IS THE SWEDISH MODEL HERE TO STAY?

THE LEGATUM INSTITUTE www.li.com www.prosperity.com IS THE SWEDISH MODEL HERE TO STAY? THE INGREDIENTS OF PROSPERITY: SWEDEN AND ITS NEIGHBOURS It has been suggested that the success of Sweden and its neighbours provides a model of how to achieve national prosperity in an increasingly competitive and globalised world. Indeed the success of certain Nordic countries has translated not just into economic prosperity but also to some of the highest levels of societal wellbeing in the world. The Legatum Prosperity Index which evaluates 142 countries based on eight different factors (ranging from the health of the economy, good governance, entrepreneurial opportunities, to social cohesion) finds that Norway, Sweden, Denmark, and Finland rank among the best in the world on these measures. Norway holds the number one position overall in the 2012 Index (for the fourth year running), while Denmark ranks second, also for the fourth year running. Sweden follows close behind at third and Finland is comfortably situated at seventh. Of these four Nordic countries, Sweden has seen the biggest improvement in overall ranking having climbed from seventh to third since 2009. Among other things, a strong economy, high levels of personal freedom, and a thriving entrepreneurial environment has contributed to this success. While each of these countries has its own individual history, culture, and politics, the Prosperity Index does find some common traits among the four countries. These traits reveal some potentially surprising truths. The Index supports the view that the Nordic model is not simply a socialist or welfare state by a different name, but rather a system that fosters highly competitive entrepreneurial environments that result in remarkably pro-business attitudes among citizens. These Nordic countries are also among the safest places in the world with extremely cohesive societies, displaying very high levels of social trust. These findings are reflected in three of the Prosperity Index s eight sub-categories: Entrepreneurship & Opportunity; Safety & Security; and Social Capital.

THE 2012 LEGATUM PROSPERITY INDEX RANKINGS TOP 10 High Ranking Countries (30) Upper Middle Ranking Countries (41) OVERALL PROSPERITY RANK COUNTRY ECONOMY ENTREPRENEURSHIP & OPPORTUNITY GOVERNANCE 1 Norway 2 4 13 6 4 2 6 1 2 Denmark 19 1 3 16 16 8 7 2 3 Sweden 5 2 4 12 14 6 5 9 4 Australia 10 8 8 2 17 19 3 3 5 New Zealand 27 13 2 1 20 13 2 4 6 Canada 8 16 6 3 15 9 1 8 7 Finland 16 3 5 8 12 3 19 5 8 Netherlands 14 10 11 11 7 18 9 6 9 Switzerland 1 7 1 32 3 10 22 11 10 Ireland 25 14 14 14 11 4 4 7 EDUCATION HEALTH SAFETY & SECURITY PERSONAL FREEDOM SOCIAL CAPITAL The four Nordic countries occupy the top four places in the Entrepreneurship & Opportunity sub-index. Such uniform dominance is the result of successfully meeting the challenges of the new globalised world head-on. Norway, for example, enriched by its oil wealth is doing much to plan for the post-oil future, by promoting high-skilled specialised industries through programs like Innovation Norway (Norway ranked 10th in Entrepreneurship in 2009; this year it ranked 4th). Finland faced similar economic challenges with the fall of the Soviet Union at the time their most trusted trade partner and an overreliance on specific industries that made a disproportionately large contribution to overall GDP (e.g. Nokia). Today Finland has a $600 million innovation and technology agency which seeks to support start-up companies. The Prosperity Index finds that citizens in these four Nordic countries have some of the best opportunities in the world. On average the cost of starting a business is just 0.85% of GNI per capita (the global average is 20.5%). Further, ICT infrastructure is highly developed, giving entrepreneurs the necessary technological tools to access both domestic and international markets and ideas. Moreover, these countries are investing in developing ideas for the future, with both private and public sectors jointly spending, on average, 2.4% of GDP on research and development (the global average is 0.9% of GDP). However, these four Nordic countries are doing much more than just writing a recipe to stay ahead economically, they are also one of the safest in the world. In the Safety & Security sub-index, Norway places second in the world with Finland third, Sweden sixth, and Denmark eighth. On average 82% of citizens in Nordic countries feel safe walking home at night (the global average is 62%). Furthermore, rates of crimes such as assault and theft are below the global average. These countries are also the most socially cohesive in the world according to the Social Capital sub-index, which measures the trust, social networks, and altruistic behaviour. Here Norway places first, Denmark second, Finland fifth, and Sweden ninth, globally. When asked do you think that most people can be trusted [in your country], an average of 63% of citizens in Norway, Denmark, Sweden, and Finland said they could the global average is just 24%. Nearly 94% of citizens reported to having someone they can rely on during hard times. A quarter of the population formally volunteer their time in their community and over half the population have helped a stranger in the past month. Such high levels of social capital produces wide-reaching benefits. For example, in countries where social capital is high, business regulation is both more efficient and there is less of it (this is because when people trust each other, there is less need to create regulatory intermediaries for economic and social transactions). Norway, Denmark, Sweden, and Finland consistently perform extremely well on global indices such as the Legatum Prosperity Index. This demonstrates an ability to achieve prosperity for citizens beyond just material wealth. Naturally there are challenges ahead including on issues such as immigration levels and social integration. Yet, the policies pursued by these countries provide citizens with the opportunities to get ahead in the global market underscored by a sense of security and social cohesion. These solid foundations suggest that their approach is here to stay.

