Klein's Commentary

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Despite Global Slowdown, Prosperity on the Rise

The Legatum Institute, an “independent, non-partisan, public policy organization” based in London came out with their annual Prosperity Index this week. Among the key findings in an analysis of 142 countries around the world: From 2009 to 2012 prosperity* rose in every region despite the global economic downturn. Central Asia and Southeast Asia top the charts with index scores rising approximately half a point followed closely by Sub-Saharan Africa and East Asia. Unsurprisingly the U.S., Asia Pacific (including Japan and South Korea) and Europe round out the bottom. Other findings include:

  • Prosperity may not be growing at the highest rates in North America, Europe and the Asia Pacific writ large, but advanced economies in these regions still dominate the upper echelons of overall rankings  ( 40 out of the top 50).
  • However, the U.S. fell to #12 overall and out of the top ten for the first time with a lackluster showing in Economy (#20) and Safety/Security (#27) sub-indices. Of particular concern “Fewer US citizens agree that working hard results in success.”
  • A country on the move, Indonesia jumped 26 spots since 2009 finishing 63rd overall this year. China finished at #55 with a strong showing on Economy and Social Capital indicators but failed to break into the top category across all other sub-indices with a particularly poor showing in Personal Freedom (#129) and Safety/Security (#101).
  • The largest sub-indice gains were found in Entrepreneurship/Opportunity and Health while Social Capital and Governance barely changed. Safety/Security declined driven by the Arab Spring and high rates of theft and assault in Latin America.
  • Accountable government was seen as a “key stepping stone to prosperity” with the notable exception of India, where corruption concerns continue to grow, falling ten places. Twenty-seven of the top thirty countries in the index are democracies.
  • A strong correlation was also found between tolerance indicators and high overall prosperity rankings. Win won for immigration and integrative social values.

* Prosperity was defined as income and wellbeing which include both numeric data and survey results standardized for statistical comparison. Details on their methodology can be found here and their full press release.

Brian • November 2, 2012


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