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Quality of government and subjective poverty in Europe

Author

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  • Massimo Baldini

    ()

  • Vito Peragine

    ()

  • Luca Silvestri

    ()

Abstract

We study the effect of quality of government on subjective poverty across European countries and regions, taking advantage of recently released data on the quality of public institutions at the regional level, and of information on household subjective poverty. In the analysis we try to separate the effects of quantity and quality of public services on perceived well-being, controlling for the size of the local government and for the receipt of in-kind services by each household of the sample. Results suggest that good governance significantly reduces the probability of being subjectively poor, both over the whole population and also among households that are poor in terms of monetary income. We then estimate the greater cost that a family has to bear in order to achieve a given level of welfare, if it lives in a region with inefficient public institutions. Our measure of this inefficiency cost is around 6% of disposable income.

Suggested Citation

  • Massimo Baldini & Vito Peragine & Luca Silvestri, 2017. "Quality of government and subjective poverty in Europe," Department of Economics 0107, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  • Handle: RePEc:mod:depeco:0107
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    References listed on IDEAS

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    1. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
    2. Helliwell, John F. & Huang, Haifang, 2008. "How's Your Government? International Evidence Linking Good Government and Well-Being," British Journal of Political Science, Cambridge University Press, vol. 38(04), pages 595-619, October.
    3. Alberto Chong & César Calderón, 2000. "Institutional quality and poverty measures in a cross-section of countries," Economics of Governance, Springer, vol. 1(2), pages 123-135, July.
    4. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
    5. Silvia Camussi & Anna Laura Mancini, 2016. "Individual trust: does quality of public services matter?," Temi di discussione (Economic working papers) 1069, Bank of Italy, Economic Research and International Relations Area.
    6. Ravallion, Martin, 2016. "The Economics of Poverty: History, Measurement, and Policy," OUP Catalogue, Oxford University Press, number 9780190212773.
    7. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    8. de Vos, Klaas & Garner, Thesia I, 1991. "An Evaluation of Subjective Poverty Definitions: Comparing Results from the U.S. and the Netherlands," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 267-285, September.
    9. Erwin H Tiongson & Hamid R Davoodi & Sanjeev Gupta, 2000. "Corruption and the Provision of Health Care and Education Services," IMF Working Papers 00/116, International Monetary Fund.
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    11. Jan Ott, 2010. "Good Governance and Happiness in Nations: Technical Quality Precedes Democracy and Quality Beats Size," Journal of Happiness Studies, Springer, vol. 11(3), pages 353-368, June.
    12. Theo Goedhart & Victor Halberstadt & Arie Kapteyn & Bernard van Praag, 1977. "The Poverty Line: Concept and Measurement," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 503-520.
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    More about this item

    Keywords

    Quality of government; subjective poverty; minimum income; European regions; poverty line;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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