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When Does Economic Freedom Promote Well Being? On the Moderating Role of Long-Term Orientation

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  • Johan Graafland

    (CentER/Tilburg Sustainability Center, Tilburg University)

Abstract

An increasing volume of literature has shown that economic freedom is related to life satisfaction. However, life satisfaction may not fully describe well-being because of its subjective nature. This study contributes to previous literature by extending analysis of the relationship between economic freedom and life satisfaction to other dimensions of well-being as measured by the better life index of the OECD that includes both objective and subjective measures. A second innovation of this paper is that, in explaining the differences in well-being between countries, we conjecture that the relationship between free market institutions as measured by economic freedom and well-being is moderated by the cultural dimension of long-term orientation. This hypothesis is supported for six out of 11 dimensions of well-being: income, community, health, life satisfaction, safety, and work—life balance. Our study shows that looking at interdependencies between culture and formal institutions can increase the explanatory power of internationally comparative research into well-being.

Suggested Citation

  • Johan Graafland, 2020. "When Does Economic Freedom Promote Well Being? On the Moderating Role of Long-Term Orientation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(1), pages 127-153, May.
    • Handle: RePEc:spr:soinre:v:149:y:2020:i:1:d:10.1007_s11205-019-02230-9
    DOI: 10.1007/s11205-019-02230-9
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    1. Graafland, Johan, 2023. "Economic freedom and life satisfaction: A moderated mediation model with individual autonomy and national culture," European Journal of Political Economy, Elsevier, vol. 79(C).
    2. Danuta Milaszewicz & Kesra Nermend, 2020. "Application of Vector Measure Construction Methods to Estimate Quality of Institutions: Nations in Transition," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 16-29.
    3. Chinazaekpere Nwani & Festus Victor Bekun & Phillips O. Agboola & Philip C. Omoke & Ekpeno L. Effiong, 2023. "Industrial output, services and carbon emissions: the role of information and communication technologies and economic freedom in Africa," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(4), pages 3299-3322, April.
    4. Graafland, Johan & de Jong, Eelke, 2022. "The moderating role of culture on the benefits of economic freedom: Cross-country analysis," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 280-292.
    5. Alexandra-Cristina Sirbu & Andreea-Oana Iacobuță-Mihăiță & Mircea Asandului & Madalina-Maria Brezuleanu, 2023. "Effects of Economic Freedom on Subjective Well-Being," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 70(SI), pages 85-97, February.
    6. Olalekan C. Okunlola & Olumide A. Ayetigbo, 2022. "Economic Freedom and Human Development in ECOWAS: Does Political-Institutional Strength Play a Role?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 1751-1785, September.

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