The pursuit of happiness is difficult to quantify. After all, happiness is relative. What makes one individual happy may not correspond with another individual’s definition of happiness. And when happiness is projected on a national scale, it becomes even more difficult to quantify.
How is national happiness defined?
On an individual scale, happiness can be measured through a wide range of subjective appraisals. This is primarily known as subjective well-being. Subjective well-being is assessed in three parts:
- Positive affect
- Negative affect
- Life satisfaction
On a national scale, happiness has its own specific requirements.
The Legatum Institute, a London-based think-tank, measures a nation’s happiness through the lens of prosperity. Prosperity, according to Legatum, is “much more than wealth.” Prosperity is a driver of progress. It impacts a nation’s financial, political, and social landscape. It is also a defining factor in the nation’s well-being and its character.
A nation that is more prosperous translates to a populace with greater happiness.
So, how is prosperity measured? The Legatum Institute measures prosperity through its annual Prosperity Index. Legatum’s methodology explores the relationship between wealth and well-being.
This methodology uses the following nine factors:
- Economic Quality
- Business Environment
- Safety & Security
- Personal Freedom
- Social Capital
- Natural Environment
Through the factors above, Legatum is able to statistically and empirically understand how content a nation and its citizens are.
The 2018 Prosperity Index report
In the latest Legatum Institute Prosperity Index report, Norway claimed the top spot. But Norway is not the lone Nordic country listed as a prosperous nation. In fact, four of the five top spots were claimed by Northern Europe — Norway, Finland, Switzerland, and Denmark, respectively.
The success of Scandinavia is a trend that plays itself out year after year. Throughout every Prosperity Index report, Scandinavia consistently ranks high. Despite bleak winters, these nations are celebrated as some of the happiest.
What do these Nordic countries have in common that enable them to dominate Legatum’s Prosperity Index every year? Below, we look at the key factors that underscore Northern Europe’s success.
A society that embraces free enterprise is one that is poised to accelerate its economic growth. Countries with a strong Business Environment, like that found in Northern Europe, maximize the productive capacity of its workforce.
A nation with an open economy has a greater entrepreneurial environment. This contributes to a more vigorous economy, enabling material prosperity and investments in human development to flourish.
Citizens that are afforded greater personal freedom and diversity have been shown to experience greater levels of subject well-being. The protection of personal liberties, as well as personal autonomy, are essential to creating an environment in which people feel empowered.
Empowered citizens have greater social trust and social tolerance, and present increased levels of satisfaction. Societies that promote social capital experience greater civic participation, which results in greater economic returns.
A well-governed society provides its citizens with access to quality education and strong health infrastructure. Better integrated social systems allow citizens to enhance their educational opportunities and enjoy good physical and mental health.
Both are essential to increasing per capita income levels and higher economic development.
Strong societal infrastructure ensures individuals are able to fulfill their potential. And as the top countries demonstrate, a nation with productive citizens is more content.
Inclusion is the fundamental bedrock of all human rights. Societies that embrace diversity and provide mechanisms for accessibility strengthen social cohesion and social participation. When people feel like they can rely on others, social trust increases.
An inclusive society produces a stable social and political environment. This has several positive effects including sustained economic growth, greater distribution of prosperity, higher levels of personal health, and increased life satisfaction.
As the top Nordic countries demonstrate, greater inclusion fosters economic growth and greater societal well-being. Norway, the leading prosperous nation, has the world’s most inclusive economy. Not only does Norway have one of the highest median incomes, but it also prioritizes quality education. Norway also demonstrates inclusion by significantly closing the gender gap.
What makes a country happy?
It is often said that money can’t buy happiness. And while happiness may not be derived from material prosperity, true prosperity shows a significant relationship with happiness. Legatum’s findings demonstrate a strong correlation between societal well-being and material prosperity.
As the happiest nations show, when a country’s population conveys a sense of satisfaction and subjective well-being, the material economy benefits.