Realizing prosperity is a fundamental challenge every country is faced with. As the Legatum Institute, a London-based think tank and educational charity, highlights, “prosperity is more than just the accumulation of material wealth.” Material wealth does not equate to freedom and security.
Prosperity has always been more than just material wealth. After all, money is simply a means of exchange. To the Legatum Institute, the journey towards prosperity extends beyond the financial. It must also involve personal fulfillment and social well-being. It’s a journey towards discovering opportunities and creating pathways from poverty to prosperity.
To that end, the Legatum Institute annually releases its report called The Legatum Prosperity Index. The Prosperity Index’s ambition is to become a tool for world leaders to enable growth and development within their respective jurisdictions.
It measures a country’s ability to promote national success. Unlike other global measuring tools which only capture traditional macroeconomics or indicators of wealth, the Legatum Institute’s Prosperity Index is an annual ranking that analyzes a country’s national prosperity across nine sub-indices. These nine sub-indices, termed as “pillars of prosperity,” include:
- Economic Quality
- Business Environment
- Safety and Security
- Personal Freedom
- Social Capital
- Natural Environment
Each of these nine pillars is further examined under 104 variables to provide a comprehensive framework and an authoritative measure of a nation’s prosperity.
Identifying a nation’s level of prosperity across these pillars enables the Legatum Institute to map how each country in the report (there are 149 countries included in the report) journeys towards or away from prosperity.
A worldview of prosperity
In the 2018 iteration of the Prosperity Index, of the 149 countries analyzed, Norway took the top spot, followed closely by New Zealand. Rounding out the top five of the annual rankings were Finland, Switzerland, and Denmark, respectively. The lowest ranked countries in the list included Yemen, Central African Republic, and Afghanistan.
While the 2018 Prosperity Index found global prosperity growing, this growth is not shared equally. Despite global prosperity being at its highest point since the Prosperity Index began reporting its findings in 2007, the largest and smallest scores on the Prosperity Index now face a gap that is larger than ever.
Safety and Security, a Prosperity Index pillar, continues to decline. Much of this decline occurs in the Sub-Saharan Africa and MENA (Middle East and North Africa) regions. The national security and personal safety factors in these regions are struggling to improve. These conditions contribute to significant declines in other pillars, predominantly in Education.
While this may signify certain challenges that may be difficult to overcome, in many respects, there is much to celebrate.
Since 2013, 113 countries in the Prosperity Index have experienced significant transformation. These nations have improved women’s access to equal representation in national parliaments, entrepreneurial environments have seen massive improvements, strong business environments have made it easier for individuals to start a business, and absolute poverty has also been significantly reduced.
Across the six global regions analyzed by the Legatum Institute, there is also significant progress occurring. From North America to the Asia-Pacific and MENA, Business Environment, a critical factor in overall prosperity, has risen across all six regions. The same can be said for Economic Quality and Personal Freedom.
The rise of scores in these pillars results in more wealth within the respective nations and greater social well-being. Moreover, the strengthening of these pillars indicates greater pathways to prosperity. Overall, this is indicative of more prosperity in the long-term.
An optimistic look towards the future
In the past decade, evidence suggests that prosperity levels are rising.
Since 2007, when the first Prosperity Index was released, a clear onward march towards global prosperity has been evident. But as the Prosperity Index dataset suggests, there is also a greater disparity, now, more than ever, between the highest and lowest scores across the annual rankings.
The progress that nations have made towards prosperity is fragile. If nations in the lower rungs of the prosperity ladder are unable to address key challenges to overall financial and social well-being, a continued divergence between the highest and lowest scores will continue to occur.
But the opposite is also true.
If the countries at the bottom of the rankings are able to positively contribute to the nine pillars of prosperity, a genuine narrowing in the gap between rich and poor will be observed. What’s more, the average level of global prosperity will make a steady rise in growth and greater opportunities.
Much needs to change, and there are many routes to progress. As long as countries continue to commit resources to greater prosperity and for the benefit of everyone in the global sphere, more of the world’s inhabitants will flourish and, in time, enjoy its fruits.