THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Global prosperity inequality is falling as the less prosperous grow faster than the prosperous

The conversation about global inequality is almost always one about the distribution of the world's wealth, but it is not the whole story. What do we see if we expand our view beyond wealth to a broader definition of prosperity?

The Prosperity Index paints a more optimistic picture of the world than the one we see when looking at wealth alone.

Differences in prosperity between countries declined between 2007 and 2016. This decline in inequality was driven by faster prosperity growth in initially less prosperous countries. By growing faster, these countries have narrowed the gap between their level of prosperity and the higher level of prosperity enjoyed by more advanced countries. The outcome is a lower level of global prosperity inequality.

Global prosperity inequality is falling as the less prosperous grow faster than the prosperous
Global prosperity inequality is falling as the less prosperous grow faster than the prosperous

The graph above divides the world according to prosperity growth and the starting level of prosperity in 2007. Unsurprisingly, large gains have been made by less prosperous nations like Togo. However, progress has also been made at the top, with prosperous countries like Germany posting impressive rates of prosperity growth.

The sloping line shows that as you move up the prosperity rankings, more prosperous countries tend to have slower prosperity growth rates than less prosperous ones. It is this 'catch up' that is reducing the inequality of prosperity between countries, as the difference between the prosperity of those at the bottom and those at the top shrinks.

Looking at prosperity rather than wealth alone, we see a new story: an increasingly prosperous world, composed of increasingly equal countries.

Global prosperity inequality is falling as the less prosperous grow faster than the prosperous
Despite conflict marring prosperity growth at the bottom of the index, prosperity has grown faster among the bottom 20 countries than among the top 20