was the result of informal negotiations and compro-
mises among the States.4" The working party in that case "recognised that no official
list of less-developed countries had been drawn up for the purposes of the Agree-
ment" and declared itself not competent to settle the question. An annex to the
report containing a list of countries was stated to be some guidance to the govern-
ment of Australia. That list contained almost all countries other than the Organi-
zation for Economic Cooperation and Development (OECD) members and the
Soviet bloc countries.49
The number of complaints in which a violation of the provisions of Part IV is
alleged is very small."0 In 1979 Chile complained of a violation inter alia of Article
XXXVII by the decision of the European Community to restrict the importation
of apples from developing countries."' Article XXXVII provides that "developed
countries shall to the fullest extent possible refrain from introducing ... customs
duties or non-tariff import barriers on products currently or potentially of particu-
lar export interest to less developed contracting parties." The obligation deriving
from the cautious wording of this article can only be of a 'soft' type, as it were a
quasi-obligation. 2 The panel judging the case found under Article XXXVII that "it
could not determine that the EEC had not made serious efforts to avoid taking pro-

48
Abdulqawi Yusuf, Legal Aspects of Trade Preferences of Developing States, 1982, 63.
49 Indeed, Portugal, which was an OECD country, was excluded from that list, whereas
Spain, which at the time was not in the OECD, was included. The level of development be-
tween these two countries was not arguably very different and Spain probably was perform-
ing slightly better than Portugal.
50 See Hudec's 'Master List' of GATT cases. Hudec (note 32), 590 et seq. That list refers to
about ten cases in which an issue under Part IV was raised. However, the number of cases in
which a ruling on that provision was actually reached is smaller as some of those cases were
settled elsewhere or the decision on the other issues raised rendered a decision on Part IV un-
necessary.
" Restrictions on the Imports ofApples from Chile (European Community vs. Chile), BISD
Supp. 27, 98.
52 Hudec (note 32), 56.
 Definition ofDeveloping Countries under GA TTand InternationalLaw

tective measures against Chile."" In a subsequent case, 4 which also concerned re-
strictions adopted by the European Community on the importation of apples from
Chile, the panel found that the consultations with Chile were insufficient and that
a possible violation of Article XXXVII occurred. However, the issue under that
article was not taken further as other violations were found. Brazil had been pre-
viously involved in a dispute against the European Community,"5 in which an issue
under Part IV was also raised.
Although the Uruguay Round has not significantly altered the question of the
identification of developing countries within the GATT, 6 the tendency to create
differentiated categories of developing countries has emerged. Article 27.2.A of the
Agreement on Subsidies and Countervailing Measures57 exempts developing coun-
tries from the application of the general prohibition against "subsidies contingent,
in law or in fact, whether solely or as part of several other conditions, upon export
performance" introduced by Article 3.1.A. Annex 7 identifies the beneficiaries of
that exemption as the Least Developed Countries "designated as such by the UN
that are members of the WTO," and twenty other countries that will cease to
benefit from the exemption once GNP per capita has reached $1,000.8 Other devel-
oping countries not referred to in Annex VII will have to phase out their export

For a violation of Art. XXXVII to be found, the developing country should thus prove
that the developed country has not made all the efforts it could make under the circumstances
to avoid the imposition of a measure that damaged the trade of the developing country; this
is, obviously, very hard to prove. However, it seems that Art. XXXVII in spite of its cautious
wording allows for a more generous interpretation.
" Restrictionson Imports ofDessertApples (European Community vs. Chile), BISD Supp.
36, 93.
Refunds on Exports of Sugar (Brazil vs. European Community), BISD Supp. 27, 69.
6Guy Feuer,L' Uruguay Round, les pays en developpement et le droit international du de-
veloppement, AFDI, 1994, 758. Feuer predicts that the WTO will adopt an empirical method
of identification of developing countries similar to the practice of the GATT." ...on peut
imaginer que si 1' OMC, comme le GATT, apparalt avant tout comme une instance de n~go-
ciation, la designation des pays en d~veloppement se fera de mani~re empirique, sans recours
a des grilles et a des sch.mas pretablis." Id., 773.
17Agreement on Subsidies and Countervailing Measures, Final Act of the Uruguay Round,

Marrakesh, 15 April 1994.

5' These countries are Bolivia, Cameroon, Ivory Coast, Congo, Dominican Republic,

Egypt, Ghana, Guatemala, Guyana, India, Indonesia, Kenya, Morocco, Nicaragua, Nigeria,
Pakistan, Philippines, Senegal, Sri Lanka and Zimbabwe. It is also interesting that the 'gradua-
tion' of these countries is determined solely by the application of the per capita criterion. This
disdoses the existence of an inconsistency in the Agreement on Subsidies and Countervailing
Measures with respect to the identification of developing countries: LDCs are identified by
reference to the United Nations list, which is compiled on the basis of a multiplicity of social
and economic indicators (see Part IV section 1 of this Article); however, for some countries to
graduate, consideration is given exclusively to GNP per capita.
 Guglielmo Verdirame

subsidies within eight years, and will be subject to the general prohibition against
export subsidies from then onwards.5 9 In addition, Article 29 refers to "members in
the process of transformation from a centrally-planned into a market, free-enterprise
economy," which are subject to a 'softer' discipline than developed countries. The
Agreement on Subsidies and Countervailing Measures thus creates five categories of
countries: developed countries, which are subject to the general discipline of the
agreement, and four categories of countries subject to a differentiated discipline.'
Although in the rest of the Final Act of the Uruguay Round only the 'tradition-
al' three categories of developed, developing and least developed countries are re-
ferred to, and nothing is said about their identification, the Agreement on Subsidies
and Countervailing Measures has highlighted an important tendency that may pro-
gressively gain momentum within the GATT and other international instruments.
It is also significant that during the negotiations on this agreement the creation of
several categories of developing countries and the establishment of clearer methods
of identification were opposed by several countries. 1 Furthermore, the Agreement
on Subsidies and Countervailing Measures has accentuated another important ten-
dency with respect to the identification of developing countries and the consequent
according of preferential treatment: Article 27.5 obliges a developing country
"which has reached competitiveness in any given product to phase out its export
subsidies for such product over a period of two years."' 2 Hence a country that is

