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The fall of the Berlin Wall twenty years ago this week sparked the beginning of Eastern Europe's move towards myriad different forms of capitalism. Some of the experiments in democratic capitalism, open markets, limited democracy and the rule of law worked very well (Czech Republic, Poland and Estonia) others have done less well (Bulgaria and Romania). Further to the east, Ukraine, Russia and Belarus have improved to be sure but have done even less well than their western neighbors. It's surprising how quickly the next generation has forgotten the depths of communism, and for many of these countries, it's incredible to see how far they've come in twenty years.

Simple measures of economic improvements do not explain whether these locations have become more prosperous. Hence the Legatum Institute's recently released 2009 Prosperity Index tells us far more of the story. The Index evaluates 104 nations--90 percent of the world's population--along nine major criteria including economic fundamentals, friendliness to entrepreneurial activities, democratic institutions and governance, health, education, social capital, personal freedom and safety and security. Experts from the world's leading Universities like Oxford and Harvard used objective data and subjective survey responses to score 79 different variables considered to be the foundations of true prosperity, which formed the nine major criteria. The aim of the Index is to assess what makes people around the world truly prosperous--both wealthy and happy.

The inevitable conclusion of the Index is that those countries that dumped the shackles of communism for a system of freedom and political transparency are much more likely to be prosperous.

Slovenia, once part of the Socialist Federal Republic of Yugoslavia, now earns an overall rank of 20th worldwide--outperforming western nations such as Italy, Portugal and Greece.

Indeed, many of the top forty nations include former communist nations. In order they are the Czech Republic (25th), Hungary (28th), Poland (29th), Estonia (31st), Slovakia (34th), Croatia (35th), and Latvia (37th).

The economic liberalization that swept through many of these countries in 1990 made them far more prosperous. Poland for example is one of the fastest growing economies in Central Europe. Prior to the current economic downturn, the country's unemployment rate was falling faster than the EU average. And even today, Poland's GDP continues to grow at a steady rate.

Unfortunately further to the East those countries which have shed only parts of communism in reality, even if rhetorically they claim otherwise, have done less well. Russia has embraced some economic reforms but has failed to allow democratic institutions to flourish, with rigged elections and assassinations of critics of Prime Minister Putin. Overall it lacks personal freedom, safety and decent health. As a result it lies in 69th place.

Ukraine scores badly on social capital and personal freedom too--but does better on other indicators and at least beats its former Soviet ruler, it lies 62nd. Belarus however, ranks a lowly 85th. Surrounded in the Index by corrupt and poverty stricken nations like Bangladesh and Senegal. Belarus's communist government controls prices and prevents businesses from functioning properly let alone flourishing.

Of course even Slovenia has a long way to go before it can assail the top of the pile. The Index finds that the small Nordic and Scandinavian countries dominated the top of the rankings, while large countries of the anglosphere such as Australia, Canada, and the United States landed in the top 10, UK in 12th, because of their combination of free-market capitalism and transparent democracy.

Germany comes in 14th overall, and is a wonderful reminder for those in the Eastern part of the country of how far they have come and how right they were to try to escape their country and then to have torn down the wall that symbolized their suppression.

In only one sub-index did the former Eastern bloc states rank badly overall--social capital, which measures community activity, trust of friends and neighbors and charitable support. Building such trust will be vital for the regions further improvement. But with memories of the Stasi and other secret police still very much alive it is understandable that this will take time. Once trust is built, many nations in the former Eastern bloc will move even further up the rankings, perhaps one day one will make the top ten.

Roger Bate is the Legatum Fellow in Global Prosperity at AEI.