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Our report on How Nations Succeed was motivated by our desire to understand what specific actions have helped to sow the seeds of prosperity in developing countries. The recommendations are designed to provide leaders with a comprehensive framework for national transformation that is proven and effective.

New framework for national transformation demonstrates vital role of leadership

The Legatum Institute has published a new report outlining a framework for national transformation designed to help leaders as they make decisions to guide their nation on a development pathway.

Based on an in-depth examination of the journeys of 10 nations with contrasting development trajectories over six decades, the How Nations Succeed report outlines the building blocks of institutional, economic, and social wellbeing and provides insights on how development priorities can best be sequenced to build lasting and sustainable prosperity.

Commenting on the report’s findings, CEO of the Legatum Institute Baroness Philippa Stroud said: “For over a decade our global Prosperity Index has offered unique insights into the holistic nature of prosperity and what drives progress in nations around the world. While the focus is often on the highest performing countries in the Index, it is arguably the gradual yet steady progress of numerous developing nations that has been most encouraging.

“Our new report on How Nations Succeed was motivated by our desire to understand what specific actions have helped to sow the seeds of prosperity in these countries. The stories of the 10 nations we have studied offer valuable insights into what works and, perhaps equally important, what does not. The resulting recommendations are designed to provide leaders with a comprehensive framework for national transformation that is proven and effective.

“The research makes clear that leadership can make all the difference. An environment that enables prosperity is the result of successive leaders’ careful and conscious development of institutional, economic, and social wellbeing. The case studies we have examined demonstrate that leaders’ determination to do what is right – ensuring the integrity of the rule of law by subjecting themselves to it, establishing a smooth transfer of power by leaving office voluntarily, and enabling sustained economic growth by confronting the vested interests that render nations uncompetitive – has proven pivotal in creating a robust foundation for lasting prosperity. Leaders must have more than just political acumen and administrative competence; they must be men and women of vision and character, committed to placing the long-term development of their nation above short-term political imperatives.

“The countries we have highlighted in the report (Botswana, Colombia, the Dominican Republic, Indonesia, Mauritius, and Sri Lanka) provide a source of inspiration that, with determination, people in all nations can fulfil their unique potential. We hope that leaders around the world use the framework to create their country’s own pathway to prosperity. While delivering prosperity is inevitably a daunting undertaking and progress is often incremental and unspectacular, our work shows that not only is it possible, but it is within reach of each and every nation.”

The Legatum Institute’s framework for national transformation:

  • Forge a strong social contract
      • Establish statehood: promote a national identity, maintain control over key parts of your territory, and maintain internal order without resorting to violence.
      • Cultivate legitimacy: establish formal and informal executive constraints, champion the rule of law, and commit to the peaceful transfer of power.
      • Govern competently: adopt a pragmatic and inclusive approach to national development and build a competent administration.
  • Build an open economy
      • Develop macroeconomic resilience: raise sufficient revenues, prioritise fiscal sustainability, and deliver monetary stability.
      • Build a domestic asset base: protect property rights, cultivate a domestic finance sector, and encourage foreign investment, capabilities, and technologies.
      • Promote trade and commerce: enable competition, make innovative use of export processing zones, and prioritise international trade.
  • Invest in human capital
      • Provide effective healthcare: build institutional capacity and quality and improve access to healthcare.
      • Target universal education: create essential capacity and quality and maximise access to primary, secondary, and tertiary education.