The Legatum Prosperity Index is the world’s only global assessment of wealth and wellbeing; unlike other studies that rank countries by actual levels of wealth, life satisfaction or development, the Prosperity Index produces rankings based upon the very foundations of prosperity those factors that will help drive economic growth and produce happy citizens over the long term.
Legatum recently completed its 2010 Prosperity Index, which ranks 110 countries, covering 90 percent of the world’s population.
To build its index Legatum gathers data from 12 sources the Gallup polling group, the Heritage Foundation and the World Economic Forum. Each country is ranked on 89 variables sorted into eight subsections: economy, entrepreneurship, governance, education, health, safety, personal freedom and social capital.
In terms of prosperity, the Americas are highly diverse with prosperity rankings ranging from Canada at seventh place to Nicaragua at 87th. The region comprises two of the world’s wealthiest economies – the United States and Canada, followed by a series of unevenly developed middle and low-income countries.
Latin American countries face a diverse spectrum of challenges and each country has a unique path towards prosperity. However, in general, most countries suffer from weak governance that brings down their levels of prosperity. Conversely, most Latin Americans enjoy relatively high levels of personal freedom and the region’s growing economies are strengthening the levels of prosperity (see the difference between the green and red dots in the graph below). Personal freedom in Uruguay is almost as high as levels reported in the United States.
Most people would intuitively agree that «prosperity» is not just money but also quality of life. The Prosperity Index is the first global index that provides an empirical basis for this belief. It finds that successful countries enjoy a «virtuous cycle» of economic liberty and growth, political freedom and good governance, and enterprising and happy citizens, which mutually reinforce each other on the path to prosperity.