Over the past decade, a tidal wave of change has occurred. More and more nations have become empowered, thanks in part to open economies and more inclusive societies. This has resulted in more prosperous nations around the world.
Global prosperity has risen steadily in recent years, thanks in part to a more globalised and interconnected world. In fact, according to the Legatum Institute, an independently funded London think tank, prosperity has summited to its highest point in recorded human history.
These great strides forward mean there is more equal gender representation in national parliaments. The business and entrepreneurial environment has improved, resulting in greater ease of starting a business. More nations are empowering their citizens, helping develop healthy, educated people who can reach their full potential.
In fact, of the 149 countries covered in the Legatum Prosperity Index, 95 countries have seen their prosperity score rise to impressive numbers.
Measurements of success
The Legatum Prosperity Index is a comprehensive annual ranking that determines how 149 countries create pathways from poverty to prosperity. The Prosperity Index covers 90% of the world’s population and 99% of global GDP.
The methodology used by the Legatum Institute measures far more than just the accumulation of material wealth. Their innovative and robust metrics account for 104 variables that are categorised across nine pillars, with each pillar rating each country an overall score out of 100.
These nine key areas include:
Economic Quality
Business Environment
Governance
Education
Health
Safety and Security
Personal Freedom
Social Capital
Natural Environment
This framework moves beyond traditional macroeconomic measurements found in other index reports.
This enables the Legatum Institute to accurately assess a country’s prosperity, wellbeing, and national success. By combining theoretical and empirical research, the Legatum Institute has become an authoritative voice in objectively measuring human progress.
The recent Legatum Prosperity Index 2018 report has identified the handful of countries that have dominated the top places across all nine pillars. Here are the top 5 countries in terms of national prosperity as detailed in the 2018 Legatum Prosperity Index:
5. Denmark
The year 2018 has seen Denmark positively flourish. This Nordic country’s social capital, economic quality, and business environment pillar rankings have helped it climb two rank positions when compared to its 2017 Prosperity Index ranking.
Despite Denmark’s health pillar ranking increasing by five places when compared to last year, it is still its lowest pillar ranking. Personal freedom also saw a dip in performance, dropping one place from its previous position.
Denmark’s ranking across each pillar is as follows:
Economic Quality – 8th
Business Environment – 8th
Governance – 9th
Education – 10th
Health – 18th
Safety and Security – 9th
Personal Freedom – 16th
Social Capital – 5th
Natural Environment – 11th
4. Switzerland
This “land of milk and honey” is also the land of enviable education, economic quality, and health. Thanks to positive changes across its natural environment pillar ranking, Switzerland has seen its Prosperity Index ranking climb up to fourth position compared to fifth in last year’s index.
Switzerland has peaked at fourth position in the 2018 Prosperity Index ranking because of its low score in personal freedom and a nine-place drop on the Safety and Security pillar ranking.
Switzerland’s full performance across each pillar is shown below:
Economic Quality – 4th
Business Environment – 10th
Governance – 4th
Education – 2nd
Health – 4th
Safety and Security – 13th
Personal Freedom – 21st
Social Capital – 13th
Natural Environment – 10th
3. Finland
Finland has remained a stalwart supporter of national prosperity. It has maintained high rankings on the Legatum Prosperity Index with its ranking position remaining unchanged since last year. In fact, since the inception of the Prosperity Index in 2006, Finland has consistently ranked in the top three countries.
In terms of prosperity pillar rankings, Finland ranks high education and governance, with relatively lower pillar rankings in health and social capital. This year’s Prosperity Index saw Finland’s pillar ranking drop by nine places.
Here is where Finland stands across each pillar ranking:
Economic Quality – 12th
Business Environment – 6th
Governance – 1st
Education – 1st
Health – 25th
Safety and Security – 11th
Personal Freedom – 11th
Social Capital – 14th
Natural Environment – 3rd
2. New Zealand
Despite its sparse population, as there are just under five million New Zealanders, New Zealand has enjoyed ranking in the top two positions since the Legatum Institute published its annual Prosperity Index in 2006.
While it has fallen to second place compared to last year, New Zealand has had notable changes in its health pillar ranking, increasing by one place. Social capital and personal freedom are two pillar rankings where New Zealand has consistently ranked impressively high in for the past five years.
The overall performance of New Zealand in 2018 is as follows:
Economic Quality – 14th
Business Environment – 2nd
Governance – 2nd
Education – 18th
Health – 17th
Safety and Security – 24th
Personal Freedom – 2nd
Social Capital – 1st
Natural Environment – 4th
1. Norway
The enviable first place position in this year’s Prosperity Index goes to Norway.
Over the past five years, Norway has blazed its way to first position, steadily leading its nation’s pathway to prosperity, climbing up the Prosperity Index rankings and dethroning New Zealand, which had maintained first place in the Prosperity Index for four years straight.
Norway has improved its rank to first place by seeing positive changes in the safety and security pillar, increasing its ranking by 16 places. Social capital and governance are also highly rated, while business environment is where the nation gets its lowest pillar ranking.
Here is Norway’s full performance in the 2018 Prosperity Index:
Economic Quality – 7th
Business Environment – 11th
Governance – 3rd
Education – 4th
Health – 8th
Safety and Security – 1st
Personal Freedom – 9th
Social Capital – 3rd
Natural Environment – 8th
Unequal prosperity growth
While improvements in prosperity should be celebrated, with global prosperity at an all-time high, the gap between the highest ranking countries and the lowest ranking countries has become stratospheric.
In 2018, 113 countries have flourished, improving their nation’s prosperity score, while 36 countries have languished behind. The falls experienced by these 36 countries are often synonymous with worsening personal freedom, social capital, and safety and security.
Despite the divergent growth in prosperity across countries shown in this year’s Prosperity Index, there is still much to celebrate. The world’s economic quality is generally on the rise, meaning there are fewer people living in absolute poverty.
In many respects, these drivers of progress show that the world is steadily becoming a better place. This is good news for all as more and more nations are fulfilling their potential, and identifying their pathways to future prosperity.