2 DENMARK THE 2012 LEGATUM PROSPERITY INDEX RANKING COUNTRY FACT SHEETS COUNTRY OVERVIEW Copenhagen Global Av. Population (million) (2010) 5.50 N/A Life expectancy (years) (2010) 79.1 69.6 Birth rate (per year per 1000 people) (2010) 11 22 Fertility rate (births per female) (2010) 1.9 2.8 Life satisfaction* (rated 0 > 10) (2011) 7.8 5.5 Female representation in the legislature (2011) 38.0% 19.5% Internet access at home? (2011) 90.1% 34.2% Satisfied with job/work?* (% yes) (2011) 94.0% 73.3% People are treated with respect in your country* (% yes) (2011) 94% 85.1% GDP per capita (ppp) (2010) $40,162.60 $14,774.73 Copenhagen INDEX COMPARISONS Rank/ No. of countries Legatum Prosperity Index 2/142 Average Life Satisfaction Ranking* (2011) 1/142 Per Capita GDP Ranking (2010) 11/142 WEF Global Competitiveness Index (2011) 8/142 UN Human Development Index (2011) 16/187 SUB-INDEX RANKINGS 19 Economy Social Capital 2 Personal Freedom 7 Entrepreneurship 1 & Opportunity 3 Governance Heritage/WSJ Economic Freedom Index (2011) 8/179 TI Corruption Perceptions Index (2011) 2/182 World Bank Doing Business Index (2012) 5/183 Safety & Security 8 16 Health 16 Education Top 30 Upper Middle (41) Lower Middle (41) Bottom 30 PROSPERITY INDEX: DATA IN FOCUS 19 ECONOMY Denmark Global Av. 5 year growth rate (2010) -0.5% 2.7% Confidence in financial institutions?* (% yes) (2011) 63.7% 61.9% Satisfaction with living standards?* (% yes) (2011) 90.1% 59% 1 ENTREPRENEURSHIP & OPPORTUNITY Business start-up costs (% of GNI) (2011) 0.0% 36.3% Mobile phones (per 100 ppl) (2011) 126.5 98.7 Will working hard get you ahead?* (% yes) (2011) 88.6% 81.1% 3 GOVERNANCE Confidence in the government?* (% yes) (2011) 48.7% 53.7% Confidence in the judiciary?* (% yes) (2011) 86.1% 52.5% Government effectiveness 1 (2010) 2.17 0.03 16 EDUCATION Pupil to teacher ratio (2009) 10:1 25:1 Satisfaction with education quality?* (% yes) (2011) 78.9% 66.6% Perception children are learning?* (% yes) (2011) 91.2% 70.4% 16 HEALTH Denmark Global Av. Self-reported health problems?* (% yes) (2011) 25.5% 23.9% Hospital beds* (per 1000 people) (2009) 3.5 3.2 Satisfaction with health?* (% yes) (2011) 79.8% 78.8% 8 SAFETY & SECURITY Human flight 2 (2011) 2.1 5.4 Safe walking at night?* (% yes) (2011) 82.3% 61.9% Property stolen?* (% yes) (2011) 12.6% 16.8% 7 PERSONAL FREEDOM Civil liberties 3 (2011) 7 4.8 Tolerance for immigrants?* (% yes) (2011) 88.9% 65% Satisfaction with freedom of choice?* (% yes) (2011) 93.5% 73.4% 2 SOCIAL CAPITAL Rely on others?* (% yes) (2011) 96.2% 80.6% Donations?* (% yes) (2011) 70.0% 28% Help strangers?* (% yes) (2011) 54.6% 45.7% NOTES: 1 Gov. effectiveness: values range from -1.73 to 2.25, higher values indicate higher effectiveness. 2 Human flight: values range from 1 to 10, higher values indicate higher levels of human flight. 3 Civil liberties: values range from 1 to 7, lower values indicate lack of civil liberties. *Survey data are taken from Gallup World Poll. Norway 1 Denmark 2 Sweden 3 Finland 7 Netherlands 8 Switzerland 9 Ireland 10 Luxembourg 11 United Kingdom 13 Germany 14 Iceland 15 Austria 16 Belgium 17 France 21 Spain 23 Malta 25 Portugal 26 Cyprus 30 Italy 33 Greece 49 REGIONAL RANKING EUROPE

