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SUB-INDEXES
The 2010 Prosperity Index consists of eight sub-indexes:
Economy 42
Governance 46
Education 48
Health 50
Personal Freedom 54
Social Capital 56
ECONOMY
Ranking Distribution for Economy
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
Stable and growing economies increase per capita income investment are essential to boosting per capital income.
and promote the overall wellbeing of its citizens. The Positive expectations about the future of the economy
Economy sub-index measures countries’ performances in and satisfaction with living standards also make an
four areas that are essential to promoting prosperity: important contribution to the overall wellbeing of a
macroeconomic policies, economic satisfaction and country’s citizens. While our research shows that
expectations, foundation for growth, and financial sector increased economic strength over time is generally good
efficiency. As illustrated in the chart below, the variables for everyone, it also finds that rapid increases in GDP are
in the sub-index are categorised into these areas. related to lower levels of happiness in a society as people
grapple with the dislocations that often accompany such
The sub-index demonstrates that outcomes of sound growth.
macroeconomic policies, such as robust domestic savings
rates, low rates of inflation and unemployment, and an
efficient financial sector have a positive impact on both
average levels of income and wellbeing.
It also shows that investing in physical capital per worker,
innovative high-tech exports, and a competitive economy
that facilitates domestic demand and attracts foreign
INCOME WELLBEING
Macroeconomic Policies
Gross Domestic Savings Inflation
Unemployment Rate Gross Domestic Savings
Inflation Employment Status
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
42
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 Norway 3.091 56 Venezuela 0.083 5
2 Switzerland 2.986 57 Peru 0.077
3 Netherlands 2.923 58 Trinidad and Tobago 0.049
4 Denmark 2.873 59 Estonia -0.077
5 Canada 2.651 60 Ecuador -0.110
6 Singapore 2.605 61 Belize -0.167
7 Sweden 2.538 62 Vietnam -0.188
8 Australia 2.524 63 Bolivia -0.188 Norway
3
9 Finland 2.457 64 Russia -0.241 (1), 3.091
10 Hong Kong 2.333 65 Guatemala -0.316
11 Japan 2.301 66 Bangladesh -0.341
12 Austria 2.281 67 Romania -0.358
13 Germany 2.228 68 Namibia -0.389
14 United States 2.012 69 Turkey -0.509
15 South Korea 1.970 70 Lebanon -0.519
16 Belgium 1.950 71 Syria -0.539 1
17 New Zealand 1.942 72 Egypt -0.617
18 United Kingdom 1.842 73 Botswana -0.664
19 France 1.829 74 Belarus -0.667 Colombia
20 Kuwait 1.812 75 Bulgaria -0.696 0
43
THE EIGHT SUB-INDEXES
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
A strong entrepreneurial climate in which citizens can pursue development across socioeconomic groups and whether
new ideas and opportunities for improving their lives leads or not citizens believe hard work pays off in the future.
to higher levels of income and wellbeing. Specifically, the
Entrepreneurship & Opportunity (E&O) sub-index measures The E&O sub-index builds upon scholarship that shows
countries’ performance in three areas: entrepreneurial how entrepreneurship drives innovation and leads to
environment, innovative activity, and access to opportunity. economic growth. It also uses research demonstrating the
As illustrated in the chart below, the variables in the sub- positive impact of an individual realising his or her
index are categorised into these areas. entrepreneurial potential. When a country increases the
likelihood that entrepreneurial activity will pay off, and
Such factors as low costs to starting a business and public when individuals experience the satisfaction that comes
perception of a good entrepreneurial environment are from earning their success, a society’s prosperity increases
important to improving citizens’ economic prospects and overall.
their overall wellbeing. The sub-index also assesses a
country’s ability to commercialise innovation, as well as
the Information and Communication Technology (ICT)
infrastructure that exists to enable productive commercial
endeavours. Lastly, it captures elements of access to
opportunity by tracking the unevenness of economic
INCOME WELLBEING
Entrepreneurial Environment
Innovative Activity
R&D Expenditure
Royalty Receipts
ICT Exports
Access to Opportunity
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
44
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 Denmark 3.700 56 Russia -0.101 5
2 Sweden 3.601 57 Colombia -0.166
3 United States 3.448 58 Mongolia -0.250
4 Finland 3.411 59 Mexico -0.301
5 United Kingdom 3.309 60 China -0.408
Denmark
6 Norway 3.235 61 Macedonia -0.607
(1), 3.700
7 Ireland 3.203 62 Dominican Republic -0.649
8 Singapore 3.185 63 Moldova -0.709
3
9 Iceland 3.181 64 Botswana -0.724
10 Canada 3.157 65 Venezuela -0.755
11 Switzerland 3.144 66 Peru -0.794
12 Netherlands 3.078 67 Belarus -0.842
13 Australia 3.051 68 Morocco -0.857
14 New Zealand 2.920 69 Philippines -0.859
15 Germany 2.803 70 Jordan -0.868
16 Austria 2.525 71 Guatemala -0.950 1
17 Hong Kong 2.375 72 Kazakhstan -0.959
18 South Korea 2.322 73 Ukraine -0.978
19 Japan 2.204 74 Paraguay -0.996
45
THE EIGHT SUB-INDEXES
GOVERNANCE
Ranking Distribution for Governance
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
Well-governed societies enjoy national economic growth addresses societal struggles with the environment and
and citizen wellbeing. The Governance sub-index poverty.
