The Prosperity Index is an inquiry into the nature of prosperity and how it is created. This is the second edition of the Index, which builds on last year’s inaugural publication with expanded coverage and refined analysis. Scholars and researchers affiliated with the Legatum Institute have significantly expanded it in scope, investigating prosperity drivers and outcomes in more than 100 countries worldwide, increased from only 50 last year.

We define prosperity holistically to include both material wealth and quality of life. Rather than replicating other measurements that rank countries by their actual levels of material wealth or life satisfaction, the Index produces a ranking based on the conditions that foster prosperity – that is, the factors that promote economic competitiveness and improved liveability in a given country. We refer to these factors as drivers of prosperity and to those that impede prosperity, as restrainers. The Index endeavours to rank countries according to the strength of these drivers and restrainers, not according to simple measures of income and life satisfaction. In this way we hope to contribute to a richer analysis of what promotes prosperity globally.

The full details of the Index and its construction are included in the 2008 Prosperity Index Report, together with a comprehensive table of country rankings. The Report, which also includes original research papers on key topics in prosperity from leading scholars and country profiles for each of the 104 countries in the Index, is available in printed form and on the Legatum Institute website at www.prosperity.com.