Thursday, 3 November 2011

On Feeling Prosperous

It was with considerable interest that I read the findings of the 2001 Legatum Prosperity Index.  According to them two Scandinavian countries, Norway and Denmark rank first and second, followed by two from the Antipodes; Australia and New Zealand in that order.

Given the $NZ16 billion debt that New Zealand has and the significant infrastructural damage it has sustained from a series of earthquakes I find this analysis quite remarkable.

Singapore by comparison ranks only 16th in their index.  So I used their preposterously named 'prosperiscope' to compare the two countries - NZ and Singapore -  and see where they believed the difference lay?

Here are the results with New Zealand in black and Singapore in brown.
The prosperity ranking is based on 8 different criteria:
  1. Economy - measures  countries’ performances in four areas that are essential to promoting prosperity: macroeconomic policies, economic satisfaction and expectations, foundation for growth, and financial sector efficiency
  2. Entrepreneurship and Opportunity - measures countries’ performances in three areas: entrepreneurial environment, innovative activity, and access to opportunity. 
  3. Governance - measures countries’ performances in three areas: effective and accountable government, fair elections and political participation, and rule of law
  4. Education - countries’ performances in three areas: access to education, quality of education, and human capital. 
  5. Health  - measures countries’ performances in three areas: basic health outcomes, health infrastructure and preventative care, and physical and mental health satisfaction
  6. Safety and Security  - measures countries’ performances in two areas: national security and personal safety. Sub-Index Score. Own Calculations. Data are from 2011
  7. Personal Freedom  - measures countries’ performances in two areas: individual freedom and social tolerance. 
  8. Social Capital  - measures countries’ performances in two areas: social cohesion and engagement, as well as community and family networks
As might be expected Singapore is well ahead of the average in terms of the economy

Both countries are level pegging at the global average when it comes to Entrepreneurship and Opportunity.

However according to the Legatum Institute which is an independent non-partisan public policy group based in London, Singapore's ranking fall well short in four areas: Governance, Education, Personal Freedom and Social Capital.

I have no doubt that the Singapore government would take issue with this analysis and the criteria used.  I too find it hard to believe in the gap between Singapore and New Zealand in the area of Education and the 'social cohesion' rating for NZ seems highly over stated and therefore over rated.

The video below explains how the Legatum Institute  arrived at their Prosperity Index.

Video source: The Legatum Institute
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1 comment:

Anonymous said...

Hey :) Yes, I read your post and applied scrutiny. I am not trying to humiliate the logic, but I would say that the NZ and Singapore comparison in my mind is ranked in such a way because of cultural bias as The Legatum Prosperity Index seems to be calculated by a western company; in London, infact. I don't know how much bias you have to singapore lifestyle and being accustomed to Singapore culture, although I'd like to know.
I would just hazard a guess that Singapore ranks lower than NZ because, Singapore has state controlled media, which seems to get anxious eyes from the west. Also things such as crime, the sub criteria, affects the ranking. Now it is known to me that the Singapore southern coast sea is a crime hotspot where cargo being shipped is stolen. Also, odd as it may seem, after destuction, ratings can go up because there is a sense of team bonding, and brand new places are built which is aesthetically pleasing, which scores better on other criteria such as cleanliness and building safety.