Member News
27th October 2010
In ePolitix.com's second interview with Jiehae Choi, researcher at the Legatum Institute, to mark the release of the 2010 Prosperity Index, we look at why Nordic countries are rated the most prosperous.
Nordic countries take the top three positions in the 2010 Prosperity Index, with Norway taking poll position. Iceland is the Nordic country furthest down the index at position 12.
Discussing why Nordic countries are considered to be so prosperous, Jiehae hits on the word, "trust".
"Norway has the highest level of trust in the entire index, on a variable that asks you – do you find others in your society trustworthy?" she says.
Yet to sit at the top of the Index, high levels of trust cannot be the only thing that a country relies on.
"Nordic countries are some of the most economically free countries," Jiehae says. "They have recently gone through a lot of deregulation."
Famed for their welfare states, Jiehae calls it a "misconception" that in order for a country to be prosperous it needs a welfare state.
"Welfare states work for certain, generally small homogenous countries, because there are levels of social trust that exist in that country which make the social welfare system work.
"This is a generalisation, but in a lot of Nordic countries, if I give a dollar to the state, it comes back to me.
"So the state is being used as an efficient mechanism to make sure the costs are lowered; it makes things more effective and efficient.
"In a lot of large countries where there are a lot of socio-economic difficulties and wide income disparities, the rich give a dollar and that goes to somebody else," she says.
Surely that is evidence that the more equal a country, and the less of a gap there is between rich and poor, the more prosperous a country is likely to be? It’s not that simple, says Jiehae.
"I think that is more of a symptom or an outcome rather than a driving force for anything," she says.
"If a government or an external source is trying to force equality upon a nation, that is a negative thing, in the same way as it is a negative thing if there are wide disparities within a country but no opportunity to better oneself," she says.
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