Key Findings | Investigating Prosperity | Leaders & Laggards | Principles of Prosperity | A Focus on Principles

The inquiry into the roots of prosperity has been on going for hundreds of years. While our understanding of the determinants of both material wealth and life satisfaction has increased by leaps and bounds, much remains unknown. We intend the Legatum Prosperity Index to be an ongoing enterprise that reflects our evolving understanding and is to be revised as this develops.

This analysis, especially the rankings of countries, should not be read as a precise evaluation of countries’ relative success or failure, but rather as an effort to offer insights into the elements which contribute to creating fulfilled lives and prosperous societies. Although our analytical techniques are rooted in statistical research on historical data, any analysis stretching across so many countries and years is not undertaken for the purposes of precision so much as to elucidate trends and principles. We thus hope that the study provides some useful insight as to where, in principle, we can choose to do better in enhancing the material wealth and life satisfaction which define our prosperity.

Researchers, policymakers and the curious are welcome to examine the results for their countries and others on our website, www. prosperity.org. A full set of data and analysis tools are available for all 50 countries in the Index, and many more besides. (We have Life Satisfaction results for 68 countries, and Material Wealth results for 98 countries, including many in Africa, where increasing material prosperity is a critical priority.) These results are intended to be used as a diagnostic tool, to identify areas where focused effort may reap significant rewards. However, knowing that a country has a relatively low level of invested capital is not the same as knowing the cause of the deficiency or how to remedy this deficiency, and the solutions will vary from country to country depending on context. While increasing one factor may, on average across countries, produce a jump in life satisfaction, the exact effect in each country will again depend on its cultural, legal, political, religious, and economic context.

We hope, however, that our analysis of the historical data, the basic prosperity principles we have identified, and the results for individual countries will prove useful to those who are concerned about the prosperity of their own country and of other countries around the world. Notably, at the present moment, no country scores well in every category.

For rich countries we see a significant challenge of moving from a historical focus on economic growth to a broader focus on the human and social factors that have a stronger impact than income on the life satisfaction of their citizens. Ironically, the response to this challenge cannot be government-led, but must be citizen-chosen, because so many of these issues are a matter of individual choice. The statistical evidence on the importance of freedom of choice reveals that attempts to impose “correct” social choices on individuals will paradoxically create, on balance, highly detrimental effects on life satisfaction. Thus, unsurprisingly, the two countries with the highest Life Satisfaction scores (New Zealand and the United States) have notably free societies with limited government intervention, compared to peer countries.

For poor countries we see an equally great challenge of maintaining traditional social strengths while remedying clear economic deficiencies that are in many cases at least partially the result of historical influences or geographic provenance. If the 2007 Prosperity Index provides useful insights to the global community in how to help each other fulfil our potential, then it will have served its purpose. We may inherit our history, but we can choose our future.