" However, "if a developing country member deems it necessary to apply such subsidies
beyond the eight year period" the Committee on Subsidies and Countervailing Measures,
established under the agreement (Art. 24), will determine whether "an extension of this
period is justified, after examining all the relevant economic, financial and development needs
of the member in question" (Art. 27.3).
60 To summarize, these categories are a) LDCs according to United Nations practice, to

which the prohibition never applies; b) twenty countries with GNP per capita less than
$1,000, to which the unlimited exemption from that prohibition ceases to apply once GNP
per capita exceeds $1,000 - Art. 27.2.B subsequently applies; c) all other developing countries,
to which the less beneficial differential treatment of Art. 27.2.B applies instead of Art. 27.2.A;
d) countries in the process of transformation from a centrally planned into a market, free en-
terprise economy.
6'"Concern was expressed about the approach taken to establish what could be perceived
as different categories of developing countries. It was pointed out that this concept would
have far-reaching political and economic implications in other international fora." Multi-
lateral Trade Negotiations, The Uruguay Round, Minutes of the Meeting of 6 November
1990, Note by the Secretariat, GATT Doc. MTN.GNG/NG10/24 (1990), quoted in: Patrick
J. McDonough, Subsidies and Countervailing Measures, in: Terence P. Stewart (ed.), The GATT
Uruguay Round: A Negotiating History, vol. 1: Commentary, 1993, 803, 924, note 652.
2
However, for developing countries listed in Annex VII a less strict discipline finds appli-
cation. They are required to phase out export subsidies on products for which they have
reached export competitiveness over a longer period (eight years).
 Definition of Developing Countries under GA TFandInternationalLaw

generally considered developing could be denied developing country status with re-
spect to a particular sector of its economy.63
It is difficult to draw conclusions regarding GATT practice on the identification
of developing countries. All that can be inferred from the case law is that if Chile,
Brazil, India and Korea have been treated as developing contracting parties all other
countries at a lower stage of development may claim developing country status
within the GATT on the basis of those precedents.64 The Australian Waiver case,
however, may provide room for more far-reaching conclusions. The list annexed to
the report of the panel, although expressly not endowed with any legal value, offers
some guidance. The exclusion from that list of OECD and Eastern European coun-
tries supports the claim that all other countries may be considered developing con-
tracting parties.6" However, the application of clearer criteria for the identification
and subcategorization of developing countries adopted in the Agreement on Export
Subsidies and Countervailing Measures, although obviously limited to that agree-
ment, may represent a departure from the previous approach towards developing
countries.

IV. Other Examples of Identification through Definition

The GATT does not offer the only example of identification of developing coun-
tries through a definition under international law. Indeed, other international in-
struments and organizations have developed explicit definitions of developing coun-
tries. In the practice of the United Nations, the LDCs are identified by means of the
explicit criteria proposed by the Committee for Development Planning (CDP) and
periodically endorsed by the General Assembly. The IDA has also adopted explicit
criteria for the identification of the beneficiaries of its programs, although the legal
status of those criteria seems weaker than in the case of the LDCs.

63 McDonough (note 61), 920.

Obviously this leaves unanswered the question of what development means for purposes
of the GATT. However, within the GATT the notion of development seems to be largely
coincident with economic development as the use of GNP per capita and share of manufactur-
ing criteria demonstrate.
6
' This conclusion may conflict with the extension of GSP treatment to Central and East-

ern European countries. One of the objections raised by other countries beneficiaries of that
treatment rested on the lack of GATT legal basis for the extension of the GSP to Central and
Eastern Europe. It was argued that preferential treatment cannot be extended to those coun-
tries as they are not developing countries. Report of the Committee on Trade and Develop-
ment, presented to and adopted by the Contracting Parties in 1992, BISD Supp. 39, 13 - 26.
 Guglielmo Verdirame

1. The Least Developed Countries

The notion of LDCs began to appear in United Nations documents in the 1960s.
In a series of resolutions" on development, the General Assembly affirmed the need
"to alleviate the problems of the least developed among developing countries" and
requested that a special investigation into the plight of the LDCs be carried out.
Subsequently, the General Assembly expressed the necessity of establishing certain
criteria through which the LDCs can be practically identified in order to adopt and
apply effective measures. The CDP was vested with the task of looking into the
problem of LDC identification and came up with a proposal for the following
session of the General Assembly. In the CDP's proposal three criteria were suggest-
ed for the identification of the LDCs: GNP per capita (not more than $100), the per-
centage share of manufacturing in total GNP (not more than 10 %) and the literacy
rate (not more than 20 % of the population older than 15). The CDP itself acknowl-
edged that these criteria are "neither wholly reliable, nor sufficient in themselves to
provide a complete picture."67 The General Assembly cautiously endorsed the cri-
teria proposed by the CDP while expressing some reservations."
The General Assembly also approved a list of 24 countries that met the require-
ments that had been established.' 9 This list has been constantly amended and has in-
creased from a figure of 24 countries to 41 as of the last adjournment, which took
place in December 1991.0 The list of LDCs should not be confused with other
66 GA Res. 2564 (XXIV) of 13 December 1969; GA Res. 2626 (XXV) of 19 November
1970.
67Report of the Committee for Development Planning, 7th session, Official Records of
the Economic and Social Council, UN Doc. E/4990, Supp. 7, para. 47 (22 March 1971 - 1
April 1971).
68See GA Res. 2768 (XXVI) of 18 November 1971:"... the criteria used so far for the iden-
tification of the hard core least developed among developing countries need to be reviewed
and refined."
" The initial list of LDCs approved by GA Res. 2768 included Afghanistan, Benin,
Bhutan, Botswana, Burkina Faso, Burundi, Chad, Ethiopia, Guinea, Haiti, Lao People's Dem-
ocratic Republic, Lesotho, Malawi, Maldives, Mali, Nepal, Niger, Rwanda, Samoa, Somalia,
Sudan, Uganda, Tanzania, Yemen.
0 The first expansion occurred in 1975. GA Res. 3487 (XXX) of 12 December 1975 added
four countries (Bangladesh, Central African Republic, Democratic Yemen and Gambia).
Other countries were subsequently added to the list: Cape Verde and Comoros (1977),
Guinea Bissau (1981), Djibouti, Equatorial Guinea, Sao Tome and Principe, Sierra Leone and
Togo (1982), Vanuatu (1985), Liberia (1990), Cambodia, Madagascar, Solomon Islands, Zaire
and Zambia (1991). The expansion of the list did not result from a revision in the criteria for
the identification of developing countries, but followed as more recent and complete social
and economic data on some countries became available.
In the report in which the first expansion in the list of LDCs was proposed, the CDP
observed that "according to the latest data available two or three countries already on the list
 Definition ofDeveloping Countries under GA TTand InternationalLaw