measures countries’ performance in three areas: effective
and accountable government, fair elections and political Academic research has found that in general, political
participation, and rule of law. As illustrated in the chart freedom, strength of institutions, and regulatory quality
below, the variables in the sub-index are categorised into are significant contributors to economic growth. Effective,
these areas. fair, and accountable governments also increase public
confidence, leading to higher levels of life satisfaction
Stable and democratic governing institutions protect political among citizens. Likewise, the opportunity to have a voice
and economic liberty and create an environment in their government is correlated with happier citizens.
of civic participation, leading to higher levels of income and
wellbeing. The Governance sub-index measures levels of
competition and corruption in the government, and citizens’
confidence in elections, the judicial system, and the military.
The sub-index shows that citizens prefer governments that
are stable and accountable. Public wellbeing is also related
to people’s perceptions of how well the government
INCOME WELLBEING
Rule of Law
Rule of Law Confidence in the Judicial System
Regulation Regulation
Rule of Law
Confidence in Military
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
46
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 Switzerland 4.302 56 Ghana -0.387 5
2 Denmark 3.849 57 Bulgaria -0.397
3 United States 3.790 58 Rwanda -0.522 Switzerland
4 New Zealand 3.721 59 Colombia -0.528 (1), 4.302
5 Canada 3.699 60 Brazil -0.555
6 Sweden 3.610 61 El Salvador -0.578
7 Finland 3.586 62 Vietnam -0.600
8 Australia 3.576 63 Morocco -0.604
3
9 United Kingdom 3.534 64 China -0.695
10 Netherlands 3.359 65 Romania -0.719
11 Singapore 3.269 66 Mexico -0.727
12 Norway 3.208 67 Jamaica -0.886
13 Austria 3.205 68 Zambia -0.988
14 Ireland 3.147 69 Peru -1.122
15 Germany 2.685 70 Indonesia -1.155
16 Belgium 2.669 71 Macedonia -1.184 1
17 Iceland 2.527 72 Cambodia -1.224
47
THE EIGHT SUB-INDEXES
EDUCATION
Ranking Distribution for Education
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
Education is a building block for prosperous societies. The education in a given country. Global data on education is
Education sub-index measures countries’ performance in limited and, therefore, the Education sub-index uses pupil
three areas: access to education, quality of education, and to teacher ratio, as well as measures of citizens’
human capital. As illustrated in the chart below, the perception of education, to assess quality.
variables in the sub-index are categorised into these areas.
This sub-index is built on research on economic growth
The Education sub-index demonstrates how access to that has found human capital to be an engine for growth,
education, as measured by levels of educational enrolment making a case for the non-diminishing effect of education
rates that are equal for both girls and boys, allows citizens on rising GDP levels. While the relationship between
to develop their potential and contribute productively to higher levels of education and wellbeing is less clear-cut,
their society. In addition, it shows that human capital research shows that basic education enhances people’s
stock, which is measured by the average levels of chances in increasing their satisfaction with life.
