THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Summary

Prosperity is more than just the accumulation of material wealth, it is also the joy of everyday life and the prospect of an even better life in the future. This is true for individuals as well as nations.

How do people flourish? Why are some nations more prosperous than others and how do poorer communities transition from poverty to increasing prosperity?

Over the last ten years the Legatum Institute, through the Legatum Prosperity Index™, has tracked the journey of 149 nations in order to answer these questions. The results explain how and why nations with similar resources do better or worse than their peers and what drives and constrains the creation of a more prosperous society.

Why do we care? We believe that true prosperity is not just for a privileged few, but for everyone. Prosperity is simply the opportunity for every person to discover, fulfil, and share their potential, becoming the best they can be and helping others be the best they can be. It involves both wealth and wellbeing. No person need languish in poverty or in social isolation.

In measuring prosperity, the goal of the Legatum Prosperity Index™ is the transformation of people.

In measuring prosperity, the goal of the Legatum Prosperity Index™ is the transformation of people. We want to know what life is really like for people, identify what is preventing it being better, and remove obstacles to prosperity in order to help all become the best that they can be.

Through the insights generated by ten years of data, the Prosperity Index provides evidence that transformation is possible, and the tools and knowledge to help bring about that change.

Consider the prosperity of Indonesia, that has risen 19 ranks up the Index to 61st over the past decade. It proves just how quickly prosperity can grow when its foundations are well established. A steady six rank improvement in Personal Freedom, firm progress on Governance (up 14 ranks), and a rapidly strengthening society (up 51 ranks in Social Capital) has laid firm foundations on which Indonesian prosperity has flourished.

But just as prosperity can be created, it can also be squandered. Venezuela, home to huge oil reserves has experienced the biggest decline in prosperity over the past decade. Millions of once prosperous Venezuelans are now impoverished thanks to the policies and leadership of Hugo Chavez. Venezuela’s experience offers every nation an important warning that choices have consequence and we must each fight for prosperity.

This year’s report is based on an updated methodology developed over the last 2 years with input from world leading advisers including Nobel Laureate Angus Deaton.

This year’s report is based on an updated methodology developed over the last 2 years with input from world leading advisers including Nobel Laureate Angus Deaton.

Among other changes we have expanded the number of countries to 149 and added a 9th pillar on the natural environment. We encourage you to read about all the improvements in the 2016 Methodology Report.

On behalf of the Prosperity Index team, we commend this 10th edition. Please study it, challenge it, add to it but most of all use it to help create a more prosperous world.

Use it to inform your vote, use it to hold leaders to account, use it as a leader to make better choices, use it to keep media honest, use it to educate children, use it to inspire your family, your friends, and help your community be the best they can be.

Join us as we help create prosperity for everyone, everywhere.

“For many years the Legatum Prosperity Index has provided an innovative and robust metric with which to compare prosperity, including but extending beyond standard income measures, across countries and over time. The methodology behind the index is robust, transparent, and accessible, while the statistician seeking more detail can delve deeper into the index construction. At a time of world-wide interest in assessing human wellbeing in ways that extend beyond standard GNP based metrics, the Index is a best-in-class example of how to combine a range of important variables into a metric that is credible and accessible to policymakers and the lay reader, as well as academics.”


Carol Graham
Legatum Fellow; adviser to the Prosperity Index; and Senior Fellow at the Brookings Institution


About Legatum Institute

The Legatum Institute is an international think tank and educational charity focused on understanding, measuring, and explaining the journey from poverty to prosperity for individuals, communities and nations. We believe true prosperity is as much about wellbeing as it is wealth, if all people are to flourish.

In addition to the Legatum Prosperity Index, our signature publication, we run several core research programmes in which we seek to understand what drives and restrains national success and individual flourishing.

The Legatum Institute is based in London and is an independent charity within the Legatum Group, a private investment group with a 30-year heritage of global investment in businesses and programmes that promote sustainable human development.