similar lists of developing countries adopted by other organizations or in bilateral

practice. Indeed, the list of LDCs has a merely declaratory value: the countries that
meet the above-mentioned criteria are entitled to join that list. The source of such
an entitlement is satisfaction of the requirements indicated in the definition of LDC
and endorsed by the General Assembly. In the case of identification through lists, as
a result of the absence of clear-cut legalized criteria a developing country not in-
cluded in the list cannot claim any entitlement to join the list and to receive the
legal benefits available thereby.
The entitlement of a country to be included in the list of LDCs is not justiciable.
No impartial organ can review the list proposed by the CDP and approved by the
General Assembly. 1 A country that wants to be included in the list of LDCs must
make its case known to the CDP and pressure for inclusion, which will then be pro-
posed to the General Assembly. It can be argued that persistent exclusion from the
list of LDCs of a country that satisfies the criteria constitutes a violation of the prin-
ciple of equality of all States. Indeed, the denial of an entitlement to a State that
meets the requirements to which that entitlement is made subject amounts to an un-
equal application of the law, and contravenes the principle of equality before the

should be removed." Yet the committee held the view that "an abrupt removal... would not
be desirable and therefore that no country at present included should be dropped from the list
during the remainder of the decade." In addition, the committee noted that the criteria for the
identification of the LDCs should be used "in a flexible and pragmatic manner." Report of the
Committee for Development Planning, 11th session, UN Doc. E/5761, paras. 129 - 131 (7 - 16
April 1975). The justification for the position taken by the CDP on this issue lies in the neces-
sity of giving stability to the emerging law of development. Indeed, implementation of the
measures in favor of the LDCs requires some time, and the introduction of frequent changes
in the legal framework of those measures would constitute a weakness. Furthermore, in spite
of a slight improvement in the social and economic indicators, the countries originally in-
cluded among the LDCs remain among the poorest in the world. The sudden removal of
benefits and preferential treatment could damage their economies considerably.
71
Advisory Opinion on the Legal ConsequencesforStates of the ContinuedPresenceof South
Africa in Namibia notwithstandingSecurity CouncilResolution 276 (1970), 1971 ICJ 16, 28: "...
the Court does not possess powers of judicial review or appeal in respect of the decisions
taken by the United Nations organs." The form of control over the acts of the organs of the
United Nations is essentially internal and political. Indeed, the ICJ's advisory jurisdiction
may be exercised only at the request of United Nations bodies. Art. 65 (1) of the Statute of
the Court provides that "the Court may give an advisory opinion on any legal question at the
request of whatever body may be authorised by or in accordance with the Charter of the UN
to make such a request." See also Art. 96 of the United Nations Charter. As Brownlie ob-
serves, "there is no automatic recourse which can settle disputes on points of interpretation
by members.... States in a minority may withdraw from the organisation, acquiesce in what
they regard as illegal operations ... or withhold financial contributions." Brownlie (note 15),
703. The last course of action is doomed to have little effect if undertaken by extremely poor
countries.
 Guglielmo Verdirame

law.72 An act of a United Nations organ contrary to a principle jus cogens,3 in the
case of the principle of equality enshrined in the United Nations Charter, is theoret-
ically void.74
Both the CDP and the General Assembly have expressed dissatisfaction with the
criteria set in the early 1970s. In 1991 the CDP decided to revise the early estab-
lished criteria and replace them with new criteria." The CDP defined the LDCs as
"those low-income countries that are suffering from long-term handicaps to growth,
in particular low levels of human resource development and/or severe structural
weaknesses."76 The GNP per capita criterion was maintained as a way of quantifying
the main element in the definition of an LDC, low income. Additionally, the Aug-
mented Physical Quality of Life Index (APQLI) and the Economic Diversification
Index (EDI) were introduced.77 Last but not least, the CDP decided that countries

72 See Part I.

'3 Bleckmann (note 17), 88 questions "whether and to what extent Art. 2(1) creates jus
cogens" obligations with the argument that
if one were to proceed, as some commentators do, in assuming that international law,
and in particular the principles of sovereignty and equality, are embedded in the Charter
itself, then the whole corpus of international law, or at least the legal rules directly
deriving from the principles of sovereign equality, would be shielded from any kind of
change.
See Brownlie (note 15), 701: "General international law provides criteria according to
which an organisation may be held to be unlawful in conception and objects, and, apart from
this, particular acts in the law may be void if they are contrary to a principle ofjus cogens."
However, lack of justiciability may destroy the effects of this voidness in principle. On this
point Brownlie observes that "the problems arising from the ultra vires acts of international
organisations are far from being resolved, and in any case are not susceptible to resolution by
means of simplified formulations." Id., 703.
' Report of the Committee for Development Planning, 27th session, UN Doc. E/1991/32,
paras. 215 - 259 (April 1991). The General Assembly endorsed the CDP's recommendation in
GA Res. 46/206 of 20 December 1991.
76Id., para. 232
' The APQLI comprises four different indicators: life expectancy at birth, per capita calo-
rie supply, combined primary and secondary school enrollment ratio and adult literacy rate.
The APQLI is meant to give a measurement of development in human resources, focusing
mainly on education and health. The EDI quantifies the structural weakness of a country's
economy. The EDI comprises the share of manufacturing in GDP, the share of employment
inthe industry, the per capitaconsumption of electricity and the export concentration ratio.
The new criteria put forward by the CDP and endorsed by the General Assembly
attribute more weight to the social element of development. Health and education are the
bases of the APQLI, and the economic indices in the EDI are considerably more elaborate
and comprehensive than the ones adopted earlier. Overall, the CDP has reflected the change
in perspective on the issue of development and has shifted its focus from a predominantly
economic, or 'commodity-centered', view of development to a more social and human
conception.
 Definition ofDeveloping Countries under GA 7Tand InternationalLaw

