THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

www.li.com

Denmark

Ranked 9th of 149

At a glance

Ranks

9 th on the Legatum
Prosperity Index™

6th
11th
7th
12th
23rd
5th
13th
7th
18th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Denmark performs best on Safety & Security and Economic Quality and scores lowest on the Health sub-index.

Visit our Rankings table to see how Denmark compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Denmark’s delivery of prosperity to its citizens relative to its wealth is exceptional. The country boasts the world’s 6th largest prosperity surplus. The only other European countries with a greater prosperity surplus than Denmark are Finland and the UK.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

Denmark is one of the world’s most prosperous and wealthy countries whose society is supported by robust social welfare programs. Consequently, Danish citizens are among those with the highest satisfaction with living standards in the world, after the Swiss and the Norwegians. This is despite growth having been sluggish in the last decade, as Denmark struggles to recover from the 2008 financial crisis. Unemployment levels still stand at 6.6% compared to 3.4% in 2008, but increased government spending since 2010 has induced a modest economic recovery.

Indeed, ranked 1st in the Economic Quality sub-index in 2007 and 2008, Denmark has not yet managed to climb back to the global top five in 2016. However, an area where Denmark has been showing considerable economic promise has been in the renewable energy sector. A 2012 report from the OECD found that clean tech companies- of which Denmark has become a world leader- have been driving regional economic growth and outperforming other industries during the recent recession.

These clean tech firms will have been encouraged by Denmark’s extremely favourable Business Environment, ranking 11th in 2016. The country’s flexible hiring and dismissal regulations, which are 6th best globally, sustain an efficient labour market. Starting a business also takes fewer procedures than the world average.

Increasing concern for the environment among Danes will also have been strong motivation for the development of clean tech firms. Denmark has made great strides to improve the health of its various ecosystems, which has been reflected in a 22 rank leap in the country’s Natural Environment sub-index, from being ranked 44th in 2007 to 18th in 2016.

Denmark’s performance in the Natural Environment sub-index in 2007 and 2016
Denmark’s Natural Environment score has improved by 15% between 2007 and 2016, seeing it gain 22 ranks in this sub-index.

Considering that agriculture occupies around 60% of Denmark’s total area- the use of pesticides is a major issue facing the country. Pesticide regulation and terrestrial protection, still low by European Standards have become the best amongst the Nordic countries.

Strong efforts have been undertaken to reduce air pollution in Denmark, which is particularly high in urban areas largely because of wood burning stoves. Air pollutions levels have reduced by 63% in the last decade, aided by a tax on nitrogen emissions passed in 2010, and the saving of money for cleaner transport. Air pollution levels should continue to decrease in the coming decade as Denmark has a plan in place to be completely powered by renewable energy by 2050.

Denmark ranks 7th best in the world for Governance. This is unsurprising considering that the nation has the lowest level of corruption globally, and that rule of law and judicial independence rank 2nd and 3rd respectively. However, Governance has been in decline since 2008 where it was once ranked 1st globally. Confidence in the honesty of elections has fallen from 91% to 50% and government confidence from 67% to 58% since 2008. Such decline can be attributed not only to the financial crisis but also to concerns about militant extremism and the refugee crisis, which has placed considerable political strain on Denmark. These factors can account for the increasing popularity of the ‘Danish People’s Party’ whose policies focus on the protection of Danish identity and heritage- with a particular focus on limiting immigration. Even in socially liberal Denmark, populism is on the rise, as immigration has become a much more politicised topic.

Ways to make a change

Click on the Tweets to help make a change in your nation.

Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.

Special Analysis

Special Analysis

OVERALL

Denmark has lost its position as world leader in Governance and Economic Quality since 2007, seeing the country’s overall prosperity slip by three ranks to ninth.

success.png
Areas of Success
Areas of Success

Safety & Security is Denmark’s strongest asset, ranking 5th in 2016 and consistently in the top ten in the past decade. Theft rates have fallen by 25% in the last decade and intentional homicide rates are amongst the lowest in Europe. Economic Quality is a close second, ranking 6th in 2016. Although growth has been sluggish since the 2008 crisis, Denmark still achieves the 3rd best satisfaction with living standards in the world. Notable improvement has come in the Natural Environment sub-index, where Denmark has climbed from 44th to 18th over the past ten years. This is predominantly a result of the greater measures taken to reduce air pollution by 63%, particularly in urban areas, and improve pesticide regulations and terrestrial protection sharply.

change.png
Areas of Little Change
Areas of Little Change

Little movement has been recorded by the Index in Denmark’s two strongest areas of prosperity, Social Capital and Safety & Security. Little movement has been seen also in Personal Freedom, where Denmark ranks 13th. This is despite a significant improvement in the underlying score in this sub-index. Socially liberal Denmark became the first country to allow civil unions for gay couples in 1989. Despite this a number of Denmark’s peers were quicker to legalise same-sex marriage, thus matching and exceeding much of the progress made by Denmark in this sub-index.

improvement.png
Areas of Improvement
Areas of Improvement

Health is Denmark’s worst performing sub-index. Ranked 23rd, Denmark’s health system is lagging behind that of its Nordic peers and has shown little sign of improvement over the last decade. Not only does Denmark have one of the highest prevalences of diabetes in Western Europe but it also shares the challenge of rising obesity with other developed peers- this rate having increased by 9% in the last ten years.