What is Prosperity and How Do We Measure it?

AEI Development Policy Outlook, No. 3, 2009

7 Pages Posted: 23 Oct 2013  

Roger Bate

American Enterprise Institute (AEI)

Date Written: October 27, 2009

Abstract

A year ago, French president Nicolas Sarkozy created the Commission on the Measurement of Economic and Social Progress. Sarkozy believes that economic growth, as measured by the gross domestic product (GDP), is not a sufficient measurement of our well-being. He has a point. While GDP encompasses myriad economic variables — broadly representing a nation’s income and, hence, economic progress over time — it fails to capture important ingredients of prosperity, such as health, personal freedom, and security. The Sarkozy commission has issued its first report, but it fails in some crucial respects.

The London-based Legatum Institute’s Prosperity Index goes a long way toward addressing the concerns Sarkozy has about broader measures of well-being. The Index, now in its third year, assesses a wide variety of economic and social indicators for most of the world’s population and ranks countries according to their performance.

Suggested Citation

Bate, Roger, What is Prosperity and How Do We Measure it? (October 27, 2009). AEI Development Policy Outlook, No. 3, 2009. Available at SSRN: https://ssrn.com/abstract=2342844 or http://dx.doi.org/10.2139/ssrn.2342844

Roger Bate (Contact Author)

American Enterprise Institute (AEI) ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

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