# Characteristics of First World Countries: Developed Nations Explained

![First World](https://www.investopedia.com/thmb/HGSgo_yHf-NyqLH2MW0dmEKfhME=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/first-world-edit-45c91ba90ff245ee84a7e5b8c4a91d39.jpg)

*— Laura Porter / Investopedia*

## What Is the First World?

A "first world" country is usually an industrialized, democratic nation with political and economic stability, a [capitalist](https://www.investopedia.com/terms/c/capitalism.asp) economy, and a high [standard of living](https://www.investopedia.com/terms/s/standard-of-living.asp). The term originated during the Cold War, referring to nations aligned with the United States and Western allies.

Even though the geopolitical landscape has changed since the Soviet Union collapsed in 1991, a "first world" country still means stable democracies, high living standards, and strong economic indicators like GDP and literacy rates. Examples include the United States, Japan, Canada, Australia, and many Western European countries.

### Key Takeaways

*   The term "first world" originated during the Cold War to describe countries aligned with the United States and has evolved to denote developed, industrialized nations characterized by democracy and a high standard of living.  
    
*   Modern metrics such as GDP, literacy rates, and the Human Development Index are used to define First World nations, which include the U.S., Japan, Canada, and much of Western Europe.  
    
*   Critiques of the "first world" designation highlight issues like wealth inequality within these nations, leading to regions that experience poverty similar to developing countries.  
    
*   The designation has been criticized for being outdated and reflecting a hierarchy among nations, leading to a preference for terms like "developed" or "industrialized" to describe these countries.  
    

## Key Traits and Examples of Developed Nations

Examples of first world countries include the United States, Canada, Australia, New Zealand, and Japan. Many Western European nations qualify too, like Great Britain, France, Germany, Switzerland, and the Scandinavian countries.

Definitions of first world countries vary. For example, a first-world nation might align with Western countries, be highly industrialized, have low poverty rates, and access modern resources and infrastructure.

 [GDP](https://www.investopedia.com/terms/g/gdp.asp), [GNP](https://www.investopedia.com/terms/g/gnp.asp), mortality rates, and literacy rates are metrics used to define first world nations. The [Human Development Index](https://www.investopedia.com/terms/h/human-development-index-hdi.asp) is also an indicator of which countries might be categorized as having first world status.

First world countries generally have stable [currencies](https://www.investopedia.com/terms/c/currency.asp) and robust [financial markets](https://www.investopedia.com/terms/f/financial-market.asp), attracting global investors. While not purely capitalist, first world countries often have [free markets](https://www.investopedia.com/ask/answers/042215/what-difference-between-capitalist-system-and-free-market-system.asp), private enterprise, and private property ownership.

> **Fast Fact**
>
> Under the original Cold War alliance designations, the first world consisted of the U.S., Western Europe, and their allies. The second world was the so-called Communist Bloc: the Soviet Union, China, Cuba, etc. The remaining nations, which didn’t align with either group, were assigned to the third world—most of Africa, Asia, the Middle East, and Latin America. However, this definition includes many countries that are economically stable, which does not fit the contemporary definition of a third world country.

## The Controversy of "First World" Terminology

Controversy exists around the use of the term “first world” to describe democratic countries in comparison with [developing nations](https://www.investopedia.com/terms/l/ldc.asp) and those with political regimes that do not align with Western nations’. There is a tendency toward using the phrase as a way to rank some nations above others in terms of geopolitical significance. Such terms can cause tensions between countries, especially when developing nations negotiate with first world countries or seek international support.

First world nations often advocate for international policies, especially economic ones, that favor their industries and enhance wealth and stability. This can include efforts to influence decisions made in such forums as the [United Nations](https://www.investopedia.com/terms/u/united-nations-un.asp) or the [World Trade Organization (WTO)](https://www.investopedia.com/terms/w/wto.asp).

Designation as a first world nation does not necessarily mean a country has local access to certain luxuries or resources that are in demand. For example, oil production is a staple industry in many countries that historically have not been regarded as first world nations. Brazil, for instance, contributes substantial amounts of oil to the overall world supply, along with other forms of production; however, the country is recognized as a developing, industrialized state rather than as a first world nation.

