How do people flourish? Why are some nations more prosperous than others and how do poorer communities transition from poverty to increasing prosperity? As a measurement of prosperity, The Legatum Prosperity Index™ is unique. It gives a far truer picture of the life chances for the world’s population, and the performance of nations, than any Index of GDP alone could hope to. True prosperity is as much about well-being as wealth and New Zealand, which tops the Index, is a model for delivering both.

Wednesday, November 9, 2016
Legatum Institute

How do people flourish? Why are some nations more prosperous than others and how do poorer communities transition from poverty to increasing prosperity?

As a measurement of prosperity, the Legatum Prosperity Index™ is unique. It gives a far truer picture of the life chances for the world’s population, and the performance of nations, than any Index of GDP alone could hope to. True prosperity is as much about well-being as wealth and New Zealand, which tops the Index, is a model for delivering both.

The Legatum Prosperity Index™ ranks nations over nine areas of potential success or failure: Economic Quality, Business Environment, Governance, Education, Health, Safety & Security, Personal Freedom, Social Capital, and the Natural Environment.

The 10th Legatum Prosperity Index™ covers 149 countries, and is published today by the Legatum Institute, an international think tank based in London. Our focus is on understanding, measuring, and explaining the journey from poverty to Prosperity for individuals, communities, and nations.

The good news is that viewed through this lens the world as a whole, in 2016, has seen its highest level of prosperity for the past decade.

Why are some countries poor but prosperous?

The Index also shows how much prosperity a country delivers given its wealth. The top performing countries: New Zealand, Finland, the UK, Canada, and Australia, have in common open markets, high levels of personal freedom, and strong civil society.

However, developing countries like Rwanda, Malawi, and Nepal also perform well, proving that with the right foundations, prosperity can flourish with relatively little wealth.

Those delivering little prosperity with vast wealth are all oil producers. These include poorer countries like Sudan, but also richer countries like Saudi Arabia, showing that the resource curse is a limit on prosperity for rich and poor alike.

Prosperity is at risk across the world

Countries that have not invested in the foundations of prosperity growth see that prosperity at risk. Latin American prosperity, unlike any other region, is still closely tied to its economic fate. Prosperity gains have not been the result of anything but rising wealth. This prosperity is at severe risk.

The opposite pattern is seen in Asia, where the countries that have made the most significant progress have invested in the foundations of prosperity. Indonesia, one of the biggest risers in the Prosperity Index over the past decade, has seen improving freedoms and a rapidly strengthening society.

The risks are not confined to those yet to see high levels of prosperity. The Index sees US prosperity stagnate, despite rising wealth. Falling health outcomes, a worsening security situation, and an economy that is not delivering on opportunity are driving relative decline.


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