7 FINLAND THE 2012 LEGATUM PROSPERITY INDEX RANKING COUNTRY FACT SHEETS COUNTRY OVERVIEW Helsinki Global Av. Population (million) (2010) 5.40 N/A Life expectancy (years) (2010) 79.9 69.6 Birth rate (per year per 1000 people) (2010) 11 22 Fertility rate (births per female) (2010) 1.9 2.8 Life satisfaction* (rated 0 > 10) (2011) 7.4 5.5 Female representation in the legislature (2011) 42.5% 19.5% Internet access at home? (2011) 84.2% 34.2% Satisfied with job/work?* (% yes) (2011) 88.0% 73.3% People are treated with respect in your country* (% yes) (2011) 91% 85.1% GDP per capita (ppp) (2010) $36,472.60 $14,774.73 INDEX COMPARISONS Rank/ No. of countries Legatum Prosperity Index 7/142 Average Life Satisfaction Ranking* (2011) 11/142 Per Capita GDP Ranking (2010) 19/142 WEF Global Competitiveness Index (2011) 4/142 UN Human Development Index (2011) 22/187 SUB-INDEX RANKINGS 16 Economy Social Capital 5 Personal Freedom 19 Entrepreneurship 3 & Opportunity 5 Governance Helsinki Heritage/WSJ Economic Freedom Index (2011) 17/179 TI Corruption Perceptions Index (2011) 2/182 World Bank Doing Business Index (2012) 11/183 Safety & Security 3 12 Health 8 Education Top 30 Upper Middle (41) Lower Middle (41) Bottom 30 PROSPERITY INDEX: DATA IN FOCUS 16 ECONOMY Finland Global Av. 5 year growth rate (2010) 0.6% 2.7% Confidence in financial institutions?* (% yes) (2011) 71.7% 61.9% Satisfaction with living standards?* (% yes) (2011) 80.1% 59% 3 ENTREPRENEURSHIP & OPPORTUNITY Business start-up costs (% of GNI) (2011) 1.0% 36.3% Mobile phones (per 100 ppl) (2011) 166.0 98.7 Will working hard get you ahead?* (% yes) (2011) 82.1% 81.1% 5 GOVERNANCE Confidence in the government?* (% yes) (2011) 58.8% 53.7% Confidence in the judiciary?* (% yes) (2011) 69.8% 52.5% Government effectiveness 1 (2010) 2.24 0.03 8 EDUCATION Pupil to teacher ratio (2009) 14:1 25:1 Satisfaction with education quality?* (% yes) (2011) 89.1% 66.6% Perception children are learning?* (% yes) (2011) 95.2% 70.4% 12 HEALTH Finland Global Av. Self-reported health problems?* (% yes) (2011) 23.9% 23.9% Hospital beds* (per 1000 people) (2009) 6.2 3.2 Satisfaction with health?* (% yes) (2011) 80.7% 78.8% 3 SAFETY & SECURITY Human flight 2 (2011) 2.5 5.4 Safe walking at night?* (% yes) (2011) 80.8% 61.9% Property stolen?* (% yes) (2011) 8.4% 16.8% 19 PERSONAL FREEDOM Civil liberties 3 (2011) 7 4.8 Tolerance for immigrants?* (% yes) (2011) 73.3% 65% Satisfaction with freedom of choice?* (% yes) (2011) 93.6% 73.4% 5 SOCIAL CAPITAL Rely on others?* (% yes) (2011) 93.8% 80.6% Donations?* (% yes) (2011) 49.7% 28% Help strangers?* (% yes) (2011) 58.2% 45.7% NOTES: 1 Gov. effectiveness: values range from -1.73 to 2.25, higher values indicate higher effectiveness. 2 Human flight: values range from 1 to 10, higher values indicate higher levels of human flight. 3 Civil liberties: values range from 1 to 7, lower values indicate lack of civil liberties. *Survey data are taken from Gallup World Poll. Norway 1 Denmark 2 Sweden 3 Finland 7 Netherlands 8 Switzerland 9 Ireland 10 Luxembourg 11 United Kingdom 13 Germany 14 Iceland 15 Austria 16 Belgium 17 France 21 Spain 23 Malta 25 Portugal 26 Cyprus 30 Italy 33 Greece 49 REGIONAL RANKING EUROPE

