World's best places to live

In 1999, when Austrians elected the far-right Freedom Party to second position in parliament, it brought on sanctions from the European Union based on the party’s hard-line anti-immigration, Austria-first agenda, and memories of Nazi governments of the 1930s and ‘40s. In the late ‘90s, Austria was mired in uncertainty about its direction and place within the EU, and social norms were upset.

It certainly wasn't the best time to live in the nation's capital, Vienna.

Yet 10 years later, with those internal and external conflicts firmly in the past, Vienna is again noted first for its arts and cultural institutions, such as the famed opera house, parks and continental architecture that line the Danube River. Skies are so sunny that Mercer, an international human resource consulting company, ranks Vienna No. 1 in the world for quality of life, and particularly notes the city's harmonious political and social environment as a reason why.

Times can change quickly, it seems.

Slide show:  The top 10 cities

Behind the numbers
European cities dominate Mercer's list, which rates 420 global cities on the basis of the political and social environment (including stability, crime and law enforcement); the strength of the economy; restrictions, such as censorship and limitations on personal freedom; the quality of health care as well as exposure to infectious diseases; and school quality. In addition, it looked at recreation, theaters, sports activities, access to grocery markets, the availability and cost of housing, as well as the climate and susceptibility to natural disasters.

It's a mouthful of criteria, to be sure. Cities were ranked on an index where New York City was 100. Vienna, for example, scored a 108.6, Zürich, Switzerland, came in second at 108, Geneva was next at 107.9 and Vancouver notched a win for North America by finishing fourth at 107.4.

At the bottom, by contrast, were Baghdad, at 14.4; Bangui, the politically corrupt capital of the Central African Republic, at 29.3;  and N'Djamena, Chad, notable for its difficult pronunciation and constant rebel attacks, at 31.3.

Honolulu, at 29^th, was the top-ranked U.S. city, followed by San Francisco, 30^th; Boston, 35^th; Portland, Ore., 42^nd; Washington, 44^th; New York, 49^th; and Seattle, 50^th.

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For the first time, Mercer also evaluated cities on the basis of their infrastructure, including electricity, water availability, telephone and mail services, public transportation, traffic congestion and the range of international flights from local airports.

Infrastructure was a category that propelled many German cities toward the top of the table. After Munich, which notched the second spot in that category, Düsseldorf finished sixth and Frankfurt eighth, followed by Berlin at No. 16.

"German city infrastructure is among the best in the world," said Slagin Parakatil, senior researcher at Mercer, adding particular praise for the fast connections available to international destinations.

Credit goes to the high priority German cities place on urban mobility, especially trains, which are seen as instrumental to attracting and developing business in Europe's largest economy. Maria Krautzberger, permanent secretary of the Berlin Senate Department for Urban Development, told Forbes that the ability for companies to connect to global business networks of suppliers and customers makes infrastructure an essential competitive advantage for cities.

Infrastructure improvement, particularly in high-speed rail, has also been a priority of the Obama administration, which allocated $8 billion of the $787 billion stimulus package to the cause of six possible high-speed corridors around the nation.

But the United States is a bit behind the curve. Germany, for example, has had high-speed rail since 1991. In Japan, the Shinkansen, the country's high-speed network, has operated since 1964.

While the Obama administration has focused its support for such networks through the creation of jobs and easing of congestion, the long-term competitive advantage that cities gain as the result of such linkages has the potential to be its longest-term benefit. Of course, that's assuming the projects are completed and the U.S. doesn't bankrupt itself with deficit spending.

Minor details.

World’s 10 best places to live

See how the cities stacked up in quality of life and infrastructure, and how their rankings compare to last year.

1. Vienna
2. Zürich
3. Geneva
4. (tie) Vancouver, Canada
4. (tie) Auckland, New Zealand
6. Düsseldorf, Germany
7. Munich
8. Frankfurt
9. Bern, Switzerland
10. Sydney

Click here for the full list of the world's top 20 places to live on Forbes.com.

This article was written by Matt Woolsey of Forbes.