Russia one of only two all-round improvers in prosperity study

Russia one of only two all-round improvers in prosperity study
By Henry Kirby November 12, 2015

Russia achieved its highest ever rank and was one of only two countries to improve in all measurable areas in a recent study examining levels of prosperity across the world.

The Prosperity Index 2015, published by London-based think tank the Legatum Institute, ranks 142 countries across a number of criteria to measure the comparative levels of prosperity experienced by each. Alongside Greece, Russia was the only country to see itself move up the global rankings in each of the eight sub-categories and 10 places - to 58th overall - for its overall prosperity score.

Russia's improved ranking comes as a surprise, considering the continued economic stagnation the country has suffered since US- and EU-led sanctions were imposed in mid-2014. Months of decline in real wages and continued price increases are testament to the fact that very little evidence exists of any real improvement in Russia's economic situation compared with previous years during which the Prosperity Index was measured, making the score improvements all the more puzzling.

However, the Prosperity Index places as much emphasis on subjective interpretations of well being as it does on empirical income or economic data. What this tells us is that, while Russia's economy is in the doldrums, Russians are feeling better than ever about themselves.

Data from polls conducted by the social research organisation Gallup is allocated a heavy weighting in the study, with questions on perceptions of safety, trust of neighbours and national pride all playing as big a role as inflation levels, unemployment and volume of non-performing loans.

For the fourth year running, Norway ranked top for its overall prosperity score, with Switzerland coming in at second for the third consecutive year. This year, the fourth and fifth places were taken up by Denmark, New Zealand and Sweden, respectively. The highest-ranking Central and Eastern European and Commonwealth of Independent States (CEE/CIS) country was Slovenia, in 25th place, followed closely by the Czech Republic in 26th.

CEE/CIS countries generally fell around the middle third of the rankings. The lowest-placed CEE/CIS country was Armenia, in 93rd place. Despite relatively impressive education and "safety and security” rankings - 49th and 55th, respectively - its economy, social capital and personal freedom scores of 126th, 124th and 119th let it down.

Generally speaking, CEE/CIS countries appeared to improve, year on year, in the economy category, with all but eight of the CEE/CIS countries included seeing themselves climb the economy sub-category rankings to some degree. Macedonia was the highest CEE/CIS climber in the economy category. Unsurprisingly, Ukraine suffered the largest fall following more than a year of armed conflict in its Donbas region, the fallout of which has included rocketing inflation and over a year of consecutive monthly decreases in its industrial production.

Looking beyond the rankings and relatively impressive performances of some CEE/CIS countries, the underlying data of the study show that the overall picture of CEE/CIS prosperity may be better than a few low-performing outliers may suggest. While the Baltic and Central European countries are knocking on the door of the more developed Western European and EU countries, the rest of the region has seen a decline by some measures.

Indexing the underlying scores behind both the average and median Prosperity Index rankings of the EU and CEE/CIS shows a steady improvement in both measures for the EU but wildly different measures for CEE/CIS.

While the average score of CEE/CIS has increased at a steady rate since the index was first measured in 2009, the median score - which avoids a disproportionately well- or badly-performing country distorting the overall picture - has soared. This suggests that more CEE/CIS countries than not are seeing improvements in their scores, with only a few particularly bad performers weighing down what could be an even more impressive average. Events like the ongoing Ukraine conflict, or the crackdown on media freedoms in countries like Turkey and Azerbaijan could explain this.


Use the interactive map below to explore the Prosperity Index data in more detail.