North America is back on top as the world’s most prosperous region, based on the Legatum Prosperity Index 2018. The continent, while faced with stagnation for several years, has finally regained its position as the best region in terms of prosperity, marked by its biggest overall gain since 2007.
North America emerged as the top 1 region in 2018 mostly because of the improvement of Canada and the United States in almost all pillars considered in determining a region’s prosperity growth.
As one of two major contributing countries, Canada progressed in every aspect except Social Capital, helping the nation jump from the 11th to the 8th position globally. Meanwhile, the U.S. saw a similar scenario and improved in almost all pillars except Natural Environment, which helped cement its position as the 17th most prosperous country across the globe.
With these two main players in consideration, the Legatum Institute was able to pinpoint the main reasons why North America was able to take back its former glory
6 Reasons Behind North America’s Gain
According to data by London-based global investment firm Legatum, there are several aspects that pushed North America back to the top. Below are six important pillars with significant improvements that helped the region bounce back:
- Governance
Governance within the North American region was able to rebound from the decline in the previous years. In Canada, more citizens reported higher confidence that the nation’s election was untainted by dishonesty. On the other hand, the U.S. saw an improved score in judicial independence.
- Economic Quality
Economic quality is another major indicator of North America’s success this year. While this is often measured according to the gross domestic product (GDP) or the national output for a certain year, Legatum Institute takes more factors into consideration, including the poverty rates and living standards in a region.
For North America, Canada didn’t drop in any aspect of economic quality but still got the 21st spot while the U.S. saw a slight drop in its economic complexity score despite seeing an increase in its overall score. However, both countries have solid scores in terms of their citizens’ perception of their living standards, with 87 percent satisfaction for Canada and 84 percent for the U.S.
- Personal Freedom
Safety and security, an important indicator of a nation or region’s prosperity index, continues to drop across the globe. Even so, the think tank was able to record more Canadians reporting better conditions in terms of food supply and shelter.
Because of this, Canada was able to take the top spot, surpassing New Zealand in terms of personal freedom after a major drop in 2016 and 2017. According to Legatum research, this is a result of 87 percent of the country’s population reporting satisfaction on their sense of liberty. It is also the prosperity index pillar that saw the highest growth between 2017 and 2018.
- Business Environment
In terms of the business environment, North America continues to lead all other regions around the world, with the U.S. and Canada bagging the 1st and 3rd spots in this prosperity index pillar, respectively. However, there remains one aspect that needs improvement: transport of goods. The Logistics Performance Index recorded lower scores for both nations when it comes to shipping products across and into the country.
- Education
Education is an important building block for societies to prosper, mainly because it affects the quality of human capital. The think-tank saw improvements in this pillar of prosperity across the globe. Despite having only moderate improvement in this field, North America remains at the number one spot in terms of human capital, which is measured based on the educational level and skills that citizens get.
- Social Capital
North America bagged the top spot in terms of social capital despite Canada’s lack of improvement in this prosperity pillar. While the Great White North saw a significant dip in the number of people reporting for volunteer work giving to charitable causes, the U.S. was able to pull the region’s score up significantly because of its record-breaking $400-billion worth of donations in 2017. According to the prosperity index, this is the biggest sum of donations ever made.
Why North America Found Success
Taking back its former glory, North America was able to bounce back and lead the 2018 Prosperity Index because of significant improvement in social capital, education, business environment, personal freedom, economic quality, and governance. This feat comes amid reports of stagnation across the region, proving that the continent continues to improve, albeit gradually.
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