with a population larger than 75 million cannot be included in the list as the meas-
ures therefrom deriving are conceived mainly for the support of small economies. 8
As a result of the application of the new criteria, the CDP recommended the ad-
dition of six countries to the list of the LDCs 79 and the removal of one country,
Botswana. The General Assembly endorsed the proposal of the CDP, but for the
'graduation' of Botswana decided that it would be erased from the list after a transi-
tional period of three years. This transitional period of three years is to be applied
to every country that graduates. Botswana has thus become the first country to
graduate from the LDCs. °
If one gauges the list of LDCs against the data on human development presented
by the United Nations Development Programme (UNDP),8" discrepancies emerge.
First, some countries that are low HDI countries according to the UNDP reports
are not in the list of LDCs. Not considering India, Pakistan and Nigeria, which
exceed the population limit of 75 million,82 there are countries characterized by a
low level of UDI that are not yet considered LDCs. This is the case for Cameroon,
Ivory Coast, Kenya, Congo and Zimbabwe. 3 Moreover, Samoa, Cape Verde and
Maldives are placed in the group of countries at a medium level of HDI." Hence,
despite the fact that the new criteria take greater account of the social aspect of de-
velopment, they fail to do so to the same extent as the HDI does."5
According to the CDP, the main reason for the creation of the category of the
LDCs rests on the existence of specific needs in certain developing countries and, in
particular, on the fact that the measures usually adopted in favor of developing

78 This last criterion, however, is not applied to Bangladesh, which has a population of

over 75 million and yet is a LDC.

' The countries are Cambodia, Ghana, Madagascar, the Solomon Islands, Zaire and Zam-
bia.
'0Botswana's GNP percapita in 1991 was $2,580, while that of most other countries in the
list did not exceed $1,000. Additionally, Botswana performed better than other LDCs in the
educational and health sectors.
1
See note 9. These data are those contained in the U5NDP Human Development Reports
previously referred to. The categorization adopted in the UNDP reports (low, medium and
high HDI countries) does not bear any legal consequences. It is nonetheless important because
it reflects the most recent trends in development theory.
82For Bangladesh see note 78.
3UNDP Reports 1994 and 1996 (note 2). In the 1996 Report, which is based on 1993 data,
Congo and Zimbabwe were placed in the category of countries at a medium level of HDI, but
they are the poorest in that category.
84Botswana is also considered a country at medium HDI. However, Botswana officially
ceased to be considered an LDC in 1995.
85This is mainly due to the impact of the EDI on the method of identification of the
LDCs.
 Guglielmo Verdirame

countries may not be effective in some of them. 6 Indeed, the countries that should
fall into the category of LDCs are countries "that cannot benefit significantly from
trade measures geared to manufactured and semi-manufactured products, unless at
the same time measures to stimulate industrial production and diversification are
adopted.""7 In deciding which countries are LDCs and therefore eligible for the ben-
efits of this category, attention should be given mainly to the very limited capacity
of these countries to benefit from the largely trade-oriented measures for developing
countries for the simple reason that the LDCs do not produce much trade in the
first place. Therefore even if the definition of LDCs is not respondent to the new
theoretical approach to development, it still seems pertinent to the practical needs
for which this category was originally established.

2. The InternationalDevelopment Association88

In determining eligibility for its funds, the IDA adopts four criteria. First, "the
poverty of the beneficiary country, measured entirely by the GNP per capita"; sec-
ond, "the recipient's limited creditworthiness for borrowing from conventional
sources"; third, the recipient's economic performance, "including its ability to make

86
In 1990 the total net flow of external resources to the LDCs amounted to $17.2 billion,
most of which was DAC (Development Assistance Committee of the OECD) bilateral and
multilateral flows. On the basis of the Paris Programme of Action, the developed countries
should aim at contributing 0.15 % of GNP to assist the development of the LDCs. In 1991
only the Scandinavian countries, France and Portugal met the 0.15 % requirement. All the
other OECD countries, and potentially larger contributors, fell short of the 0.15 % target. In
particular, the United States ODA to the LDCs was as low as 0.03 % of GNP, one-fifth of the
target commonly agreed on at the Paris Conference. See DAC, Report on Development
Cooperation 1992, 1992, table 40; UNCTAD, Least Developed Countries: 1993 - 1994 Re-
port, UN Doc. TD/B/40(2)/11, 13 et seq.
87Report of the Committee for Development Planning, Official Records of the Economic
and Social Council, UN Doc. E/4990, 51st session, Supp. 7, para. 47.
"SThe IDA was established in 1960 as an affiliate of the World Bank. Art. 1 of its Articles
of Agreement states that "the purpose of the Association is to promote economic develop-
ment, increase productivity and thus raise standards of living in the less-developed areas of the
world included within the Association's membership." Between 1960 and 1993, the IDA is
reported to have allocated nearly $70 billion to the less developed countries. Alvin LeRoy Ben-
nett, International Organisation: Principles and Issues, 6th ed., 1995, 312. The International
Finance Corporation (IFC) is the other main institution affiliated with the World Bank group
dealing with development. However, its purpose is "to further economic development by
encouraging the growth of production private enterprise in member countries, particularly in
the less developed areas." Art. 1, Articles of Agreement of the IFC. The Articles of Agree-
ment of the World-Bank-affiliated institutions are reproduced in the appendices in Ibrahim
Shihata, The World Bank in a Changing World, 1991.
 Definition of Developing Countries under GA T and InternationalLaw

effective use of resources and the availability of suitable projects." 9 The fourth crite-
rion is determined by the size of the population.
The main criteria of these four appears to be GNP per capita. Indeed as early as
1964 the board of the IDA agreed to "a strong presumption against lending to coun-
tries with a per capita income above $250." As of 1980 the limit had been increased
to $730 and in 1995 it stood at $865. Most recipient countries meet this require-
ment, although exceptions are possible for those countries that exceed the limit only
after a project has begun. In 1982 recipients of IDA programs were divided into two
main categories according to the level of GNP per capita. At the bottom level were
countries with GNP per capita of $410 or less; at the higher level were countries
with GNP per capita between $411 and $730.'
The legal status of the IDA criteria is very different from that of the definition of
LDCs in the United Nations.9 First, the definition of the LDCs is incorporated 92
into resolutions of the General Assembly. Hence, that definition has undoubtedly
a 'soft-law' status and may arguably have an even stronger value.93 The criteria
adopted by the IDA are not incorporated into the statute of that organization or in-
to any act of its organs comparable to a resolution of the General Assembly, with
the exception of the 1964 recommendation of the board to abstain from lending to
countries with an income exceeding a certain limit. However, the recommendation
of the board does not create an entitlement - or strengthen an existing one - to
benefit from the lending programs of the IDA for countries below a certain level of
income. The board limited itself to creating a presumption of non-entitlement
against countries above that level.
The second important difference, ancillary to the first, exists with respect to the
position of the developing country vis-a-vis the organization. In the case of the

