Recently, the Legatum Institute released its 2011 Prosperity Index. Unlike other measures of prosperity such as GDP, which focus solely on measuring levels of wealth, life satisfaction, or development, Legatum’s Prosperity Index uses a holistic definition of prosperity, assessing countries based on 89 unique variables related to both material wealth and quality of life. In essence, the Prosperity Index ranks countries based on the foundations of prosperity - factors that help drive economic growth and produce happy citizens in any given country.
Today, 110 countries are ranked by the Index. The Index itself consists of eight sub-indexes, each of which represents a fundamental aspect of prosperity. Of particular interest to our community is the Governance Sub-index, which measures countries’ performance in three areas of governance:
Effective and accountable government
Fair elections and political participation
Rule of law
I applaud this important distinction within the Prosperity Index, which clearly links economic fitness to countries with governments that are stable and accountable to their citizens, including how well they address issues such as poverty and environmental sustainability. I believe that this provides a much more accurate and long-term picture of prosperity.
Academic research has found that in general, political freedom, strength of institutions, and regulatory quality are significant contributors to economic growth. Effective, fair, and accountable governments also increase public confidence, leading to higher levels of life satisfaction among citizens. Likewise, citizens’ access to public officials to voice concerns is correlated with higher wellbeing.
These are considerations that we know our customers hold in high regard and, through technology, continuously strive to perfect. As our global society develops a more holistic view of prosperity, the issue of government performance and citizen satisfaction will only become more critical. For more on this topic, I highly recommend a recent blog post from Joel Cherkis, our General Manager of Worldwide Government and Security, which examines the qualities of high-performance governments.
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