Vanuatu is part of a vast sprawling Pacific archipelago described as "the happy isles of Oceania" by author Paul Theroux.
The UK-based New Economics Foundation (NEF) aimed to measure the environmental efficiency of global progress with its "Happy Planet Index" report, which it said painted a different order of world wealth but showed all countries could do better.
"The Happy Planet Index strips the view of the economy back to its absolute basics: What we put in (resources), and what comes out (human lives of different length and happiness)," the NEF said.
The Group of Eight (G8) leading industrialised nations which is meeting on July 15-17, failed to make the top 50.
Host Russia came in at 172 in the 178-nation survey, with the United States at 150 and Britain at number 108.
Consumption poor guide
The NEF, an independent group that did the index jointly with UK-based green campaign group Friends of the Earth, said the report showed high levels of resource consumption do not reliably produce high levels of well-being.
"The order of nations that emerges may seem counter-intuitive. But this is because policy makers have been led astray by abstract mathematical models of the economy that bear little relation to the real world," said Andrew Simms, the NEF's policy director.
NEF said central America was the region with the highest average score, combining good life expectancy of 70 years with an ecological footprint below its fair share, while island nations scored above average and Switzerland came top in Europe.
Out of the Asian nations, Vietnam came highest at number 12 and Singapore was ranked lowest at 131. African countries made up seven of the bottom 10, with Zimbabwe coming last.