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

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  • Bjørnskov, Christian

    ()
    (Dept. of Economics, Aarhus School of Business, University of Aarhus)

  • Dreher, Axel

    ()
    (ETH Zurich, KOF Swiss Economic Institute)

  • Fischer, Justina AV

    ()
    (Dept. of Economics, Stockholm School of Economics)

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. In this paper, we revisit the findings from recent cross-country studies on the institutions-happiness association. Our findings suggest that the conclusions reached by previous studies are fairly sensitive to the specific measure of ‘happiness’ used. In addition, the results indicate that the welfare effects of policies may differ across phases of a country’s economic development. This bears important policy implications which we discuss in the concluding section of the paper.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 699.

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Length: 38 pages
Date of creation: 02 Apr 2008
Date of revision:
Handle: RePEc:hhs:hastef:0699

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Keywords: Happiness; Well-Being; institutions; policy implications; democracy; rule of law; government efficiency;

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