According to the 2023 report of the Legatum Prosperity Index, Hungary ranks 42nd – an improvement of one position compared to last year – which examines welfare conditions in the world. The index uses the same indicators for 167 nations and combines them in the same way to create elements and pillars. The index compares the relative performance of each country in terms of overall well-being and each of the 12 pillars of well-being, such as investment climate, health, education and social capital, as well as the 67 elements within the pillars.
The Hungarian data is interesting because in the narrowly interpreted region, only Romania, Bulgaria, Serbia and Bosnia-Herzegovina are behind us in the ranking, while Croatia has overtaken us,
they are ranked 41st worldwide, while last year they were 44th. But Poland moved up to 37th, Slovakia to 35th, Slovenia to 27th and the Czech Republic to 25th. The biggest improvement can be seen in the Baltic states, because Estonia is already the most developed of the Eastern European countries and ranks 21st, Latvia is 31st, Lithuania is 32nd. .
Denmark still leads the ranking, Sweden is second, Norway is third, and Finland is fourth, just ahead of Switzerland. Among the large European economies, the Germans are the best, in 9th place, while France is 23rd, Spain is 24th and Italy is 30th.
Hungary is criticized for the quality of governance
The list does not rank the prosperity of each country based on the income situation alone, but the elements have been selected in such a way that, in order to promote more targeted action, key policy areas such as investor protection, the quality of primary education, the integrity of the government, or just the level of air pollution. They classify what the social care system is like, how accessible it is to people, what the inequality conditions are like, or the redistribution within society, the housing conditions. They rank freedom of the press, the opportunities for citizens to assert their basic rights, as well as economic factors such as the openness of markets or the opportunities of the entrepreneurial class.
According to the researchers’ argument, the different freedoms are emphasized in the ranking, because if societies are inclusive and political equality is extensive, it is more likely that the creation of wealth in a functioning economy will be more widespread, which makes personal prosperity easier. “As citizens become more empowered, they are more inclined to increase their demand for government services that support their well-being. In an accountable society, public services such as health care and education will be provided by governments as they seek the approval and re-election of citizens. This it leads to a prosperous society and thus to greater prosperity,” says the justification.
In the case of Hungary, however, the government’s performance received the worst score, so it performs below the world average in several factors: the quality of the government’s activities is 76th, the enforcement of individual freedoms is 92nd, and the quality of the business environment is ranked 96th globally. The performance of education and healthcare is well below the European average, the former is 46th and the latter 41st in the global ranking. All of this is strongly due to the fact that, since the government’s power is secured, it tends to suddenly change policy regulations, but is not interested in improving the quality of the care system.
Although the Hungarian government decided on a number of investor-friendly measures, it is easy to list examples that show that the market situation in certain sectors can change very quickly. These are not detailed in the report, but based on the evaluations of other organizations, it is likely that behind Legatum’s weak evaluation are changes such as the introduction of sectoral special taxes or, for example, the decision to cancel membership of the medical association, which took place within two days after the announcement of the draft law. passed the parliament.
Is Hungary a negative example?
In Europe, the authors of Legatum’s research single out Hungary as a negative example, as according to their investigation, there has been a step back in the country’s democratic systems. Limits on executive power and political accountability have declined significantly over the past decade. This year, Hungary ranks 113th in the former and 91st in the latter.
In terms of independent and non-governmental control of government power, this Eastern European country ranks 148th. Based on the Freedom House report, they find the basic democratic institutional system weak and the enforcement of freedom of speech significantly limited.
In connection with the rapid and unexpected legislation, it is mentioned that in recent years the Hungarian government rewrote several elements of the constitution and gave significantly more power to the reigning government – that is, to itself.
This allowed the government to quickly replace civil servants, reshuffle constituencies and install loyalists in key positions, including the Constitutional Courts.
As noted, Hungary is not the only country where the quality of democratic governance has deteriorated. Turkey is also mentioned, where the current government has been in power since 2002. As the Freedom House report notes, after initially adopting some liberalizing reforms as prime minister, Recep Tayyip Erdogan, the government has engaged in widespread repression of critics and opposition since 2016. For example, Amnesty International points out that hundreds of people, including journalists, social media users and protesters, were detained in Turkey in 2019 for criticizing Turkey’s military offensive in Syria.
Negative trends are also strong globally
Whether or not most countries hold elections, democratic institutions are weakening around the world. Constraints on executive power have worsened in all regions except Western Europe, and the extent to which executive power is effectively constrained by the judiciary and legislature has declined.
