For the second year in a row, the Legatum Institute's 2014 Prosperity Index ranks the Nordic country ahead of the Swiss in a ranking based on eight factors.
These include economy, entrepreneurship, governance, education, personal freedom, health, security and social capital.
Switzerland comes ahead of New Zealand, Denmark, Canada, Sweden, Australia, Finland, the Netherlands and the United States.
The Index covers 142 countries, representing more than 96 percent of the world’s population and 99 percent of global GDP.
The Central African Republic rates as the least prosperous place on the planet, just ahead of Chad and the Democratic Republic of the Congo.
Switzerland ranks tops for its economy and governance, but falls down in areas such as education (ranked 21st) and personal freedom (12th), according to the prosperity index.
Norway ranks best for social capital (third) and scored highly in all other categories.
The British-based Legatum Institute said by its reckoning Switzerland has been the best governed country in the world for the past six years.
The country has continued to improve in this area, the institute said.
Its ranking is unchanged from last year but is down from 2012 when it placed first.
The report highlights the fact that more of Europe is going economically backward rather than forward, with only eight of 33 countries surveyed advancing in the past six years.
The index claims to be unique in measuring prosperity as a “combination of wealth and wellbeing”.
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