2008 Legatum Prosperity Index™

The 2008 Legatum Prosperity Index is the result of an investigation into the various factors that promote prosperity in nations. Recent research advances have made it possible to compare not only the material wealth but also the life satisfaction of people in countries worldwide.

A report for the Prosperity Index programme

Published 5 Nov 2008

The Prosperity Index is unique in three ways. First, it takes a holistic view of prosperity, encompassing both material wealth and life satisfaction. Second, it assesses the drivers and causes of prosperity, rather than measuring outcomes. Third, it includes factors that relate to government policy and to individual citizens.

Constructing the Index

  • The 2008 Legatum Prosperity Index is the result of an investigation into the various factors that promote prosperity in nations. Recent research advances have made it possible to compare not only the material wealth but also the life satisfaction of people in countries worldwide.

Accordingly, we have defined national prosperity as the holistic combination of both of these factors.

  • The overall Index scores and rankings are based on a weighted combination of indicators that reflect Economic Competitiveness and Comparative Liveability. That is to say, the Index does not rank countries according to which have the most material wealth or the highest levels of happiness at a given time. Rather, it is an index of drivers, which means that countries are ranked by how well they are doing at fostering economic growth and improved quality of life.

In other words, how well are nations promoting the practices, habits, policies, and institutions that create enduring prosperity?

  • The indicators that comprise the Index were identified and weighted based on statistical analysis, using 40 years of historical data on economic growth in more than 50 countries, and life satisfaction survey data for more than 100 countries.
  • The Index combines 22 key indicators and 44 sub-indicators in order to rank more than 100 countries, based on the degree to which the actions of their people and governments drive or restrain the creation of holistic national prosperity, relative to the prosperity of other countries.
  • The Index is presented in a set of publications. This book summarises the Index results and provides our interpretation of the meaning of the findings. Separately, the Prosperity Index Report describes the methodology and indicators in detail, profiles each of the countries covered in the Index, and presents research and policy papers on key topics in prosperity.

For readers interested in more background or in conducting their own investigations, the Technical Appendix in the Report describes the research methodology in detail. All these publications, together with an extensive set of interactive data analysis tools, are available at

www.prosperity.com

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2008 Legatum Prosperity Index™

Nov 2008

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