EconPapers    
Economics at your fingertips  
 

Do Good Institutions Make Citizens Happy, or Do Happy Citizens Build Better Institutions?

Martin Rode

Journal of Happiness Studies, 2013, vol. 14, issue 5, 1479-1505

Abstract: Recent empirical investigations show that ‘good institutions’, in the form of democracy and economic freedom, are related to elevated scores of subjective well-being across countries. Most of these studies automatically assume that causality runs from formal institutions to happiness. None the less, an inverse relationship is also feasible and only a few authors have specifically analyzed this possibility. Furthermore, not much is known about the individual aspects of institutions that are valued by citizens, and how these preferences might change with the level of economic development. This paper contributes to closing these gaps, conducting ordinary least squares- and instrumental variable analysis as an empirical strategy. Results show that citizens in developing countries value the procedural aspects of democracy, access to sound money, and free trade, while citizens in developed countries only seem to value a comparatively well-functioning legal system and higher security of property rights. Findings indicate the existence of a causal channel from economic freedom to well-being, but can’t exclude a long run effect of intrinsic happiness on economic freedom through social capital. Copyright Springer Science+Business Media Dordrecht 2013

Keywords: Subjective well-being; Economic freedom; Democracy; Causality (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s10902-012-9391-x (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jhappi:v:14:y:2013:i:5:p:1479-1505

Ordering information: This journal article can be ordered from
http://www.springer. ... fe/journal/10902/PS2

DOI: 10.1007/s10902-012-9391-x

Access Statistics for this article

Journal of Happiness Studies is currently edited by Antonella Delle Fave

More articles in Journal of Happiness Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-07-26
Handle: RePEc:spr:jhappi:v:14:y:2013:i:5:p:1479-1505