The classification of countries by cluster and by factor analysis

This paper aims at classifying countries on the basis of a multitude of country characteristics using cluster and factor analysis. The results of the analysis are in particular compared with the categories of least developed countries (LLDCs) and of newly industrialized countries (NICs) used by international agencies. The LLDCs clearly emerge as a seperate group from the analysis; but some countries presently included do not belong to this group, while some countries not included have LLDC characteristics. The NICs do not emerge as a separate homogeneous group. Clearly the criteria presently used for NICs are quite narrow.