October 27, 2009


Let Freedom Ring: Democracy and Prosperity are Inextricably Linked (Joel Kotkin 10/26/2009 , New Geography)

[A] new study released Monday by my colleagues at the Legatum Institute refutes the notion that the road to worldly riches lies in autocracy and repression. In a careful study of everything from economic opportunity, education and health to security, freedom of expression and societal contentment, the Legatum "Prosperity Index" makes a powerful case for the long-term benefits of democracy, free speech and the rule of law.

Some of this stems from how Legatum measures prosperity. The survey takes into account both wealth and well-being, and finds that the most prosperous nations in the world are not necessarily those that just have a high GDP, but that also have happy, healthy, free citizens.

The top of the list, which ranks 104 countries, is dominated by flourishing democracies. The only exception in the top 20 is No. 18's Hong Kong, which ranks first in economic fundamentals and continues to be ruled, if not quite democratically, under a far more permissive system than the rest of mainland China. The next semi-autocratic state on the list is Singapore, at No. 23 – another Confucian-style autocracy with great economic and human capital fundamentals.

This linking of democracy and prosperity with well-being is by far the most significant aspect of the study. But what else determines the success of nations in the modern world?

1. Small democracies do best.

The denizens of the Greek city-states or their Renaissance counterparts would have recognized something of themselves in the small, well-managed countries that dominate the top of the list. The top five, Finland, Switzerland, Sweden, Denmark and Norway – as well as the Netherlands at No. 8 – certainly fit this description. These countries rank highly on the quality of life measurements, and, not surprisingly, their main cities also tend to dominate the most-livable-cities lists. [...]

2. Among the mega-countries, the U.S. is still way ahead

Don't cry for me, America. In terms of the large countries, both in population and size, no one comes close to the No. 9-ranked U.S. Indeed there's not another country with over 100 million people on the list until you get to Japan at No. 16.

Hawaii and Alaska are the most obvious sovereign states, but various regions will also become independent. 500 million people is a wonderful thing, but too many for a single political entity.

Posted by Orrin Judd at October 27, 2009 6:06 AM
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