The top three-ranked countries in the Legatum Prosperity Index, Australia, Austria and Finland, demonstrate the new principles of well-rounded prosperity by their separate economic and social paths to the top.
Austria scores highly in education, which is vital to long term income growth, as well as health, a key to quality of life. Finland boasts of high governance, helping to drive both wealth and wellbeing in the country. In addition, the Finns report very high levels of satisfaction with the freedom to choose the course of their own lives. Germany ranks third overall in economic competitiveness, surpassed only by Singapore and Hong Kong, and demonstrates high levels of education, invested capital growth and innovation. Switzerland ranks 4th overall in promoting life satisfaction through good governance, high incomes and community life.
In general, the Nordic countries achieve top scores in the drivers of life satisfaction. These countries are rich, highly democratic, extremely healthy, enjoy vibrant community life, and their citizens have great personal and political freedom to make choices in determining the course of their own lives. No other region can match the Nordic performance in all of these indicators of liveability. At the same time, however, the Nordic countries score less well on economic vibrancy and innovation, competition in domestic markets, and particularly, on entrepreneurship.
Dr. William Inboden, senior vice president of the Legatum Institute commented that, "True prosperity consists of more than money. It also includes happiness, health, and liberty. The Prosperity Index shows that in addition to economic success, a society's prosperity is based on strong families and communities, political and religious liberty, education and opportunity, and a healthy environment."
Australia leads the Index because of its strong performance in education, governance, and promoting entrepreneurship. The top 25 percent of the Index is also marked by a number of countries with imbalanced results. Nordic countries score very well on liveability indicators, but poorly on some key wealth indicators. Asian countries report strong indicators of economic competitiveness, but show comparative weaknesses in liveability, including limited equality of opportunity for women, a degraded natural environment, and long working hours.
All successful countries demonstrate several common attributes, with the top ten scoring especially high on five economic indicators:
- Growth in Invested Capital,
- Good Governance on economic issues,
- Commercialising Innovation,
- Good Governance on political issues,
- High Incomes.
All but Singapore and Hong Kong scored nearly as well on community life and family life indicators, which are important measures of social capital. Conversely, the bottom 25 percent of the Index countries get especially low marks on the above indicators as well as freedom of choice. They are particularly burdened by low incomes and high dependence on foreign aid.
The 2008 Prosperity Index finds that both individuals and governments have a role to play in promoting national prosperity. Alan McCormick, a Managing Director at Legatum, observed, "The 2008 Legatum Prosperity Index reveals that governments alone cannot mandate prosperity, but they can foster an environment that encourages prosperity through implementation of wise policies. Individual citizens are responsible for taking ownership of their lives and, in richer countries, embracing the opportunities that accompany increased freedom and privilege."
Mr McCormick concluded, "Amidst widespread global economic insecurity, the findings of this year's Index could not be timelier. The Prosperity Index is a manifesto for advancing long-term national prosperity which can act as a guide for leaders from all sections of society."
