Denmark is number two on the Wealth of Nations Index (WNI) – a ranking developed by the Warsaw Enterprise Institute (WEI) as an alternative benchmark for well-being in relation to GDP. This is an increase of two places since the last index in 2015.
The survey covers 25 European nations, and the final score – a figure between 0 and 100 – is based on the level of private spending and the quality of public spending across seven categories.
Denmark with 98.8 in total was sent to the position of Austria, whose score of 100 will be used as a reference point for future indices. The Danes beat the Dutch to third place and the Germans to fourth.
How is it calculated?
Every year, citizens in Europe use goods and services. They buy some of them personally and the rest is provided by the government. WNI is the sum of these two expenses.
Private spending is believed to be optimal: individuals spend funds in the ‘best’ way for them. Public spending is evaluated according to the WEI’s public expenditure quality index ‘- a new measure based on the OECD’s classification of government functions (COFOG). Money spent on successful industries is more ‘valuable’ and weighted accordingly.
A closer look at Denmark’s score
The seven categories of the public expenditure quality index were national defense, internal security, infrastructure and public transport, environment, health care, education and universities.
Denmark excelled in public spending. Excellent industries included environment, healthcare, education and universities. They criticized their lowest score for infrastructure and national defense.
In the category private expenses per. Inhabitant took Danes third place behind Ireland and Austria.
General remarks
The four top countries – Austria, Denmark, the Netherlands, Germany – are all characterized by significant private finances and high-quality public services.
The total amount of public expenditure is a good predictor of quality; countries that spend a lot on public services generally achieve high quality services.
Interestingly, nations lower on the WNI also score poorly on the Human Development Index – a quality of life index used by the UN.
Finally, it is noteworthy that the WEI deliberately presents the situation to countries before the outbreak of the coronavirus pandemic.
See the total location below:
Note that because Ireland’s GDP is inflated by its tax haven status, it is excluded from the survey. Its score is still calculated even though it is abnormally high.
Source: The Nordic Page