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

  • Christian Bjørnskov

    ()

    (Department of Economics, Aarhus School of Business, University of Aarhus, Denmark)

  • Axel Dreher

    ()

    (KOF Swiss Economic Institute, ETH Zurich)

  • Justina A.V. Fischer

    ()

    (Department of Economics, Stockholm School of Economics, Stockholm, Sweden)

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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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 08-192.

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Length: 41 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:kof:wpskof:08-192
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