How Nations Succeed; a report from the Legatum Institute explores why some nations fail while others succeed

Creating pathways from poverty to prosperity is a goal for many national leaders and public and private international development organisations. But much is still to be understood about what is needed to realise this common ambition.

Colombia photo

The Legatum Institute has published a new report – ‘How Nations Succeed’ – providing an in-depth analysis of the choices and steps made by countries that have had successful journeys towards prosperity. It addresses a question that lies at the heart of development policy – why do some nations fail while others succeed?

Through exploring the contrasting development trajectories of 10 countries over the last 60 years, the report has identified three key areas that require focus: forging a strong social contract, building open economies, and investing in human capital.

Forging a strong social contract

A strong social contract binds together a nation’s leaders and its population, creating an environment of stability and a shared identity. Leaders must demonstrate to citizens that the benefits of formal government outweigh the alternative by providing security, delivering on national priorities and persuading every citizen that the government exists to promote the prosperity of all.

Building open economies

To successfully develop, countries must achieve and sustain robust levels of economic growth. An economy must be established, which is well-managed and resilient to shocks, in which people feel they have a stake. Nations that act decisively to make economies more internationally competitive will lay the foundations for greater diversification and progress.

Investing in human capital

Nations must create socio-economic conditions in which populations can fulfil their potential; becoming healthier and better educated is the mark of a well-functioning society. Providing universal education is integral, and nations that have made the most progress are those willing to adopt innovative approaches to capacity-building, working with donors and private providers to open new schools and train teachers. Nations must also develop a healthcare system with sufficient capacity to provide quality interventions and is accessible to all.

Ultimately, these three areas all underscore the profound influence of strong national leadership on the trajectory and rate of a country’s development. Success depends on an individual's willingness or set of individuals to place long-term national priorities over immediate personal or political gain.

The Legatum Institute designed the report to help policymakers, business leaders, and philanthropists map out the steps required to lift countries out of poverty. While it is difficult to fully determine the development process, the adoption of a minimum viable policy in the key areas highlighted will likely result in a pathway to prosperity over the course of decades.

Read the full report here.

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