What is happiness? Whatever happiness is to you, there are some conditions under which it most readily blossoms.

World-PuzzleA few years ago the directors of the Legatum Institute (part of billionaire Christopher Chandler’s Dubai-based Legatum Group) were thinking about the wealth of nations. “We found ourselves asking two questions,” says spokesman Julian Knapp. “First, why have some nations — given a similar start — become more successful and wealthier than others? And having recognized that life is about more than simple material satisfaction, the second question: why are some nations happier and more satisfied than others?” Indeed why had Ghana and South Korean, having shared similar GDP’s in the 1950s, gone in such different directions, with Korea’s now $39,000 per capita and Ghana’s just $3,000.

After studying 40 years of data and outcomes, they settled on eight areas – the ingredients of prosperity: economy, entrepreneurship, governance, education, health, safety, personal freedom and social capital. Then they looked for reliable data from the likes of the Gallup polling organization that would let them rank countries on their performance in these areas. Add up the scores and you get the Legatum Prosperity Index.

In its recently released 2011 index, billed as an “inquiry into global wealth and well being,” Legatum ranks 110 countries on their overall level of prosperity. These countries comprise 93% of global population and 97% of GDP.

Top Five Happiest Nations
1. Norway
2. Denmark
3. Australia
4. New Zealand
5. Sweden

Top Five Saddest Nations
1. Uganda
2. Cameroon
3. Rwanda
4. Iran
5. Tanzania

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Source: Christopher Helman | Forbes