A country’s prosperity is not just about the material wealth it accumulates. There is more to a nation’s prosperity than just the traditional measure of its GDP as a benchmark for its success. The prosperity index goes beyond the GDP to measure nation’s success against factors such as health, education, the personal well-being of the population, social capital, freedom, and opportunities. Thus, prosperity index is a global index that measures a country’s prosperity based on both economic and social wellbeing. Over the last decade, Legatum Institute through the Legatum Prosperity Index has tracked 149 countries around the world, benchmarking them around nine distinct categories.
The Prosperity Index showed that in 2016, the top performing countries included New Zealand, Norway, Finland, the UK, Canada, and Australia. These countries all have open markets, strong and active civil society, and a high level of personal freedom in common. Also, from the findings, the top Commonwealth countries like New Zealand, Australia, Canada, and the UK delivered a greater prosperity than any other blocks. Nordic countries such as Sweden, Denmark, and Finland also rivaled the Commonwealth countries for the top spot. The Nordic countries’ prosperity is linked to income equality, ease of doing business, and relatively stable governments.
Western European countries such as the Netherlands, the UK, Luxemburg, Ireland, Belgium, and France completed the list of the top 20 ranked countries by the Index. Most of the Western European countries recorded high prosperity in areas such as education, personal freedom, and health. These countries need to invest more in the natural environment and social capital if they are to rank even higher.
Countries forming Central Europe such as Switzerland, Germany, and Austria also rank among the top countries by prosperity index. Switzerland is the third most prosperous country in the world by the Index. It continues to thrive in areas such as education, health, and economic quality. However, it needs to improve the business environment and social capital for even better ranking.
Australia is the most prosperous country outside of Europe. It is ranked 6th globally, above some of the considered economic powerhouses such as the UK, the US, and Germany. The country prospers in health, safety and security, and personal freedom. The United States, which is one of the superpowers, ranks 17th overall. Although it continues to dominate areas such as education, economics, and personal freedom, there is a need for improvement in areas such as social capital, governance, and management of the natural environment.
Singapore, Japan, and Hong Kong were the most prosperous countries in Asian in 2016. These Asian countries have made significant progress by investing in the foundations of prosperity such as governance, education, and health. The countries have also improved freedoms and are also strengthening the society.
Why Measure Prosperity?
True prosperity is not just for the privileged few but for all. Prosperity gives a person an opportunity to discover, fulfill, and enjoy their potential. In measuring prosperity, the goal of Legatum Prosperity Index is the transformation of countries and people. The goal is achieved by discovering what life is really like for the people in a country, discovering what prevents them from being better, and removing any obstacle to prosperity. The Index aims to spark a debate and to challenge policymakers and other stakeholders to have a holistic view of prosperity and to better understand how to enhance it.