Classification of Latin American and Caribbean countries based on multidimensional development indicators: A multivariate empirical analysis

This study develops a multidimensional classification of Latin American and Caribbean countries based on a multidimensional set of economic, social, technological, and environmental indicators. This study develops a multidimensional assessment of the performance of Latin American and Caribbean countries, taking into account the following indicators for the period 2017-2022: education expenditure (% of GDP), health expenditure (% of GDP), GDP per capita (constant USD), CO2 emissions per capita (metric tons), energy consumption per capita (kWh), internet users (% of population), mobile phone subscriptions (per 100 inhabitants), and the Global Innovation Index (GII). Initially, through the application of principal component analysis (PCA), the objective was to reduce the complexity of the data set and reveal the main structural dimensions. Subsequently, cluster analysis was used to classify countries according to shared development patterns. To achieve this, the average of the indicators for the 2017-2022 period was used as a basis, which enabled the reduction in short-term distortions and the capture of structural trends. The results reveal the existence of distinct groups, with countries with higher levels of digital connectivity, investment in human capital, and economic dynamism experiencing more favorable development conditions.