THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Why do some people think bad governments are good?

The Prosperity Index is unique in its combination of objective and subjective data. The first is factual, the second based on survey respondents' perceptions.

For the most part, subjective data align with objective data. Interestingly, however, there are cases where subjective and objective data diverge - that is, where there is a disconnect between reality and people's perceptions of it.

 Why do some people think bad governments are good?
Why do some people think bad governments are good?

One such example is the relationship between survey responses on people's confidence in their national government and expert-based objective assessments of government effectiveness. We would expect there to be a positive relationship between these two variables-that is, for people to have more confidence in their government the more effective it is. In some instances, there is no such relationship. In some countries, such as Egypt and Bangladesh, people have a high degree of confidence in their government despite it being ineffective; in others, such as Austria and Iceland, people have little confidence in their government despite it being highly effective.

This is in part due to the variety of governance across countries. In more autocratic countries, people may feel uneasy about expressing their true views on their government, or they might have a limited sense of alternative forms of government, ones that have the potential to be more effective.

Whatever the reason for the disconnect between subjective and objective data, as exemplified in the government effectiveness case, the phenomenon raises an important point. Prosperity has both subjective and objective components, and the fact that they sometimes diverge makes it important to measure both.