" World Bank, IDA in Retrospect: The First Two Decades of the IDA, 1982, 22; World
Bank, The World Bank Annual Reports.
90 IDA in Retrospect (note 89), 29, figure 3.2.
" Bouveresse does not analyze the IDA method of identification of developing countries as
an example of the explicit definition. He considers it the best example of the technique of
identification of the developing countries through the creation of a list. Bouveresse (note 4),
86. However, the IDA would probably claim that its lists are made as a result of the applica-
tion of the criteria described in the main text. The reason why the IDA method is discussed
here is the fact that the criteria seem to play some role - albeit narrower than in the case of
the LDCs - in the definition of the developing countries.
92The criteria are not strictly speaking incorporated in the sense that the text of the Gener-
al Assembly resolution contains them, but a dear reference ismade to them. See, e.g., GA Res.
45/206 of 20 December 1991: '[The General Assembly] notes with appreciation the new
criteria for identifying the least developed among developing countries"; "[The General As-
sembly] endorses the recommendations of the Committee for Development Planning."
" On the status of the General Assembly resolutions see Brownlie (note 15), 14, 699.
 Guglielmo Verdirame

LDCs, a country excluded from the list of LDCs can rely on a solid substantive
basis to support its inclusion if it meets the requirements. In the case of the IDA, as
a consequence of the more feeble legal status of the definition a country excluded
from the list of the beneficiaries of the IDA aid program finds itself in a weak
position vis-4-vis the organization. In addition, the existence of two other criteria
(economic performance and creditworthiness), the evaluation of which necessarily
occurs within wide margins of discretion, contributes to impairing the claim of the
excluded developing country.
The IDA method differs from the United Nations model for the identification of
the LDCs also with respect to the issue of the 'graduation' of a developing country.
While the General Assembly has adopted a flexible approach and has so far ap-
proved the graduation of just one country, the IDA has traditionally taken a more
rigid stance. Thus once a beneficiary country passes the maximum threshold of
GNP per capita it normally ceases to be a recipient of the programs in accordance
with the recommendations of the IDA board. 4 However, countries with GNP
above the maximum limit have recently been considered eligible for IDA funds be-
cause of geographically weak positions. Tonga, Vanuatu and Western Samoa have
thus been held eligible to receive IDA funds as they are small island economies."
The method followed by the IDA thus differs from that adopted by the United
Nations. Although the World Bank and its affiliated institutions are specialized
agencies of the United Nations, they have not considered themselves bound by the
resolutions of the General Assembly.96 This practice is supported by the terms of
the Relationship Agreement between the United Nations and these institutions
wherein it is explicitly stated that the World Bank "will carry out the decisions of
the Security Council," but is only required to give "due regard" to the resolutions of
the General Assembly.9" If the General Assembly resolutions were binding on the
acts of the IDA, then it could be argued that, as the IDA concentrates its action on

94Since 1961 many countries have thus graduated from the IDA list. Among them are
Chile, Colombia, Turkey, Egypt, Paraguay, Tunisia, Nicaragua.
95World Bank, Annual Report 1995, 206.
96
Sbibata (note 88), 99 et seq.; Douglas Williams, The Specialised Agencies and the UN: The
System in Crisis, 1987, 160 et seq.; Benedetto Conforti, Diritto Internazionale, 1992, 144. In the
1960s, the General Assembly tried to prevent the World Bank and the International
Monetary Fund (IMF) from assigning funds to Portugal and South Africa. However, in spite
of the claim of the General Assembly that its resolutions are binding with respect to the
activities of the World Bank and the IMF, neither institution complied with those resolutions;
they argued that they enjoy complete autonomy in matters related to the allocation of their
funds.
97
See Agreement between the United Nations and the International Bank for Reconstruc-
tion and Development, 15 November 1947, 16 UNTS 346; Agreement between the United
Nations and the International Development Association, 27 March 1961, 394 UNTS 222.
 Definition ofDeveloping Countriesunder GA TTand InternationalLaw

the poorest developing countries, it would have to follow the General Assembly
classification of LDCs in identifying recipients of its funds. 8

V. Other Methods of Identification of Developing Countries

in International Law

1. Identification through Self-Election

The method of self-election is theoretically followed in the implementation of the

GSP. The conclusions of the second United Nations Conference on Trade and
Development (UNCTAD) adopted in New Delhi on 12 October 19709' endorsed
the principle of the self-election of developing countries to identify the beneficiaries
of the GSP. All member countries of the Group of 77 declared themselves develop-
ing countries and claimed to be entitled to preferential treatment. However, as al-
ready observed, developed countries are under no obligation to recognize develop-
ing country status for a self-designated country. Each developed country may ab-
stain from extending preferential treatment to one or more countries of the Group
of 77 despite their collective self-election.
Membership in the Group of 77 is largely coincident with membership in groups
A and C of the UNCTAD. The latter are essentially geopolitical entities created to
facilitate the organizational work of the UNCTAD. Indeed, group A includes all
the African and Asian countries (with the exception of Turkey) and the countries of
the former Yugoslavia; group B comprises the Western countries, Cyprus, Japan,
Australia, New Zealand, Turkey and the Vatican State; the Latin American States
are members of group C; the countries of the ex-Soviet bloc belong to group D.
Cyprus and Malta are also members of the Group of 77, although they belong to
UNCTAD Group B, as is Romania, which is part of group D. China, Israel and
South Africa, all members of group A, are not in the Group of 77, while the PLO,
despite the current lack of statehood, is.
The exact criteria that regulate membership in the Group of 77 have never been
made explicit.'" When the Group of 77 was faced with the question of admitting