education in the workforce, is essential for promoting
private sector research and development as well as
producing useful knowledge for a society. Because of the
importance of citizen’s own perceptions of the educational
opportunity available to them, the sub-index uses both
objective and subjective variables to assess the quality of
INCOME WELLBEING
Access to Education
Gross Secondary Enrolment Gross Secondary Enrolment
Net Primary Enrolment Gross Tertiary Enrolment
Girls to Boys Enrolment Ratio Net Primary Enrolment
Gross Tertiary Enrolment Girls to Boys Enrolment Ratio
Quality of Education
Human Capital
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
48
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 New Zealand 3.105 56 Sri Lanka 0.218 5
2 Australia 3.043 57 Iran 0.184
3 Finland 3.036 58 Costa Rica 0.178
4 Norway 2.771 59 China 0.130
5 Denmark 2.748 60 Philippines 0.090
6 Iceland 2.535 61 Bolivia 0.074
7 Taiwan 2.414 62 Peru 0.031 New Zealand
8 South Korea 2.397 63 Egypt -0.012 3 (1), 3.105
9 United States 2.395 64 Uzbekistan -0.027
10 Sweden 2.389 65 Saudi Arabia -0.048
11 Spain 2.332 66 Moldova -0.050
12 Canada 2.323 67 Trinidad and Tobago -0.083
13 Netherlands 2.076 68 Colombia -0.136
14 France 2.060 69 Mexico -0.137
15 Ireland 2.054 70 Indonesia -0.197
16 Slovenia 1.984 71 Macedonia -0.205 1
17 Austria 1.898 72 Algeria -0.280
18 Belgium 1.870 73 Ecuador -0.315 Kuwait
(55), 0.295
19 Italy 1.849 74 Syria -0.373
0
20 Portugal 1.815 75 Brazil -0.388
49
THE EIGHT SUB-INDEXES
HEALTH
Ranking Distribution for Health
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
A strong healthcare infrastructure in which citizens are able of satisfaction with personal health and the health effects
to enjoy good physical and mental health leads to higher of environmental factors such as water and air quality, and
levels of income and wellbeing. The Health sub-index even environmental beauty.
measures countries’ performance in three areas: basic
health outcomes, health infrastructure and preventative Self-reported wellbeing and self-reported health are
care, and physical and mental health satisfaction. As commonly found by researchers to be strongly and
illustrated in the chart below, the variables in the sub-index significantly correlated to a overall society’s health, as this
are categorised into these areas. fosters strong human capital that leads to productive
aggregate economic output. Mentally and physically
The Health sub-index assesses countries by outcomes that healthy citizens are the bedrock of a productive workforce,
are made possible by a strong health infrastructure, such which in turn leads to higher levels of income per capita.
as rates of immunisation against diseases and public health
expenditure. Countries are also assessed on outcomes
such as life expectancy, rates of infant mortality and
undernourishment. The sub-index also includes measures
INCOME WELLBEING
Basic Health Outcomes
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
50
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 United States 3.103 56 Kazakhstan 0.403 5
2 Iceland 2.750 57 Turkey 0.326
3 Switzerland 2.730 58 Belize 0.312
4 Norway 2.720 59 Uzbekistan 0.258
5 Japan 2.674 60 Iran 0.255
6 Germany 2.601 61 Trinidad and Tobago 0.216
7 France 2.484 62 Colombia 0.200
8 Austria 2.418 63 Panama 0.134 United States
3
9 Sweden 2.359 64 Thailand 0.094 (1), 3.103
51
THE EIGHT SUB-INDEXES
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
Societies plagued by threats to national security and persecution, and feeling safe walking alone at night, are
personal safety cannot foster growth in average levels of positively correlated with higher levels of wellbeing.
income or wellbeing. The Safety and Security sub-index
measures countries’ performance in two areas: national When people and basic institutions are unsafe and
security and personal safety. As illustrated in the chart unstable, then capital, investment, and people begin to
below, the variables in the sub-index are categorised into flee. Scholars have shown that organised political violence
these areas. such as riots, coups, and civil war, as well as general crime
and mistrust stemming from a lack of social cohesion,
Stable economic environments are necessary for attracting impede economic growth. In addition, conditions that
investment and sustaining economic growth. In addition, produce fear and uncertainty negatively affect life
when citizens worry about their personal safety or whether satisfaction.
they will suffer for freely expressing their opinions, their
overall wellbeing is diminished. The Safety and Security
sub-index combines objective measures of security with
subjective survey responses about personal safety. Stability
resulting from national security, for example, is a key
element in increasing per capita GDP in a country. Similarly,
the ability to express political opinions without fear of
INCOME WELLBEING
National Security
Group Grievances Group Grievances
Refugees and IDPs Demographic Instability
State-Sponsored Political Violence State-Sponsored Political Violence
Human Flight
Refugees and IDPs
Civil War
Personal Safety
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
52
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 Iceland 3.940 56 Indonesia -0.187 5
2 Norway 3.843 57 Belize -0.295
3 Finland 3.644 58 Ukraine -0.346
4 Ireland 3.598 59 Botswana -0.350
5 Singapore 3.439 60 Belarus -0.409 Iceland
6 Denmark 3.202 61 Uzbekistan -0.467 (1), 3.940
53
THE EIGHT SUB-INDEXES
PERSONAL FREEDOM
Ranking Distribution for Personal Freedom
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
When citizens enjoy their rights to expression, belief, There is also a strong link between the levels of tolerance
organisation, and personal autonomy in a society within a society for ethnic, cultural, and religious diversity,
welcoming of diversity, their country enjoys higher levels and the overall satisfaction people enjoy within that
of income and social wellbeing. The Personal Freedom society.
