The Effects of Economic Indicators and Institutions on Human Development: a Clustering Analysis
Year: 2026
Type: article
Abstract: This study examines the complex relationship among consumption patterns, income levels, and human development, and interprets these interactions in relation to institutional quality at the national level. Utilizing 2023 cross-country data, this study examines the relationships between GDP per capita, personal consumption expenditure (PCE) per capita, and the Human Development Index (HDI). A combination of methods—such as analyzing existing research, testing relationships, applying Principal Component Analysis (PCA), and grouping countries using K-means clustering—helps to categorize 129 countries with complete data into three distinct development groups. While GDP and PCE per capita show a strong correlation, their relationship with the HDI is much weaker, indicating that economic indicators by themselves might not be sufficient to capture the outcomes of human development. The findings highlight the likelihood of sustained human development in nations with strong institutional frameworks and just systems. By linking the empirical clustering results with the institutional quality literature, this study contributes to the corpus of existing literature.
Author: Caglar Akar
Institution: Okan University
Language: Turkish
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W7166311741