98 The list of countries eligible for IDA funding comprises a larger number of countries
than the list of LDCs, and all LDCs in the United Nations classification are included in the
IDA list. Therefore, the adoption of the United Nations method would result in a reduction
in the number of recipients of IDA funding.
" Proceedings of the United Nations Conference on Trade and Development, 2nd session,
vol. I, Report and Annexes (1970). See also: Report of the Special Committee on Preferences,
10th session, Supp. 6, UN Doc. TD/B/300, Chapter 1 (31 March 1970 - 17 April 1970).
,00 Marc Williams, The Group of 77: Anatomy of a Third World Coalition, Ph.D. thesis
(University of London), 1986, 210; K P. Sauvant, The Group of 77: Evolution, Structure,
 Guglielmo Verdirame

countries that did not belong to either group A or group C, the problem of mem-
bership and admission necessarily had to be considered. At the Third Ministerial
Meeting of the Group of 77 (February 1976 in Manila), in deciding that Romania
could be admitted to the Group of 77, it was stated that the decision to accept Ro-
mania was taken
in the light of the following criteria: 1) the countries in question should agree to partici-
pate in the work and positions of the Group of 77 in all forums and not only on specific
topics and aspects of international relations; 2) the fact of belonging to the 'B' or 'D' lists
would not constitute a problem provided that country in question did not aspire to elec-
tive offices; 3) the initiatives of developing countries members of the Group of 77 which
do not belong to any101of the three regional groups should be endorsed and channelled
through any of them.
However, those guidelines contain no reference to the level of economic and social
development or to ways of defining it. They seem to indicate rather what code of
behavior is required from a country that has already been admitted to the Group of
77 on the basis of other elements; they should be considered conditions that mem-
bers of the Group of 77 must abide by rather than criteria for the identification of
countries eligible for membership. The fact that no clear-cut criteria for the identifi-
cation of developing countries have been adopted by the Group of 77 demonstrates
the reluctance of the same developing countries to follow the method of explicit def-
inition.
From the practice of the main donor countries and institutions it seems that the
self-election of the country members of the Group of 77 is far from having obtained
great legal significance. Indeed, in determining which countries are to benefit from
its respective GSP, the United States has attempted to establish legal criteria and the
European Community has followed a country-by-country approach, but each has
failed to respect the self-election of developing countries. Section 502 of the United

Organisation, 1981, 14.

'o'K P. Sauvantl. W Miller, The Collected Documents of the Group of 77, vol. 111, 1993,
60. As for the procedure for the admission of new members, the working group set in Geneva
affirmed that membership remains in principle limited to countries in the geographical
regions of Africa, Asia, Latin America. To become a member, a country within those desig-
nated areas must apply through the regional group to which it would belong.
In exceptional circumstances the Group may consider the application of a developing
country which is located outside of the three geographical regions, provided that the
developing country concerned has shown over a sufficient period of time that it has an
identity of interests with the Group of 77 and has consistently supported the positions
of the Group in all fora.
Working Group on Procedures for Admission of New Members to the Group of 77, Geneva,
28 April 1976; in: id., 83. In this latter case, the decision on admission is taken by the Group
of 77 as a whole. Although the conclusions of this working group were never officially
endorsed, yet "the report can be taken as representing a broad view within the group of 77
since it was composed of representatives of all regional groups." Id., 23, note 53.
 Definition ofDeveloping Countries under GA 7Tand InternationalLaw

States Trade Act (1974) establishes that the United States administration in deciding
whether a country may benefit from the GSP or not should follow certain criteria,
the main criteria being the country's will to become a beneficiary of the scheme, the
level of economic development of the country, the behavior of other developed
countries with respect to that particular developing country, the guarantees offered
by the country to the United States that it will grant equitable and reasonable access
to its market and natural resources. There are thus several elements apart from that
of self-election - or willingness, as it were - of the country to be a GSP benefi-
ciary. The last condition in particular is a de facto reciprocity requirement. As
observed by Elkin, its presence appears hardly justifiable in a scheme of preferential
treatment resting on the idea of 'compensative inequality'." 2 The European Com-
munity has followed the method of the list in applying the GSP.0 3 Although there
are some significant differences between United States and European Community
practice, in neither case has self-designation of the member countries of the Group
of 77 been perceived as binding.
Self-election as a method for designating developing countries has achieved greater
practical importance with respect to measures and instruments of South-South co-
operation due to the greater influence of the Group of 77 on the creation of those
instruments. For example the Agreement on the Global System of Trade Prefer-
ences among Developing Countries"° is reserved "for the exclusive participation of
developing countries members of the Group of 77" (Article 3(a)).

12 Elkin, Droit et pratique des pref6rences generalisee, 1985, 171 - 172. The concept of
'compensative inequality' (inegaliticompensatrice)is a corollary to the principle of dual legal
norms discussed in Part I: equal treatment cannot be given to situations that are not equal.
103Annex C of EC Regulation 3154/78 of 29 December 1978, Official Journal Eur.
Comm., No. L 375, 1978 contains the list of countries eligible to participate in the GSP of the
European Community. Annex D lists the LDCs, beneficiaries of a privileged status within the
countries enjoying GSP status. It is interesting to note that the countries identified as LDCs
by the European Community are the same as the LDCs in United Nations practice. With
regard to Annex C, it contains a list of all countries except for Romania, Malta and the
People's Republic of Korea. Annex C includes also the countries of the ACP, which, how-
ever, under the Lome Convention benefit from a more advantageous system of trade prefer-
ences than the GSP. The European Community modified its GSP in the 1980s, deciding to
target mainly the LDCs. See Com (80) 104 final, Brussels, 1980 containing the guidelines for
the 1980s. For the GSP of the European Economic Community see Axel Borrmann, The Sig-
nificance of the EEC's GSP, 1985; Elkin (note 102), 174 et seq.; Verwey (note 5); Yusuf (note
48), 120- 127.
104 This Agreement was approved by the Ministerial Meeting of the Group of 77, which
took place in Brasilia 22 -23 May 1986. Sauvant/Miller(note 101), vol. XVII, 326.
 Guglielmo Verdirame

2. Identification through Lists

The list method is widely used by developed countries in identifying the benefici-
aries of bilateral ODA. It is also the method followed by the United Nations in de-
termining which countries should bear the financial burden of peace-keeping mis-
sions, and by some multilateral treaties.
The difference between identification through a list and identification through
explicit criteria may sometimes be quite marginal. Indeed, a list is usually created to
determine practically which countries are developing in light of certain criteria. As
has already been mentioned,"'5 the real difference between the two methods rests on
the assessment of the role played by the criteria in identifying developing countries.
In some cases, the criteria almost seem to follow the list: the beneficiary countries
are identified on the basis of mainly political factors, and the criteria are there to
provide a facade of non-arbitrariness. In other cases, such as the LDC classification,
the criteria appear to be more genuinely applied.
A variation of the list method is the 'negative list' of developed countries. Devel-
oping countries are thus identified a contrario.This is the practice of the United Na-
tions in financing peace-keeping operations. Since 1973 the financial burden of
peace-keeping operations has been distributed on the basis of a scheme that distin-
guishes between developed and developing countries. All the permanent members
of the Security Council and other countries specifically mentioned in the resolu-
tions of the United Nations are in the list of the obligated developed countries. All
countries not included are to be considered developing. i6
Recently the United Nations Framework Convention on Climate Change has
also adopted the method of the negative list. 7 Some obligations are imposed specifi-
cally on developed countries. Developed countries and other parties included in An-
nex I commit themselves to reducing greenhouse gas emissions. In addition, devel-
oped countries included in Annex II have the obligation to financially assist devel-
oping countries in the adoption of measures necessary to comply with the sub-
stantive requirements of the treaty. The difference between the two annexes is that

105See Part II.

