THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Poland

Ranked 34th of 149

At a glance

Ranks

34 th on the Legatum
Prosperity Index™

37th
45th
36th
33rd
47th
21st
39th
85th
46th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Poland performs best on Safety & Security and Education and scores lowest on the Social Capital sub-index.

Visit our Rankings table to see how Poland 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.

Poland is an over deliverer of prosperity and its prosperity surplus has increased in the past decade, though it is not as high as in 2014. Its biggest deficit comes in Social Capital which is common in much of the Central & Eastern European region. Poor performance in Personal Freedom has had a considerable effect on Poland’s prosperity gap.

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

Poland’s economy was the only EU economy to avoid a recession after the 2008 financial crisis and although GDP growth has slowed since the crisis, it remains one of the fastest growing economies in Europe. Nevertheless, there has been little change in Poland’s Economic Quality score over the past decade: Poland moved up two ranks to 37th. Poverty and unemployment rates have remained relatively stable since 2007, though unemployment went up slightly to 10.4% following the crisis. Labour force participation has increased by 4.2 percentage points to 67.3% and female labour force participation went up by 4.1 percentage points to 60.5% but both are below the regional average. The Baltic States, for instance, have labour and female labour force participation rates of over 70%.

In the Business Environment sub-index, Poland moves up 12 ranks to 45th following further market liberalisation reforms and the strong development of the private sector. It has attracted significant foreign direct investment given its favourable tax laws and good infrastructure. The cost of electricity has been reduced dramatically over the past decade and it is the cheapest in the EU. However, there are areas for improvement in relation to hiring and firing practices, resolving insolvency, redundancy costs, and getting credit. It is also important to note that Poland’s positive business development varies widely from region to region, something it has in common with other Central and Eastern European states. It is important that smaller cities, not only Warsaw, flourish as good business climates. Poland has overtaken Slovakia in the Business Environment, but still lags behind regional peers such as the Czech Republic, Romania, Estonia, and Latvia.

 Cost of electricity (logged value – higher = worse) in Poland compared to the EU average.
The cost of electricity in Poland has decreased considerably in the past ten years and is the cheapest in the EU.

Poland has moved up ten ranks in the Governance sub-index because of better government effectiveness, a higher rule of law and better regulatory quality. While corruption remains an issue as it does in much of the region, Poland has made considerable progress in tackling corruption in recent years and has overtaken the Czech Republic and Slovakia in this respect. Of concern is voter turnout which at 49.4% is one of the lowest in the region. It remains to be seen whether the surprise win of the conservative Law & Justice Party in the 2015 general elections have an effect on Poland’s performance in the Governance sub-index.

Corruption Perceptions Index (0 – 100, higher = better) in Poland, Slovakia and the Czech Republic.
Anti-corruption efforts in Poland see the country overtake its regional peers. Fewer Poles believe their country to be corrupt today than in 2007.

There has been a notable decline in the Personal Freedom sub-index following the general election victory for the Law & Justice Party. Poland moved down seven ranks to 38th from 2014 to 2016 alone. Within the past year, Poles feel as if their local area is not as good a place for immigrants and ethnic minorities to settle as it was previously. Interestingly, the same deteriorating sentiment has not been reported for the LGBT community. The press remains free and diverse, but a recent Media Law passed by the new government is a cause for concern, which allows the government to appoint the heads of Poland’s public broadcaster and other state-owned outlets. This echoes the recent alarming developments in Hungary’s media landscape. The Prosperity Index reports a modest decrease in press freedom in the past couple of years but it is an area worth looking at in the future.

Poland move up five ranks in the Education sub-index to 33rd. The Prosperity Index sees an increase in those with vocational, secondary, and tertiary education over the past decade. Notably, Poland’s educational quality score (PISA) is above both the OECD and EU averages: it outperforms countries like the US, Denmark, Luxembourg and Sweden. Poland introduced an overhaul of its education system to focus more on core studies and delayed vocational schooling until the age of 16.


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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.