The Legatum Prosperity Index is an annual ranking developed by the Legatum Institute. Launching in 2007, the Legatum Prosperity Index rankings are based on a variety of factors including wealth, economic growth, quality of life, health, education, and personal well-being. Its purpose is to highlight the strengths and weaknesses of nations to determine the economic choices that need to be made to further build inclusive societies, open economies, and empower people to drive prosperity.
The index is based on an analysis of 167 countries around the world across 104 different variables. The most prosperous countries in the world have high levels of freedom, safety and security, education, and health. These countries also have healthy natural environments and conditions that allow for economic prosperity such as protection of investments, favorable business regulations, and market infrastructure.
Denmark took the number one spot from Norway in the 2019 rankings. Denmark ranked first for living conditions, second for personal freedom and social capital, and third for effective governance. Denmark is also the second-happiest country in the world and ranks fifth on the Global Peace Index. Denmark has a high level of equality and a strong sense of responsibility for social welfare – two things that contribute to both Denmark’s happiness and its safety. Additionally, Denmark experiences little corruption in both politics and business, which contributes to its high ranking for governance.
Bumped out of its number one spot on the Index for 2019 is Norway. Norway ranks first for personal freedom, governance, and social capital. Like Denmark, Norway is a welfare state that takes care of its citizens, such a providing health insurance and education subsidies. Norway has the highest human development score on the Human Development Index (HDI) of .953 with high life expectancies, per capita income, and levels of education.
Switzerland is third on the Legatum index. Switzerland ranks first for safety and security and second for economic equality. Switzerland is also one of the most developed nations in the world according to the HDI, ranking just below Norway. Switzerland has some of the best healthcare for its citizens, whose life expectancy is 83.6 years. Switzerland is known for having strong infrastructures, institutions, and has a very strong overall growth outlook. Additionally, Switzerland has a beautiful natural environment and is one of the most environmentally friendly countries in the world.
Sweden is number four on the Legatum index. Sweden is one of the most well-developed nations in the world. The country ranks first for the natural environment, third for living conditions and fourth for personal freedom. Sweden has a high life expectancy of 82.7 years and free access to health care for all of its citizens. Sweden’s economy is highly competitive and diverse; typically maintain a trade surplus and boasting very low unemployment rates.
Finland ranks second for the natural environment and is one of the most environmentally friendly countries in the world. On the Environmental Performance Index, Finland ranks high for environmental health, air quality, and water and sanitation. Finland also ranks second for governance and third for personal freedom.
6. The Netherlands
The Netherlands is sixth on the Legatum index, ranking second for living conditions and fourth for governance and market access and infrastructure. The Netherlands is the eighth-largest exporter of goods in the world and high the seventeenth-highest GDP. Additionally, quality of life in the Netherlands is very high with high levels of education, low levels of unemployment, and a healthy work-life balance.
7. New Zealand
New Zealand stands out as a reassuringly stable place of economic, political, and social stability. New Zealand ranks third for the investment environment and fifth for governance. The country’s political stability and effective governance have translated to stable economic conditions. New Zealand values to contributions that entrepreneurs and investors have made for the development of its economy and consistently invests in infrastructure to support them.
Germany ranks eighth overall on the Legatum index, ranking fourth for enterprise conditions and fifth for economic quality and living conditions. Germany has the strongest economy in Europe and the fourth-largest economy in the world. The country 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 have universal healthcare coverage.
Luxembourg is the ninth country on the Legatum index. Luxembourg ranks second for market access and infrastructure and second for safety and security. Luxembourg’s GDP is growing fairly quickly and the country enjoys the highest per capita GDP in the world. Additionally, Luxembourg is a very safe country. Like many European countries, crime rates are low in Luxembourg, with many crimes being petty theft.
Iceland is the tenth most prosperous country on the Legatum index. Iceland ranks third for social capital, which includes relationships, social norms, and civic participation in the country. Iceland is known for its social stability and equality among its people, with little tension between 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 ranks high for safety and security and personal freedom. Iceland is considered one of the safest countries in the world, where police do not carry personal firearms because they do not feel the need to.