Many countries in Europe illustrate this trend well, their governments are practicing less and less democratic practices. The same is true for civil liberties. In the past decade, personal liberties have deteriorated in 108 countries, with increasing hostility to freedom of assembly and association, freedom of speech and access to information. Censorship has become more common worldwide, including in democratic countries.
According to the authors of the report, the return of real politics could have profound consequences for welfare. The decline of democratic institutions comes at a time when democracies are facing external challenges from actors such as the Kremlin and Beijing. In the 1990s, it was believed that liberal democracy brought the “end of history”, but today, when the conflict with China has escalated to the level of war in the Taiwan Strait and Russian tanks are trying to invade Ukraine, the political and ideological map has changed significantly.
Realpolitik is back, and the liberal international order is facing a serious challenge for the first time since the Cold War. Many aspects of well-being beyond security are determined by events on the international stage – including energy prices, trade, education, health care and even personal freedom
– write Legatum experts.
If globalization were to decline in these tense geopolitical times, it would have harmful consequences for everyone. According to the creators, the year 2022 showed the severe effects of the world’s dependence on Russia for energy and raw materials, where the constraints of the global supply chain led to a spike in inflation. The most developed countries are doing well, but many developing economies are facing serious problems.
Examining the upper group of the index and analyzing the state of Western welfare, we find that welfare stagnates in the richest countries. Although in the long term Western liberal democracies have consistently performed well in many indicators, there are also signs of fragility – the researchers add.
Real incomes for lower-status workers are stagnating or falling because they have not been able to adjust to major economic changes, such as accelerating inflation worldwide. As a result, the feeling of “being left behind”, citizens’ dissatisfaction with the performance of democracies, and the rise of populism are growing.
Since the mid-1990s, the proportion of citizens who are “dissatisfied” with the performance of their country’s democracy has increased by nearly 10% worldwide.
Different economic trajectories within countries combine in a harmful way with the decline of social capital. Symptoms of malaise – from increasing loneliness and mental health struggles to declining institutional trust – are the result of a decline in the core characteristics of liberal democracy – virtue, community and national identity.
However, overall, the welfare situation in the Western world is improving because the social systems are more inclusive, and the accessibility and quality of the care systems are significantly better than in other parts of the world.
At the same time, the situation of personal freedom worsened in 108 countries worldwide, so this analyzed pillar deteriorated the most in the last decade. It deteriorated the most in Central and South Asia, African and Middle Eastern countries, and Eastern Europe. Moreover, there is no sign of easing: the countries that started from a lower reference value fell more than the others. In other words, the worse the original situation, the faster the conditions continue to deteriorate.
Hostility to the freedoms of assembly and association on the part of governments is noticeably increasing around the world, but the situation of freedom of speech and access to information is also deteriorating. The media is facing increasing government censorship, and governments are increasingly restricting people’s right to free assembly, even in Europe – according to the findings of a previous Liberties report, for example, many Western governments have used the epidemic restrictions due to the coronavirus to prevent demonstrations.
The 2023 Legatum Prosperity Index concluded for the third year in a row that welfare conditions are stagnating worldwide, the primary cause of which is the weakening of social institutions and the general tendency of democratic processes to deteriorate.
Overall, however, there is an improvement in well-being
People’s quality of life has continued to improve at the most basic level worldwide over the past decade, with the least prosperous countries also seeing progress and catching up with the rest of the world in all areas of living conditions, including healthier diets, access to basic services, housing, communication and protection from harm.
The situation of education has improved on a global average, the number of higher educations is increasing and progress is also visible in the field of skills acquired in adulthood.
In addition, health care continues to improve and converge in all countries, despite the setbacks caused by the pandemic. Death rates are much lower today than they were 10 years ago.
At the same time, the authors of the Legatum report also found that the potential of the world’s least prosperous countries is currently not being exploited. Although the world’s least prosperous states are showing signs of improvement, their potential is greater than they are being exploited. In the past ten years, only four countries have moved up the list, having previously been ranked among the 40 worst states by the report.
Apart from the areas that are easier to fix with the help of technology and basic interventions, the development of welfare conditions differed. In 6 of the 12 pillars, the situation of the bottom 40 countries worsened, while the rest of the world improved on average. Although the group of poor states has seen improvements in some areas, progress has not been fast enough to catch up with the rest of the world.
Cover photo: Ruben Earth/Getty Images.