Third World The term Third World arose during the Cold War to define countries that remained non - aligned with either NATO ( with the United States , Western Europe an nations and their allies representing the First World ) , or the Communist Bloc ( with the Soviet Union , the People ' s Republic of China , Cuba and their allies representing the Second World ) . This terminology provided a way of broadly categorizing the nations of the Earth into three groups based on social , political , and economic divisions . The Third World was normally seen to include many countries with colonial pasts in Africa , Latin America , and Asia . It was also sometimes taken as synonymous with countries in the Non - Aligned Movement . In the so - called dependency theory of thinkers like Raul Prebisch , Walter Rodney , Theotonio dos Santos , and Andre Gunder Frank , the Third World has also been connected to the world economic division as " periphery " countries in the world system that is dominated by the " core " countries . Due to the complex history of evolving meanings and contexts , there is no clear or agreed upon definition of the Third World . Some countries in the Communist Bloc , such as Cuba , were often regarded as " Third World " . Because many Third World countries were extremely poor , and non - industrialized , it became a stereotype to refer to poor countries as " third world countries " , yet the " Third World " term is also often taken to include newly industrialized countries like India , Brazil or China . Historically , some European countries were part of the non - aligned movement and a few were and are very prosperous , including Switzerland and Austria . Over the last few decades , the term " Third World " has been used interchangeably with the Global South and Developing Countries to describe poorer countries that have struggled to attain steady economic development , a term that often includes former " Second World " countries like Russia . This usage , however , has become less preferred in recent years . Etymology . French demographer , anthropologist and historian Alfred Sauvy , in an article published in the French magazine " L ' Observateur " , August 14 , 1952 , coined the term " Third World " , referring to countries that were unaligned with either the Communist Soviet bloc or the Capitalist NATO bloc during the Cold War His usage was a reference to the Third Estate , the commoners of France who , before and during the French Revolution , opposed the clergy and nobles , who composed the First Estate and Second Estate , respectively . Sauvy wrote , " This third world ignored , exploited , despised like the third estate also wants to be something . " He conveyed the concept of political non - alignment with either the capitalist or communist bloc . Third World vs . Three Worlds . The " Three Worlds Theory " developed by Mao Zedong is different from the Western theory of the Three Worlds or Third World . For example , in the Western theory , China and India belong respectively to the second and third worlds , but in Mao ' s theory both China and India are part of the Third Non - Aligned World . Third Worldism . Third Worldism is a political movement that argues for the unity of third - world nations against first - world influence and the principle of non - interference in other countries ' domestic affairs . The ideology is popular among leftist intellectuals as well as with Third - World politicians of all political stripes . The notion has been criticized as providing a fig leaf for human - rights violations and political repression by dictatorships . History . A number of Third World countries were former colonies . Having gained independence many of these countries , especially smaller ones , were faced with the challenges of nation and institution - building on their own for the first time . Due to this common background , many of these nations were " developing " in economic terms for most of the 20th century , and many still are . This term , used today , generally denotes countries that have not developed to the same levels as OECD countries , and are thus in the process of " developing " . In the 1980s , economist Peter Bauer offered a competing definition for the term " Third World " . He claimed that the attachment of Third World status to a particular country was not based on any stable economic or political criteria , and was a mostly arbitrary process . The large diversity of countries considered part of the Third World — from Indonesia to Afghanistan — ranged widely from economically primitive to economically advanced and from politically non - aligned to Soviet or Western leaning . An argument could also be made for how parts of the U . S . are more like the Third World . The only characteristic that Bauer found common in all Third World countries was that their governments " demand and receive Western aid , " the giving of which he strongly opposed . Thus , the aggregate term " Third World " was challenged as misleading even during the Cold War period because it had no consistent or collective identity among the countries it supposedly encompassed . Recently the term " Majority World " has come into use , since most people of the world live in poorer and less developed countries . Foreign aid and development . During the Cold War , unaligned countries of the Third World were seen as potential allies by both the First and Second World . Therefore , the United States and the Soviet Union went to great lengths to establish connections in these countries by offering economic and military support to gain strategically located alliances ( e . g . , United States in Vietnam or Soviet Union in Cuba ) . By the end of the Cold War , many Third World countries had adopted capitalist or communist economic models and continued to receive support from the side they had chosen . Throughout the Cold War and beyond , the countries of the Third World have been the priority recipients of Western foreign aid and the focus of economic development through mainstream theories such as modernization theory and dependency theory . By the end of the 1960s , the idea of the Third World came to represent countries in Africa , Asia and Latin America that were considered underdeveloped by the West based on a variety of characteristics ( low economic development , low life expectancy , high rates of poverty and disease , etc . ) . These countries became the targets for aid and support from governments , NGOs and individuals from wealthier nations . One popular model , known as Rostow ' s stages of growth , argued that development took place in 5 stages ( Traditional Society ; Pre - conditions for Take - off ; Take - off ; Drive to Maturity ; Age of High Mass Consumption ) . W . W . Rostow argued that Take - off was the critical stage that the Third World was missing or struggling with . Thus , foreign aid was needed to help kick start industrialization and economic growth in these countries . However , despite decades of receiving aid and experiencing different development models ( which have had very little success ) , many Third World country ' s economies are still dependent on developed countries and are deep in debt . There is now a growing debate about why Third World countries remain impoverished and underdeveloped after all this time . Many argue that current methods of aid are not working and are calling for reducing foreign aid ( and therefore dependency ) and utilizing different economic theories than the traditional mainstream theories from the West . Historically , development and aid have not accomplished the goals they were meant to and currently the global gap between the rich and poor is greater than ever . Over the last few decades , global population growth has largely been focused in Third World countries ( which often have higher birth rates than Developed countries ) . As populations expand in poorer countries , rural people are flocking to cities in an extensive urban migration that is resulting in the creation of massive shanty towns and slums A lot of times there is a clear distinction between First and Third Worlds . When talking about the Global North and the Global South , the majority of the time the two go hand in hand . People refer to the two as ' Third World / South ' and ' First World / North ' ; because in theory the Global North is supposedly more affluent and developed , whereas the Global South is less developed and often more poor .