Application of Classification Methods in Assessment of NATO Member Countries' Economic, Security and Political Risks

The aim of this paper is to attempt possible quantification of determinants of military expenditure and their application to current NATO member countries. To analyse the economic, security and political risks of NATO member countries, author employ multivariate statistical techniques which take into consideration the multivariate properties of the data sets used as input variables. Classification of countries based on cluster analysis has made it possible to identify disparities between NATO member countries, and thus to describe diverse economic or security environment affecting the amount of military expenditure as a percentage of the respective countries' gross domestic product.