Legatum Prosperity Index

While historic definitions of prosperity often equate it with financial success, modern interpretations of the term are more all-encompassing, reflecting not just whether a country is high- or low-income, but that country’s overall quality of life and level of human development. One well-respected measure of prosperity is the Legatum Prosperity Index, an annual ranking developed by the Legatum Institute. Launched in 2007, the Legatum Prosperity Index ranks 167 of the world’s countries and territories across 104 different variables in twelve categories including health, education, personal freedoms, safety and security, and the business environment.

The most prosperous countries in the world have high levels of personal freedom, safety and security, education, and health. These countries also have healthy natural environments and conditions that promote economic prosperity through such features as protection of investments, favorable business regulations, and a healthy market infrastructure.

Top 10 Most Prosperous Countries (Legatum Prosperity Index 2023)

Top 10 Least Prosperous Countries (Legatum Prosperity Index 2023)

Categories of the Legatum Prosperity Index

• Safety and Security — Tracks the impact of war, terror, conflict, and crime on individuals’ overall security in both the short and long term.
• Personal Freedom — Tracks basic legal rights, individual liberties, and social tolerance within a country’s society and legal system.
• Governance — Measures government corruption and effectiveness; examines checks and balances on governmental power.
• Social Capital — Tracks civic participation, social norms, institutional trust, and strength of personal and social relationships.
• Investment Environment — Tracks the availability and security of financial investments.
• Enterprise Conditions — Measures the environment and options for businesses to launch, expand, and remain competitive.
• Infrastructure and Market Access — Measures the strength of the commerce system and tracks distortions in the trade market for goods and services.
• Economic Quality — Measures the economy’s ability to engage the full available workforce and generate sustainable wealth.
• Living Conditions — Measures overall quality of life by tracking availability of shelter, basic services, internet connectivity, and material resources.
• Health — Measures availability of health services, mortality rate, risk factors and rates of illness, and health outcomes.
• Education — Tracks enrollment across all levels (preschool through tertiary education) and skill sets in the adult population.
• Natural Environment — Measures the portion of the environment that directly impacts daily life and could influence the prosperity of future generations.

Individual Country Profiles

1. Denmark

Denmark overtook Norway to assume the title of most prosperous country in the 2019 rankings and has yet to relinquish it. In the 2023 report, Denmark ranked first for Social Capital, second for both Personal Freedom and Living Conditions, and third for Governance. Denmark is also one of the happiest countries in the world and ranks high on the Global Peace Index each year. Denmark displays a high level of equality and a strong sense of responsibility for social welfare—two things that contribute to Denmark’s happiness and safety. Additionally, Denmark experiences very little corruption in both politics and business, which contributes to its high ranking for governance.

2. Sweden

Number two on the 2023 Legatum index, Sweden is another of the world’s most well-developed nations. The country ranked first for the Natural Environment, third for Living Conditions, and fourth for both Social Capital and Personal Freedom. Sweden has a high life expectancy of 83.8 years and free access to health care for all of its citizens. Sweden’s economy is highly competitive and diverse, and it typically maintains a trade surplus and very low unemployment rates.

3. Norway

Ranked as the world’s third-most-prosperous country, Norway ranked first for Personal Freedom, second for Governance, and third for Safety & Security and Social Capital. Like Denmark, Norway is a welfare state that takes care of its citizens, such as providing health insurance and education subsidies. Like Denmark and Switzerland, Norway has an annual score on the Human Development Index (HDI) that ranks among the world’s highest, thanks in part to high life expectancies, generous per capita income, and a strong education system.

4. Finland

Finland ranked first for Governance in 2023 and second in Natural Environment, Education, and Investment Environment. One of the most environmentally friendly countries in the world according to the Environmental Performance Index, Finland ranks high for environmental health, air quality, and water and sanitation. Finland also ranked third for Personal Freedom.

5. Switzerland

Fifth on the 2023 Legatum index, Switzerland ranked first for Enterprise Conditions, second for Safety & Security as well as Economic Quality, and fourth for Governance and Education. Switzerland is one of the most developed nations in the world according to the HDI and possesses an excellent healthcare system, granting its citizens a life expectancy of 84.5 years. Switzerland is known for having strong infrastructure and institutions, as well as a very strong overall growth outlook. Additionally, Switzerland has a beautiful natural environment and is considered one of the world’s most environmentally friendly countries.

6. Netherlands

The Netherlands is sixth on the 2023 Legatum index but ranked first in the world for Living Conditions. The Netherlands also ranked third for Investment Environment and Infrastructure & Market Access, and fifth for both Personal Freedom and Governance. The Netherlands ranks as one of the world’s largest exporters of goods and displays a very high quality of life with high levels of education, low unemployment, and a healthy work-life balance.

7. Luxembourg

Luxembourg is the seventh country on the 2023 Legatum index. Luxembourg ranked first for Safety & Security and fourth for Enterprise Conditions. Luxembourg’s GDP is growing fairly quickly, and the country enjoyed the highest per-capita GDP in the world in 2022. Additionally, Luxembourg is a very safe country with little crime, little of which is more severe than petty theft.

8. Iceland

Iceland is the eighth most prosperous country on the 2023 Legatum index and ranked fifth for Social Capital which includes relationships, social norms, and civic participation in the country. It also ranked seventh for Personal Freedom. Iceland is known for its social stability and equality among its people, with little tension among social and economic classes. Iceland has a mixed economy that is well developed and capitalist but also supports a welfare state, providing universal health care and tertiary education for its citizens. Additionally, Iceland ranked high for Safety & Security and Health. Iceland is considered one of the safest countries in the world, to the extent that the country does not assign personal firearms to its police forces.

9. Germany

Germany ranked ninth overall on the 2023 Legatum Prosperity index. Germany placed fifth in the Infrastructure & Market Access category and sixth in Enterprise Conditions. Germany’s economy is the strongest in Europe and one of the largest in the world. Germany is known for being one of the most innovative and technologically-advanced countries in the world, exporting automobiles, pharmaceuticals, electronics, and machinery. Additionally, living conditions are very favorable for German citizens, who benefit from universal healthcare coverage.

10. New Zealand

Tenth on the list, New Zealand stands out as a reassuringly stable place of economic, political, and social stability. New Zealand ranks second for Social Capital, sixth for Governance, and seventh for Investment Environment. The country’s political stability and effective governance have translated to stable economic conditions. New Zealand values the contributions that entrepreneurs and investors have made toward the development of its economy and consistently invests in infrastructure to support them.