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The Impact of Institutions and Development on Happiness

This paper demonstrates that institutional factors influence the subjective well-being of individuals differently in rich versus poor countries. A lower level of corruption, a more democratic government and better civil rights increase the well-being of individuals in rich countries, whereas an increase in per capita income has no impact. On the contrary, in poor countries the extent of corruption, democracy and civil rights have no influence on happiness, but an increase in per capita income impacts happiness positively. This stark contrast may be due to the difference of preferences over income and institutional factors.

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File URL: http://bus.lsu.edu/McMillin/Working_Papers/pap09_17.pdf
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Paper provided by Department of Economics, Louisiana State University in its series Departmental Working Papers with number 2009-17.

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Handle: RePEc:lsu:lsuwpp:2009-17
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  19. Simon Luechinger & Stephan Meier & Alois Stutzer, 2006. "Bureaucratic Rents and Life Satisfaction," IEW - Working Papers 269, Institute for Empirical Research in Economics - University of Zurich.
  20. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
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  26. Roberto Rigobon & Dani Rodrik, 2005. "Rule of law, democracy, openness, and income," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 533-564, 07.
  27. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
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  30. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, University of Bonn, ZEI - Center for European Integration Studies.
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  34. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
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