The Impact of Prosperity on Economic Development: Evidence from Low and High Prosperity Countries

This thesis attempts to empirically investigate the role of prosperity in economic development in low and high prosperity countries classified according to their prosperity rank in 2014. Panel regression analysis technique was conducted to estimate the relationship between prosperity and economic development in low and high prosperity countries using a sample of 105 countries over the years between 2009 and 2014. The regression results show a positive relationship between prosperity sub-indices and economic growth. The results also show that Economic Fundamentals, Social Capital and Health have greater effects on economic growth in high prosperity countries whereas the effect of Education, Governance and safety are greater in low prosperity countries. Keywords: Economic Development, Prosperity, Panel Unit Root, OLS Regression, Granger Causality Test