THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Netherlands

Ranked 7th of 149

At a glance

Ranks

7 th on the Legatum
Prosperity Index™

2nd
14th
4th
2nd
5th
12th
7th
13th
36th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Netherlands performs best on Education and Economic Quality and scores lowest on the Natural Environment sub-index.

Visit our Rankings table to see how Netherlands 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.

The Netherlands’ delivery of prosperity relative to its wealth is exceptional and has remained relatively stable over the past decade. The country enjoys the world’s 9th largest prosperity surplus, with Finland, Denmark, and the United Kingdom as the only European countries ahead of it.

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

Despite a four rank fall in prosperity since 2007 from 3rd place to 7th, the Netherlands remains a very prosperous nation. It has consistently ranked in the top ten for overall prosperity over the last decade and is one of the countries which delivers the most prosperity relative to its wealth in the world.

The Netherlands’ has the 4th best governance system in the world, with strong rule of law, judicial independence and the 6th best government effectiveness in the world. Whilst it has fallen four places since 2007, the Netherlands is still the world’s seventh freest country. In many ways, the country has grown a better place to live, with positive changes seen in health and education, crime rates and protection of the natural environment.

Over the last ten years, the Netherlands has risen four ranks to 5th in Health. With the fourth lowest rate in Europe after Switzerland, Denmark and Austria, obesity is not a challenge that the Netherlands has been tackling to the same extent as other developed peers. Rising satisfaction among the Dutch with their personal health has been recorded and the Netherlands is the country in Europe where most respondents claim to be feeling joy on a daily basis.

A focus on ensuring quality schooling combined with teaching methods that stimulate practical engagement and the imagination are behind the Dutch educational success. With 82% of respondents satisfied with the Dutch education system and more than 87% of people feeling that children have the opportunity to learn and grow every day, it comes of no surprise that the Netherlands ranks second overall in the Education sub-index. Opportunities are expanding at higher levels with tertiary education per worker having increased by 14% since 2007 – all the while maintaining one of the ten highest quality education systems in the world.

Homicide and theft rates have fallen quite markedly since 2007, with a 15% and 8% decline in each respectively. However, declining availability of housing due to rising house prices and the increasing threat from terrorism is exerting pressure on the Safety and Security sub-index, which has dropped from 6th in 2007 to 12th in 2016.

As one of the world’s most densely populated countries and with a quarter of its area under sea-level, the Netherlands ranks amongst the worst in Europe in Natural Environment. Yet, over the last ten years, the country has risen a staggering 37 ranks in this sub-index from 73rd to 36th. Through a series of national and local measures which have included investing in soot filters, infrastructure, urban development, and rerouting heavy traffic outside of cities - levels of air pollution have declined by 45% since 2007. Additionally, terrestrial protection has increased by 60% since 2007, and pesticide regulations are now amongst the best in Western Europe.

Despite all these achievements, the Netherlands’ prosperity ranking has experienced a slight decline. Much of the decline is attributable to the Social Capital sub-index which has dropped sharply from 3rd in 2009 to 13th in 2016. This is predominantly the result of declining participation in civic and charitable activities and lower trust among certain social groups. For instance, since 2009, 30% of respondents feel less comfortable voicing their opinion to a public official and voter turnout is down 7%. Involvement in volunteering activities dropped by 15% and informal financial help among households has reduced by a drastic 31%. Simultaneously social religious restrictions in the nation have increased along with a 4% decline in immigration tolerance.

The Netherlands’ prosperity ranking has experienced a slight decline. Much of the decline is attributable to the Social Capital sub-index which has dropped sharply from 3rd in 2009 to 13th in 2016.
The Netherlands’ prosperity ranking has experienced a slight decline. Much of the decline is attributable to the Social Capital sub-index which has dropped sharply from 3rd in 2009 to 13th in 2016.

This reflects a larger trend occurring in Western Europe, such as in France and Austria, which has been amplified by the refugee crisis and given rise to populism. Geert Wilders and his ‘Party for Freedom’ is one of the best known of these new movements, becoming the third largest party in the Netherlands in the 2010 parliamentary elections. Despite high prosperity levels, declining social cohesion is a sign of emerging societal problems which need to be addressed by the Dutch to avoid further decline in prosperity.


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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

The Netherlands is a stable and extremely prosperous country which boasts a strong education and healthcare system. A decline in Social Capital is putting future prosperity at risk as underlying societal disparities are revealed.

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Areas of Success
Areas of Success

Education is one of the Netherland’s strongest assets, ranking 2nd in 2016, and consistently in the top five in the last decade. Here education quality is among the global top ten and 82% of the population is satisfied with the Dutch education system. Impressive performance has occurred in the Health sub-index, which ranks 5th. The Netherlands is the nation where most citizens experience joy on a daily basis in the world, and there has been rising satisfaction with health among the population. Notable improvement has come in the Natural Environment sub-index, where the Netherlands has climbed from 73rd to 36th over the last ten years. Air pollution has been reduced by 45% and terrestrial protection has increased by an impressive 60% since 2007.

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Areas of Little Change
Areas of Little Change

Little movement has been recorded by the Index in the Netherlands’ strongest area along with education: Economic Quality. In the last decade, it has maintained a stable position in the global top three despite a decline in its absolute score since 2009. This decline is a symptom of the 2008 financial crisis, causing unemployment rates to soar to 6.9% and growth rates to contract by 0.72 percentage points to 0.19% in 2016.

Yet, such decline was average relative to that of its European peers and is offset by high achievements in its anti-monopoly policy and export diversification index, both ranking 2nd globally in 2016. With its export quality index additionally ranking 3rd in the world, the Netherlands maintains an open and competitive economy that benefits from openness to global trade and investment. Although impressively ranked 2nd, the Netherlands’ needs to ensure that such stability in the Economic Quality sub-index not only ensues but is also matched with an improvement in its real score to avoid future prosperity decline.

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Areas of Improvement
Areas of Improvement

Surprisingly for such a socially liberal and egalitarian society, the largest absolute decline has come in the Social Capital sub-index, where the Netherlands has fallen from 3rd to 13th since 2009. This is predominantly the result of declining participation in civic and charitable activities. Since 2009, 30% of respondents feel less comfortable voicing their opinion to a public official, donations have fallen by 14% and involvement in volunteering activities dropped by 15%. This reflects a larger trend occurring in Europe which has been amplified by the refugee crisis and given rise to populism.