The Secret of Prosperity

Where would you rather live – Zambia or Zimbabwe?  Not much of a choice perhaps but, according to the Legatum Institute’s Prosperity Index, you would have a better chance of a prosperous life under Robert Mugabe.

The Legatum Institute, which Michael visited recently, is located in rather swanky offices in London’s fashionable Mayfair district (with another office in Dubai) and funded by reclusive New Zealand billionaire philanthropist Christopher Chandler, whose Legatum Capital investment fund claims to be building ‘trust-based capital markets’ (legatum means ‘bequest’ in Latin). He made his fortune investing with his brother in firms such as SK Corp, a huge South Korean oil firm, and Russian gas giant Gazprom. 

As well as the Institute, there is also Legatum Ventures, which is pioneering for-profit investments in the developing world, the Legatum Foundation, which makes grants to a range of health and humanitarian projects, and the Legatum Center at MIT, run by Iqbal Quadir, the man behind Grameenphone in Bangladesh, which is promoting technology-based, for-profit enterprises in the developing world. Oh, and don’t forget the $1m a year Legatum Fortune Technology Prize, established with Fortune magazine to encourage for-profit attempts to use technology to help people in the developing world. Chandler certainly takes seriously both halves of philanthro-capitalism.

The Prosperity Index is an attempt to widen the debate about development from existing measures like Gross Domestic Product per capital, or Human Development as measured by the United Nations, to include things like the environment for entrepreneurship and depth of religious belief. There is plenty to disagree about in the rankings, to say the least, but it is an interesting contribution to the debate.