1 NORWAY THE 2012 LEGATUM PROSPERITY INDEX RANKING COUNTRY FACT SHEETS COUNTRY OVERVIEW Oslo Global Av. Population (million) (2010) 4.90 N/A Life expectancy (years) (2010) 81.0 69.6 Birth rate (per year per 1000 people) (2010) 13 22 Fertility rate (births per female) (2010) 2.0 2.8 Life satisfaction* (rated 0 > 10) (2008) 7.6 5.5 Female representation in the legislature (2011) 39.6% 19.5% Internet access at home? (2011) 92.2% 34.2% Satisfied with job/work?* (% yes) N/A 73.3% People are treated with respect in your country* (% yes) (2008) 90% 85.1% GDP per capita (ppp) (2010) $57,230.90 $14,774.73 INDEX COMPARISONS Rank/ No. of countries Legatum Prosperity Index 1/142 Average Life Satisfaction Ranking* (2008) 2/142 Per Capita GDP Ranking (2010) 3/142 WEF Global Competitiveness Index (2011) 16/142 UN Human Development Index (2011) 1/187 SUB-INDEX RANKINGS 2 Economy Social Capital 1 Personal Freedom 6 Entrepreneurship 4 & Opportunity 13 Governance Heritage/WSJ Economic Freedom Index (2011) 30/179 TI Corruption Perceptions Index (2011) 6/182 World Bank Doing Business Index (2012) 6/183 Oslo Safety & Security 2 4 Health 6 Education Top 30 Upper Middle (41) Lower Middle (41) Bottom 30 PROSPERITY INDEX: DATA IN FOCUS 2 ECONOMY Norway Global Av. 5 year growth rate (2010) -0.3% 2.7% Confidence in financial institutions?* (% yes) (2008) 75.6% 61.9% Satisfaction with living standards?* (% yes) (2008) 93.1% 59% 4 ENTREPRENEURSHIP & OPPORTUNITY Business start-up costs (% of GNI) (2011) 1.8% 36.3% Mobile phones (per 100 ppl) (2011) 116.8 98.7 Will working hard get you ahead?* (% yes) (2008) 93.4% 81.1% 13 GOVERNANCE Confidence in the government?* (% yes) (2008) 57.8% 53.7% Confidence in the judiciary?* (% yes) (2008) 80.6% 52.5% Government effectiveness 1 (2010) 1.79 0.03 6 EDUCATION Pupil to teacher ratio (2010) 11:1 25:1 Satisfaction with education quality?* (% yes) (2008) 81.4% 66.6% Perception children are learning?* (% yes) (2008) 92.6% 70.4% 4 HEALTH Norway Global Av. Self-reported health problems?* (% yes) (2008) 20.7% 23.9% Hospital beds* (per 1000 people) (2009) 3.3 3.2 Satisfaction with health?* (% yes) (2008) 84.6% 78.8% 2 SAFETY & SECURITY Human flight 2 (2011) 1.5 5.4 Safe walking at night?* (% yes) (2008) 84.5% 61.9% Property stolen?* (% yes) (2008) 11.9% 16.8% 6 PERSONAL FREEDOM Civil liberties 3 (2011) 7 4.8 Tolerance for immigrants?* (% yes) (2008) 88.8% 65% Satisfaction with freedom of choice?* (% yes) (2008) 94.7% 73.4% 1 SOCIAL CAPITAL Rely on others?* (% yes) (2008) 93.6% 80.6% Donations?* (% yes) (2008) 43.4% 28% Help strangers?* (% yes) (2008) 45.7% 45.7% NOTES: 1 Gov. effectiveness: values range from -1.73 to 2.25, higher values indicate higher effectiveness. 2 Human flight: values range from 1 to 10, higher values indicate higher levels of human flight. 3 Civil liberties: values range from 1 to 7, lower values indicate lack of civil liberties. *Survey data are taken from Gallup World Poll. Norway 1 Denmark 2 Sweden 3 Finland 7 Netherlands 8 Switzerland 9 Ireland 10 Luxembourg 11 United Kingdom 13 Germany 14 Iceland 15 Austria 16 Belgium 17 France 21 Spain 23 Malta 25 Portugal 26 Cyprus 30 Italy 33 Greece 49 REGIONAL RANKING EUROPE

