The Legatum Institure's 2011 index of the world's most prosperous nations(Image: Owen Humphries - PA Archive)

A new survey has ranked Norway as the most prosperous nation on earth, with the UK lagging in 13th place.

The 2011 Legatum Prosperity Index ranks nations on aspects such as the strength of the economy, education, personal freedom, governance and safety and security.

Norway has now topped the survey for four years running, followed by Denmark in second. Australia has jumped one spot to third on the list, followed by New Zealand in fourth and Sweden in fifth.

Here's the full top 10:
1) Norway
2) Denmark
3) Australia
4) New Zealand
5) Sweden
6) Canada
7) Finland
8) Switzerland
9) The Netherlands
10) USA

See the full report here

UK economy weakens score
Given the parlous state of our finances, it's perhaps unsurprising that the UK scored lowly in the economic category, ranking 21st overall. It also ranked relatively low in safety and security (23rd) and education (19th).

The nation did, however, rank highly for entrepreneurship and opportunity (4th) and governance (8th).

Elsewhere, Ireland was ranked 11th on the list, scoring strongly in safety and security (3rd) and personal freedom (9th).

Overall, the nation that scored lowest was the Central African Republic, with Zimbabwe second last and Ethiopia one place higher.

Why the index was constructed
The Prosperity Index was created by thinktank the Legatum Institute and aims to assess a nation's prosperity based on both income and wellbeing.

"Our purpose is to promote a holistic understanding of national prosperity by providing a framework for its measurement that will be useful to policymakers, scholars, and the globally curious," Legatum said.

"Traditional measures of national prosperity are based entirely on indicators of a country's income, yet most human beings understand intuitively that 'prosperity' is not just about money, it is also about satisfaction with our lives and our future prospects."

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