sub-index measures countries’ performance in two areas:
individual freedom and social tolerance. As illustrated in Societies that strengthen civil rights and freedoms through
the chart below, the variables in the sub-index are democratisation, have been shown to experience increases
categorised into these areas. in levels of satisfaction among their citizens. When
citizens’ personal liberties are protected, a nation also
The Personal Freedom sub-index assesses the effects of enjoys higher levels of economic growth.
freedom of choice, expression, belief, and movement on a
country’s per capital GDP and the subjective wellbeing of
its citizens. It also assesses how the levels of tolerance for
both minorities and immigrants affect countries’ economic
growth and citizen satisfaction. A strong empirical link
exists between individuals’ freedom to choose what to do,
where to go, what to believe, and overall life satisfaction.
INCOME WELLBEING
Individual Freedom
Civil Liberty and Satisfaction with Freedom of Choice
Free Choice Civil Liberties
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
54
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 Canada 3.789 56 Philippines -0.046 5
2 Norway 3.656 57 Colombia -0.145
3 New Zealand 3.607 58 El Salvador -0.167
4 Australia 3.601 59 Paraguay -0.196
5 Sweden 3.580 60 Ecuador -0.206 Canada
6 Denmark 3.443 61 Uzbekistan -0.250 (1), 3.789
55
THE EIGHT SUB-INDEXES
SOCIAL CAPITAL
Ranking Distribution for Social Capital
Strong ranking countries (Top 30) Average ranking countries (Middle 50) Low ranking countries (Bottom 30) Insufficient data
Social networks and the cohesion that a society Empirical studies on the impact of social capital have
experiences when people trust one another have a direct shown that citizen wellbeing is improved through social
effect on the prosperity of a country. The Social Capital trust, family and community ties, and membership within
sub-index measures countries’ performances in two areas: civic groups. Religious communities are also an important
social cohesion and engagement, as well as community element in the creation of social capital. And societies
and family networks. As illustrated in the chart below, the with lower levels of social capital have been shown to
variables in the sub-index are categorised into these areas. experience lower levels of economic growth. The use of
the term “capital” in “social capital” reflects an important
This sub-index assesses how factors like volunteering, reality: social networks are an asset that produces
helping strangers, and donating to charitable organisations economic and wellbeing returns.
impacts the economic and life satisfaction of the populace
as a whole. The sub-index also evaluates the levels of trust
in a society and the manner in which citizens believe they
can rely on others, and it assesses how marriage and
religiosity provide support networks that improve
wellbeing.
INCOME WELLBEING
Societal Cohesion and Engagement
Formal Volunteering Trust in Others
Helping Strangers Donations
Donations Formal Volunteering
Helping Strangers
Indicates a variable that is included in both income and wellbeing regressions. Indicates a variable that is included in only one regression.
Variables have been divided into different categories within each sub-index. Variables are ordered from largest to smallest within each category. Income and wellbeing bar sizes are
not comparable due to differences in scale
56
Ranking Country Country Ranking Country Country Distribution of
Score Score Country Scores
1 Norway 4.473 56 Brazil -0.181 5
2 Denmark 4.162 57 Mali -0.201
3 New Zealand 4.030 58 Tanzania -0.209 Norway
(1), 4.473
4 Australia 3.729 59 South Korea -0.246
5 Netherlands 3.642 60 Botswana -0.325
6 Switzerland 3.604 61 Paraguay -0.366
7 Finland 3.419 62 Colombia -0.380
8 Canada 3.285 63 Portugal -0.385
3
9 United Kingdom 3.043 64 Chile -0.396
10 Ireland 2.860 65 Uganda -0.464
11 Sweden 2.844 66 Dominican Republic -0.465
12 United States 2.757 67 Senegal -0.466
13 Morocco 2.526 68 Vietnam -0.467
14 Iceland 2.495 69 Tunisia -0.475
15 Austria 2.446 70 Namibia -0.484
16 Germany 1.966 71 South Africa -0.532 1
17 Israel 1.775 72 Trinidad and Tobago -0.570
18 Saudi Arabia 1.530 73 Ukraine -0.582
19 Belgium 1.515 74 Algeria -0.605
57