The U.S. fell from the top ten of the Legatum Institute’s 2012 Prosperity Index. The sixth-annual index, which includes 142 countries—96 percent of the world’s population and 99 percent of global gross domestic product, assesses nations’ prosperity based on economy; education; entrepreneurship and opportunity; governance, health, personal freedom; safety and security; and social capital factors.

“As the U.S. struggles to reclaim the building blocks of the American Dream, now is a good time to consider who is best placed to lead the country back to prosperity and compete with the more agile countries,” Jeffrey Gedmin, the Legatum Institute’s president and chief executive officer, said in a statement.

Not only did the U.S. fall from the global prosperity “top ten” for the first time, but it fell eight places in the “entrepreneurship and opportunity” category. According to the Legatum Institute, fewer U.S. citizens believe hard work turns into success the way it used to.

“As the race for the White House reaches fever pitch, the latest findings from the Legatum Institute’s Prosperity Index reveal that the American Dream is in jeopardy,” noted the report. “In an unprecedented fall, America drops to twelfth position in the worldwide prosperity rankings – with weakening performance across five of the Index’s eight sub-categories.”

Norway and Denmark claimed the top two positions on the index, followed by Sweden, Australia, New Zealand, Canada, Finland, the Netherlands, Switzerland and Ireland in the tenth spot. The bottom-ranking nation was the Central African Republic. Switzerland also received top ranking for its economy and governance. Denmark was named most entrepreneurial and New Zealand was recognized for having the best education system. Iceland was named the safest nation and Luxembourg the healthiest. Norway received first place in the social capital category while Canada was named the nation with the most personal freedom.

“The Legatum Prosperity Index allows us to paint a comprehensive picture of what makes a country truly successful, encompassing traditional measures of material wealth, as well as capturing citizens’ sense of wellbeing – from how safe they feel, to their perceived personal freedom. GDP alone can never offer a complete view of prosperity,” Gedmin said.

The Legatum Institute is part of Dubai-based investment firm Legatum Group, founded by New Zealand billionaire Christopher Chandler.

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