How to measure world prosperity?
The end of the year represents the right time for individuals to look back on what they’ve achieved and what learned along the way in order to set up actions regarding future improvements for the upcoming year. Traditionally, the wishes refer to prosperity, wealth and well-being. Besides individuals, teams and organizations, this principle applies also to countries. Going further, we can even take into consideration the global level of affairs. Have you ever thought about measuring world prosperity?
It is at least challenging to consider dimensions such as opportunity and freedom of the citizens, how citizens can take control of their lives in the context of prosperity calculations that when combined, illustrate the state of the world.
In today’s context, human progress and the way nations can grow represent key elements that highlight national success and people’s options when they choose where they’d like to live in or the country where they’d like to do business in.
Focusing on calculating the world’s best and worst places to live in, The Legatum Institute has recently published the 2015 Prosperity Index that exposes the annual ranking of 142 countries which covers 96% of the world’s population and 99% of global GDP.
What makes this index so special? It is the only global measurement of prosperity that considers both income and well-being. Based on the assumption that prosperity represents more than material wealth, the index comprises not only macroeconomic indicators, such as GDP or GDP per capita, but also indicators that complement or go beyond them, through determinants of the subjective well-being of citizens.
The deciding factors of world prosperity go beyond conventional analysis and are clustered in eight equally weighted sub-indices. You will find below a short preview of the 89 variables that have been standardized.
- $ Capital per worker
- $ Gross domestic savings
- % Unemployment rate
- % Market size
- % Inflation
- # Satisfaction with standard of living
- Entrepreneurship & Opportunity
- $ R&D Expenditure
- $ Business startup costs
- # Mobile phones per household
- # Internet bandwidth
- # Confidence in the judicial system
- # Confidence in elections
- # Confidence in the military
- # Class size
- # Girls to boys enrolment ratio
- # Tertiary education per worker
- # Satisfaction with educational quality
- % Immunization against infectious disease
- # Life expectancy
- $ Health spending per capita
- % Infant mortality
- # Hospital beds
- # Satisfaction with health
- Safety & Security
- # Property theft
- # Refugees and IDPs
- # State-sponsored political violence
- # Express political opinion without fear
- Personal Freedom
- # Tolerance of immigrants
- # Tolerance of ethnic minorities
- # Satisfaction with freedom of choice
- Social Capital
- # Volunteers
- $ Charitable donations
- % Marriage rate
Now that we’ve analyzed the factors that contribute to the calculation of prosperity, let’s have a short look at the findings, especially at the top and bottom of the list.
According to 2015 Prosperity Index, the world’s most prosperous country is Norway. It tops the index for the seventh year running, considered strong for its social capital, education, personal freedoms and health system. Still, it has slipped down for the economic dimension because of the unemployment figures.
The Central African Republic is the lowest ranking country. Some of the variables that have significantly contributed to its position are represented by capital per worker, adequate food and shelter, internet bandwidth, rule of law, immunization against infectious disease and perception of social support.
One of the more sensitive aspects at the moment, measured at a global scale, is represented by the safety and security topic. The report says that the world has become a more dangerous place due to declines in Africa and the Middle East.
Coming back to the idea of calculating prosperity at a global level and its impact, let’s all wish and act for a strong improvement in the upcoming period.
Dear World, have a prosperous year ahead! Prosperous New Year to all of you!