The Happiest (And Saddest) Countries In The World

Bergen and Alesund - Norwegian Archipelago FjordsThe United States is a nation in decline. Last year the land of the free and the home of the brave came in 10th place in the annual rankings of World’s Happiest Countries. This year the U.S.A. has slipped to 12th.

This marks the first time in the six-year history of the Legatum Institute‘s Prosperity Index that America has not placed in the top 10.

The U.S. has slipped in the areas of Governance, Personal Freedom, and most troubling, in Entrepreneurship & Opportunity. The slide in that final category, according to the report, “is due to a decline in citizens’ perception that working hard gets you ahead.”

Whether you think this is a temporary fluke or a leading indicator of the collapse of a great country depends on what your politics are. (Please leave your comments on that topic below.)

The Legatum Prosperity Index is based on a study of 142 countries comprising 96% of global population. Nations are analyzed and ranked on 89 indicators in 8 categories such as education, government and economics. Per capita GDP — basically how rich a nation is — is a factor in the index, but the whole point of the Legatum study is to look beyond such a simple measure at all the myriad issues that make up wellbeing and prosperity.

In general, the most prosperous (thus “happiest” in my book) countries enjoy stable political institutions, a strong civil society with freedom of expression, good education and healthcare, personal freedom and a feeling of being safe and secure.

Under those measures the U.S. is getting less happy.

U.S. unemployment remains stubbornly high and start-up costs are rising, while high-tech exports are in decline. As Nathan Gamester, project director of the index, explains:

“Even within the realm of economic health, broader measures can illuminate the drivers of change and serve as leading indicators. Take, for example, citizens’ perceptions of job markets. In India and China, the percentages of citizens who think that it is a good time to find a job is 40% and 36%, respectively. In the U.S. and U.K., those percentages are, respectively, 26% and 12%.”

So who are the happiest people in the world, as measured by Legatum? Norway takes the crown, followed by Denmark and Sweden (which leapfrogged Australia and New Zealand this year). Rounding out the Scandinavians is Finland, just a few steps behind in the seventh spot.

Luxembourg is the healthiest nation on Earth. Iceland is the safest. Switzerland has the world’s best economy and governance, according to Legatum.

What’s Norway got that the rest of the world doesn’t? For one thing, a stunning per capita GDP of $57,000 a year. Norwegians have the second-highest level of satisfaction with their standards of living: 95% say they are satisfied with the freedom to choose the direction of their lives; an unparalleled 74% say other people can be trusted. It sure doesn’t hurt that the massive Norwegian welfare state is bankrolled by high taxes and big reserves of offshore oil and gas.

On the other side of the spectrum, the lowest ranking, or saddest country on the Prosperity Index, is the Central African Republic. There the per capita GDP is $790 per year, life expectancy is 48, and just 2% of people have internet access at home. Right behind the CAR at the bottom are Congo, Afghanistan, Zimbabwe and Haiti.

Though the good people at the Legatum Group (founded by New Zealand billionaire Christopher Chandler) are certainly making a good faith effort toward figuring out the key traits of successful societies, there are some areas where their data is unreliable.

Many of the inputs for the Index come from surveys of citizens in the countries. This is problematic because opinion polls are inherently subjective, and because of cultural and educational differences people in different countries may have starkly varying takes on the same circumstance.

For instance, one of the inputs for Legatum’s economic prosperity measure reflects whether citizens of a country “have confidence in financial institutions.” Last year only 48% of Americans reported being confident in financial institutions, versus 61% worldwide. It cannot be the case that America’s banks are less secure than the global average. And it’s silly to rely on subjective opinion for such a thing when there’s plentiful objective data on bank health (see Forbes Rankings of America’s Best and Worst Banks.)

The measurement of “social capital” is problematic as well, as one of the inputs reflects the percentage of citizens who “attended a place of worship” in the past week. I agree that many people glean a lot of social cohesion by going to church, temple or mosque, but there’s also plenty of folks who get the same sense of peace from going to yoga class on the beach or a walk in the woods.

That said, the Legatum survey does a better job of measuring true “happiness” than some of the similar surveys out there.

Full List: The Happiest And Saddest Countries In The World
The Gallup organization did a recent survey seeking to determine which country had the happiest people by going out to 148 countries and asking thousands of people questions such as:


9 thoughts on “The Happiest (And Saddest) Countries In The World

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