Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence

Christian Bjørnskov, Axel Dreher and Justina A. V. Fischer

MPRA Paper from University Library of Munich, Germany

Abstract: A long tradition in economics explores the association between the quality of formal institutions and economic performance. The literature on the relationship between such institutions and happiness is, however, rather limited, and inconclusive. In this paper, we revisit the findings from recent cross-country studies on the institutions-happiness association. Our findings suggest that their conclusions are qualitatively rather insensitive to the specific measure of ‘happiness’ used, while the associations between formal institutions and subjective well-being differ among poor and rich countries. Separating different types of institutional quality, we find that in developing countries the effects of economic-judicial institutions on happiness dominate those of political institutions, while analyses restricted to middle- and high-income countries show strong support for an additional beneficial effect of political institutions. Our results bear important implications which we discuss in the concluding section of the paper. This paper is the 2010-update of Bjørnskov, Dreher, Fischer (2008), Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence, Working Paper Series in Economics and Finance 699, Stockholm School of Economics.

Keywords: Happiness; life satisfaction; well-being; quality of life; institutions; democracy; rule of law; political constraints; policy implications (search for similar items in EconPapers)
JEL-codes: H10 H40 I31 (search for similar items in EconPapers)
Date: 2008, Revised 2010-02-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (150)

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Related works:
Journal Article: Formal institutions and subjective well-being: Revisiting the cross-country evidence (2010)
Working Paper: Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence (2009)
Working Paper: Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence (2008)
Working Paper: Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence (2008)
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