Finland scores highly across most indicators, and as a result joins Austria in second place.

Finland is noted for its progressive social policies, and it has one of the highest levels of educational attainment and lowest incarceration rates in the world.

Finns have also tended to give high priority to environmental issues, and are world leaders in lowering pollution and ensuring sustainable development.

Finland has transformed itself, from a predominantly agrarian economy at the end of World War II, to a sophisticated modern state with per capita income levels to rival any country in Europe.

Despite this, growth is restricted by one of the oldest populations in the European Union and an inflexible labour market.

Image: Juha Hirvie, Finland's flag bearer, parades in front of his delegation during the 2008 Beijing Olympic Games opening ceremony on August 8, 2008 at the National Stadium in Beijing. | Photograph: William West/AFP/Getty Images

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