106The resolution that defines this method is GA Res. 3101 (XXVI) of 11 December
1973.
107UN Framework Convention on Climate Change, 9 May 1992, 31 ILM 1992, 849. This
is only one among other conventions on environmental law to have adopted this distinction,
usually in order to impose an additional financial burden on developed contracting parties.
Other interesting conventions in this area are the 1987 Montreal Protocol on Substances that
Deplete the Ozone Layer, 16 September 1987, 26 ILM 1987, 154; Convention on Biological
Diversity, 5 June 1992, 31 ILM 1992, 822. All these instruments are collected in: Philippe
Sands/RichardTarasofsky/Mary Weiss (eds.), Documents in International Environmental Law,
1994.
 Definition ofDeveloping Countries under GA TTand InternationalLaw

the first includes the countries of the ex-Soviet bloc, while the second includes only
OECD countries and Turkey. 8
The wording of the treaty makes clear that Eastern European countries associated
with developed countries for the purpose of one set of specific obligations are put in
that category because of their capacity to pollute and not because of their level of
development. Indeed, Article 4 refers to "developed country Parties and other Par-
ties included in annex 1 ... ," implying that other parties are not to be considered
developed. Furthermore, the other set of specific obligations is imposed exclusively
on the countries designated as developed.
The financial obligations deriving from the treaty are thus incumbent solely on
OECD countries. This is substantially different from the earlier examined practice
of the General Assembly in the financing of peace-keeping operations wherein
Eastern European countries share the financial burden of peace-keeping operations
with Western countries." 9 However, that practice dates back to the early 1960s,
when the contrast between the two blocs was at its apex. The Western countries
would not have accepted paying for operations to which the Soviet bloc countries
were not required to contribute. The new international scenario allows an assess-
ment of the situation of Eastern European countries based on their economic condi-
tion rather than on political factors."0
The list method is the one predominantly adopted in bilateral practice."' It is the
type of aid in which political factors and relationships between countries play a
major role. Indeed, bilateral donors have proved less capable, or less willing, to di-
rect their aid to those areas more in need of intervention such as education, health
care, nutrition etc."' It is also the sphere in which the position of a developing coun-
try aspiring to receive bilateral aid is weaker. Indeed, bilateral aid is described by the
donors as the fulfillment of a moral obligation and ultimately as a decision related

"SAnnex II thus includes Australia, Austria, Belgium, Canada, Denmark, European Com-
munity, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Neth-
erlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United
Kingdom, United States. The inclusion of Turkey among the countries obliged to provide
financial assistance to developing countries is peculiar. Turkey is still in many respects con-
sidered a developing country and is a recipient of ODA. UNDP Report 1996 (note 2), 172.
See Petersmann (note 4), 544.
"1 See also the discussion in the GATT on the extension of GSP treatment to Eastern and
Central European countries referred to above.
.In 1987 the ODA of the OECD members amounted to $41.5 billion, over 80% of world
aid. DAC, Development Cooperation: 1988 Report, 1988, 11.
"' Only 7 % of the aid of private donors has been directed "to the priority areas of human
development," while the multilateral donors have performed better, directing around 16 % of
their aid to those areas. UNDP Report 1994 (note 2), 73. See also George Guess, The Politics of
U.S. Foreign Aid, 1987, 257 et seq.

13 GYIL 39
 Guglielmo Verdirame

to the use of national resources and thus pertaining to the absolute sovereignty of
the State. Obviously, if the principle that developed countries have a legally binding
obligation to transfer aid to developing countries should assert itself, the sovereignty
of developed States in the sphere of bilateral aid would be conspicuously eroded as
they would have to account for the fulfillment of an obligation. In that hypothetical
case, the definition of developing country as emerging from the practice of multilat-
eral agencies could be used to justify a claim vis-4-vis a developed country.
The allocation of bilateral aid can hardly be described as a fair process that takes
into account real differences in the level of development."' The United States for ex-
ample divides its ODA between strategic allies and poor nations: the former (Israel,
Egypt, Bolivia, El Salvador) receive a larger share of aid than the much poorer coun-
tries of the second group (Bangladesh, Madagascar, Tanzania, Mozambique)." 4 For
the above-mentioned reasons, countries that are excluded from the United States aid
program or that receive only a very small amount compared to other more devel-
oped recipients can do very little to change the situation from a legal point of view.

Conclusion

From the practice of the different organizations that have been examined some
common elements emerge. First, certain countries are always considered developed
and constitute the core of developed countries. All OECD countries are considered
developed in the practice of various organizations. The position of Central and East-
ern European countries is different. With the exception of Romania and the former
Yugoslavia, which were often considered developing countries even before the col-
lapse of the communist regimes, the other countries were put in the category of the
centrally planned economies and were usually associated with developed countries.
Nowadays, Western countries are less reluctant to accord preferential treatment to
their old adversaries and the aspiration of the ex-Soviet bloc to benefit from the GSP
is evidence of the new situation. However, it could hardly be argued that those
countries are developing countries for all purposes. Rather they seem to fall into the
penumbra between the two broad categories of developed and developing countries.
The practice of considering OECD countries developed and the rest of the world -
with the exception of the Central and Eastern European countries - developing has
some following in the GATT, although the tendency to create several subcategories
of developing countries subject to different obligations and to varying degrees of
preferential treatment is timidly emerging.

113UNDP Report 1994 (note 2), 73.

