from Latin America's Moment and Latin America Studies Program

How Latin America Fares in the Legatum Institute’s Prosperity Index

November 6, 2013

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The Legatum Institute, a London-based policy organization, just published its annual Prosperity Index. Using eighty-nine indicators across eight indices—economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom, and social capital—it moves beyond more standard macroeconomic country rankings to take into account income and social well-being. Questions range from if citizens have “helped a stranger in the past month” to a nation’s “incidence of tuberculosis.” With the scores tallied up, here is a look at where Latin America’s prosperity by their measures stands.

In the economic sphere, Latin America took off—passing the global average for the first time—with nine countries among the world’s top fifty economies. Mexico led in the twenty-seventh spot (up from the thirty-fourth position in 2011), passing Brazil in the thirty-second position. El Salvador and Chile also performed quite well in the economic rankings, benefiting from low inflation and relatively low unemployment rates. Chile and Panama excelled in the entrepreneurship and opportunity index, measured by indicators such as R&D investment and secure internet servers. Costa Rica, Brazil, and Mexico came in close behind—an encouraging sign for regional start-ups and potential foreign investment.

Latin America also shined in the personal freedom scores, which include social tolerance, civil liberties, and satisfaction with individual liberties indicators. In this index, Uruguay and Costa Rica ranked tenth and eleventh in the world respectively, and ten Latin American countries landed in the top fifty countries. Somewhat surprisingly Mexico lagged at number eighty-one in this category—behind the global average—pulled down by the low number of Mexicans who reported that their country is immigrant-friendly (50 percent), compared to 85 percent in the United States.

In safety and security, Latin American countries (unsurprisingly) fall behind. Mexico, Ecuador, Venezuela, and Colombia all rank in or near the bottom quarter of countries across a wide range of indicators ranging from theft statistics to whether citizens felt that they could safely express their political opinions. Some 25 percent of Paraguayans, 19 percent of Venezuelans, 17 percent of Ecuadorians, and 13 percent of Mexicans reported personally being assaulted in the past year, and only one quarter of Venezuelans reported feeling safe walking alone at night.

The region’s education and health systems also lag. Although Argentina and Uruguay rank the highest in Latin America, they only made it into the forties and fifties globally. Only 60 percent of Brazilians responded optimistically about their children’s opportunity to learn (compared to the global average of over 70 percent). And in Mexico, only 1.7 hospital beds were available for every 1,000 potential patients (compared to 3.1 globally).

Emerging from the data is a more diverse picture of Latin America. Uruguay, Costa Rica, and Chile rank similarly to Italy, Poland, and the UAE, and economic heavyweights Mexico and Brazil come in overall behind countries such as Hungary and Malaysia. By expanding the ways one measures a country’s prosperity, the index usefully differentiates and highlights some lesser known successes and challenges across Latin America and the globe more broadly.

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