> **Important**
>
> In contemporary parlance, “developed” or “industrialized” nation is considered a preferable term to “first world country.”

## Evolving Global Dynamics Post-Cold War

There is an argument to be made that the model of dividing nations into first, second, or third worlds represents an archaic and antiquated perspective.

Since the end of the Cold War, the United States has become one of the world’s superpowers, and an increasing number of countries have embraced or are in the process of adopting American-style democracy and capitalism. These [countries](https://www.investopedia.com/insights/worlds-top-economies/) are neither abysmally poor nor exceedingly rich; rule of law and democracy are their defining features. As such, it would be counterintuitive to describe them with the pejorative term of “third world.” Examples of these types of countries include Brazil and India.

The original "first world" definition aligned with the U.S. has led to odd classifications of some prosperous nations. Oil-rich Saudi Arabia, which has a higher [capita income](https://www.investopedia.com/terms/i/income-per-capita.asp) than Turkey, is often still classified as second or third world, not first world.

Then there is the increasing problem of wealth inequality. In first world countries, high per capita income often hides uneven wealth distribution. Some first world countries have [poverty](https://www.investopedia.com/terms/p/poverty.asp)\-stricken areas similar to those in developing countries. For example, residents of Appalachia and other rural areas of the United States often lack resources and essentials for a minimum standard of living. Even certain sections of large cities, such as the South Side of Chicago or northern Milwaukee’s 53206 neighborhood, feature impoverished conditions.

## What Is the First World?

While highly subjective, “first world” is a term that consists of countries that may have the following characteristics: stable democracies, high standards of living, capitalist economies, and economic stability. Other measures that may be used to indicate first world countries include gross domestic product (GDP) or literacy rates. Broadly speaking, countries that may be considered first world include the United States, Japan, Canada, and Australia, among others.

## What Defines a First World Country?

There is no universal way to define a first world country. They are often [characterized as industrialized](https://www.investopedia.com/terms/n/newly-industrialized-country.asp) and democratic nations. These features are typically accompanied by stable currencies, sound financial markets, and modern infrastructure. Due to these factors, first world countries often attract foreign direct investment and capital inflows.

## Why Is the Term "first world" Contentious?

“First world” is a problematic term because it is outdated. First coined during the Cold War, it referred to countries that were allies of the United States—mostly other westernized countries, as opposed to countries that aligned with the former Soviet Union. Because the economic indicators used to define the first world vary by their perspective, the first world can represent an opaque concept of a country’s economic stature. For instance, despite Saudi Arabia having per capita income that is nearly equal to Portugal’s, it is often considered a second world nation.

## Final Thoughts on Developed Nations

First world countries are characterized by high industrialization, technological advancement, and strong economic indicators, contributing to a high standard of living. Historically, the term "first world" emerged during the Cold War to describe nations aligned with the United States, but it has since evolved to denote developed nations like the United States, Canada, and several European countries.

While the term has become somewhat outdated due to its hierarchical implications, modern alternatives like "developed" or "industrialized" nations provide a more accurate understanding of a country's economic status. The use of GDP, literacy rates, and the Human Development Index helps gauge a country's development, yet challenges persist, including wealth inequality and regional poverty within these nations. It's essential to acknowledge these disparities to better understand national development in today's global landscape.

> **Article Sources**
>
> 1.  U.S. Department of State, Office of the Historian. “[The Collapse of the Soviet Union](https://history.state.gov/milestones/1989-1992/collapse-soviet-union).”
>     
> 2.  The World Bank, World Bank Open Data. “[GDP Per Capita (Current US$)—High Income, Saudi Arabia](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=XD-SA).”
>     
> 3.  The World Bank, World Bank Open Data. “[GDP Per Capita (Current US$)—Turkey (Turkiye)](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=TR).”
>     
> 4.  University of Wisconsin-Milwaukee, Center for Economic Development. “[Milwaukee 53206: The Anatomy of Concentrated Disadvantage in an Inner City Neighborhood 2000–2017](https://uwm.edu/ced/wp-content/uploads/sites/431/2019/02/Milwaukee-53206EXECSUMM.pdf).”
>     
> 5.  The World Bank, World Bank Open Data. “[GDP Per Capita (Current US$)—Portugal](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PT).”