3 SWEDEN THE 2012 LEGATUM PROSPERITY INDEX RANKING COUNTRY FACT SHEETS COUNTRY OVERVIEW Stockholm Global Av. Population (million) (2010) 9.40 N/A Life expectancy (years) (2010) 81.5 69.6 Birth rate (per year per 1000 people) (2010) 12 22 Fertility rate (births per female) (2010) 2.0 2.8 Life satisfaction* (rated 0 > 10) (2011) 7.4 5.5 Female representation in the legislature (2011) 45.0% 19.5% Internet access at home? (2011) 90.6% 34.2% Satisfied with job/work?* (% yes) (2011) 92.0% 73.3% People are treated with respect in your country* (% yes) (2011) 96% 85.1% GDP per capita (ppp) (2010) $39,024.20 $14,774.73 INDEX COMPARISONS Rank/ No. of countries Legatum Prosperity Index 3/142 Average Life Satisfaction Ranking* (2011) 9/142 Per Capita GDP Ranking (2010) 14/142 WEF Global Competitiveness Index (2011) 3/142 Stockholm UN Human Development Index (2011) 10/187 SUB-INDEX RANKINGS 5 Economy Social Capital 9 Personal Freedom 5 Entrepreneurship 2 & Opportunity 4 Governance Heritage/WSJ Economic Freedom Index (2011) 21/179 TI Corruption Perceptions Index (2011) 4/182 World Bank Doing Business Index (2012) 14/183 Safety & Security 6 14 Health 12 Education Top 30 Upper Middle (41) Lower Middle (41) Bottom 30 PROSPERITY INDEX: DATA IN FOCUS 5 ECONOMY Sweden Global Av. 5 year growth rate (2010) 0.7% 2.7% Confidence in financial institutions?* (% yes) (2011) 67.0% 61.9% Satisfaction with living standards?* (% yes) (2011) 92.5% 59% 2 ENTREPRENEURSHIP & OPPORTUNITY Business start-up costs (% of GNI) (2011) 0.6% 36.3% Mobile phones (per 100 ppl) (2011) 118.6 98.7 Will working hard get you ahead?* (% yes) (2011) 92.1% 81.1% 4 GOVERNANCE Confidence in the government?* (% yes) (2011) 67.2% 53.7% Confidence in the judiciary?* (% yes) (2011) 73.2% 52.5% Government effectiveness 1 (2010) 2.02 0.03 12 EDUCATION Pupil to teacher ratio (2009) 9:1 25:1 Satisfaction with education quality?* (% yes) (2011) 78.0% 66.6% Perception children are learning?* (% yes) (2011) 92.2% 70.4% 14 HEALTH Sweden Global Av. Self-reported health problems?* (% yes) (2011) 24.0% 23.9% Hospital beds* (per 1000 people) (2009) 2.8 3.2 Satisfaction with health?* (% yes) (2011) 82.1% 78.8% 6 SAFETY & SECURITY Human flight 2 (2011) 2.0 5.4 Safe walking at night?* (% yes) (2011) 80.8% 61.9% Property stolen?* (% yes) (2011) 11.5% 16.8% 5 PERSONAL FREEDOM Civil liberties 3 (2011) 7 4.8 Tolerance for immigrants?* (% yes) (2011) 89.3% 65% Satisfaction with freedom of choice?* (% yes) (2011) 94.1% 73.4% 9 SOCIAL CAPITAL Rely on others?* (% yes) (2011) 92.1% 80.6% Donations?* (% yes) (2011) 56.2% 28% Help strangers?* (% yes) (2011) 48.1% 45.7% NOTES: 1 Gov. effectiveness: values range from -1.73 to 2.25, higher values indicate higher effectiveness. 2 Human flight: values range from 1 to 10, higher values indicate higher levels of human flight. 3 Civil liberties: values range from 1 to 7, lower values indicate lack of civil liberties. *Survey data are taken from Gallup World Poll. Norway 1 Denmark 2 Sweden 3 Finland 7 Netherlands 8 Switzerland 9 Ireland 10 Luxembourg 11 United Kingdom 13 Germany 14 Iceland 15 Austria 16 Belgium 17 France 21 Spain 23 Malta 25 Portugal 26 Cyprus 30 Italy 33 Greece 49 REGIONAL RANKING EUROPE

THE LEGATUM INSTITUTE THE LEGATUM INSTITUTE Based in London, the Legatum Institute (LI) is an independent non-partisan public policy organisation whose research, publications, and programmes advance ideas and policies in support of free and prosperous societies around the world. LI s signature annual publication is the Legatum Prosperity Index, a unique global assessment of national prosperity based on both wealth and wellbeing. LI is the co-publisher of Democracy Lab, a journalistic joint-venture with Foreign Policy Magazine dedicated to covering political and economic transitions around the world.

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