In this paper we are trying to form internally homogeneous groups of Slovenian municipalities on the basis of their socio-economic indicators. Because of the small size of municipalities only a limited number of indicators is available and beside that some of them are conceptually inappropriate.
The methodological approach is based on cluster analysis. In the first phase, Ward’s hierarchical procedure has been used for identification of the number of clusters and definition of group centroids. In the second phase, centroids have been used as the initial seed points for the K-means non-hierarchical procedure, which has improved the formation of the clusters.
Four groups of municipalities are identified on the basis of all considered socio-economic indicators. The groups can be clearly ranked with regard to those socio-economic indicators that reflect their development characteristics. The latter confirms the well-known fact about the less developed eastern part and the more developed western part of Slovenia. There is a small group of municipalities where the situation is especially severe.