114Id See also id., 97, table 41. Also the Reports of the DAC contain useful indications and
statistics in this area. See note 86.
 Definition ofDeveloping Countriesunder GA TTandInternationalLaw

Second, there seems to be sufficient practice to support the legal existence of the
subcategory of LDCs. Initially created by the United Nations, this category has
been given recognition by the practice of other organizations (the GATT, the
European Community, the Group of 77), which normally refer to the list of LDCs
endorsed by the General Assembly on the basis of explicit criteria of identification.
The third common element is the 'graduation' of a developing country once it
has achieved a higher level of development. The 'enabling clause' under the GATT
entails the possibility of the graduation of a developing country once it has achieved
a sufficient level of development in the agricultural or industrial sectors that enjoy
preferential treatment. The United Nations has been very cautious in applying
graduation to the LDCs in the belief that the sudden removal of a country and the
consequent abrupt suspension of benefits may be harmful. Indeed, only one
country, Botswana, has 'graduated' from the list thus far. In the practice of the IDA,
however, graduation is quite frequent.
In spite of these common elements, the absence of a generally agreed to definition
of developing countries is a peculiar feature of international economic law. Verwey
refers to three main factors that may account for this phenomenon."' First, the con-
cept of developing country is vague. Second, within the same country very different
levels of development may often be found."6 Third, neither developed nor develop-
ing countries have ever really sponsored the adoption of a definition. The last factor
seems material. Indeed, the flexible system currently in use works to the advantage
of developed countries and also of some developing countries. The former can
allocate aid on the basis of national interest and foreign policy and thereby strength-
en their ability to influence the decision-making process in some countries. The
present system is also advantageous for the upper layer of developing countries, i.e.
those at a relatively high stage of economic and social development as they can re-
ceive large portions of aid and benefit from preferential treatment.
A system such as the present one relies heavily on unofficial lists, or criteria that
are often too vague or endowed with little legal value. As a result, the entitlement..7

Verwey (note 5), 348.

...
6
.. This is the argument used by the Committee for Development and Cooperation of the
European Parliament in commenting upon the General Guidelines for 1983 concerning Fi-
nancial and Technical Aid to Non-Associated Countries, proposed by the Commission (Corn
(82) 614, 2):
It is not possible to establish rigid poverty threshold indicators for potential recipients
using the standard criteria, since in countries with a very uneven distribution of income
and wealth, even a relatively favourable set of national, social and economic indicators
can mask very serious regional or local imbalances which should not be overlooked.
17 Whether developing countries have a general entitlement in international law to receive
aid from the developed countries is a question that is still open to debate. That entitlement
could derive from the existence of a human right to development, solemnly proclaimed by
 Guglielmo Verdirame

of a developing country to a certain benefit is not easy to assert if that country has
been arbitrarily excluded from the list of the beneficiaries; in the absence of clear cri-
teria for identifying the beneficiaries of a program, the position of the excluded po-
tential beneficiary vis-4-vis the obligors is very weak.
The simplifying rhetoric of the two economic blocs (North-South, developed
countries versus developing countries) has concealed the existence of very different
levels of development. That rhetoric has also contributed to creating a body of in-
ternational instruments and mechanisms that does not give adequate recognition to
the existence of those differences. The current practice in the identification of the
beneficiaries of aid and preferential treatment is characterized by a high degree of ar-
bitrariness on the part of donor countries and institutions - which is a fundamental
cause of unfair distribution of benefits and aid. However, the tendency to create
more than a mere two categories of countries has emerged. The establishment of a
more generally agreed to legal framework based on the creation of various categories
of countries and the adoption of a clear set of definitions11 and rules are necessary

the General Assembly in GA Res. 41/128 of 4 December 1986: Declaration on the Right to
Development, but there is little agreement on the substantive content of that right. See Ian
Brownlie, The Human Right to Development, Commonwealth Secretariat, 1989; Philip
Alston, Making Space for New Human Rights: The Case of the Right to Development, Hu-
man Rights Yearbook, 1988; Antonio Cassese, International Law in a Divided World, 1986,
359. State practice in this area can contribute to the creation of such an entitlement. However,
the fact that developed countries reject the legal existence of an obligation to contribute to
development is material.
An interesting suggestion is to interpret the chapters of the United Nations Charter on co-
operation between States (Chapters IX and X) in light of the evolution of international law.
Paolo Picone/PiergiorgioSacerdoti, Diritto internazionale dell' economia, 1980, 918. Indeed,
other provisions in the Charter such as the one on self-determination have been given a gener-
ous interpretation following changes in international affairs and practice. Although developed
countries argue that their commitment to help developing countries arises solely out of a
moral obligation, there is sufficient practice to argue at least that developed countries have
shown a certain level of commitment whatever the source of that commitment is. This prac-
tice is the result of bilateral and multilateral aid programs, declarations of foreign policy, reso-
lutions of international organizations etc. An analysis of the bilateral practice, which falls out-
side the ambit of this essay, would be material in assessing the degree of State practice in this
area.
In some cases developing countries can claim a 'legally harder' entitlement to a certain
treatment or aid program. Indeed, this is the case when the source of the aid program or other
preferential measure is a treaty. When the program is part of the activities of an international
organization, the entitlement of the developing country to the benefit is arguably softer. The
case of bilateral aid probably illustrates the best example of a very weak position of the
developing country vis. -vis a donor. The nature and intensity of the entitlement thus de-
pends on its source, and the rank in the hierarchy of the sources of international law.
...Legal definitions serve the purpose of limiting the discretion of the organs called to
enforce the law. Giovanni Tarello, L'interpretazione della legge, 1980, 153. The question is
 Definition of Developing Countries under GA TTand InternationalLaw

to improve the performance of the current system and in particular to make the
distribution of aid and preferential measures more fair.

thus whether a limitation of the power of the different organizations would be advantageous
for the beneficiaries. Whenever a decision is left to the discretion of organs, which are very
often not truly superpartes,factors such as the bargaining power of the parties, i.e. a country's
political and economic influence, may play a crucial role. The adoption of clearer criteria for
identifying various categories of developing countries would be material to limiting the im-
pact of the political weight of developed countries on the process of allocating of
international aid and assigning preferential treatment.
With the respect to the definitions, they ought to take into account economic as well as so-
cial indicators. The HDI could provide a statistical measurement of economic and social de-
velopment. See note 9. However, the HDI does not give any indication of the ability of a
certain country to cope with the problem of development with its own resources. GNP per
capitacould be used as independent criterion offering a measurement of a country's potential
ability to tackle the problem of development with its own resources.