Working Paper: NBER ID: w11988
Authors: John F. Helliwell; Haifang Huang
Abstract: In this paper we employ World Values Survey measures of life satisfaction as though they were direct measures of utility, and use them to evaluate alternative features and forms of government in large international samples. We find that life satisfaction is more closely linked to several World Bank measures of the quality of government than to real per capita incomes, in simple correlations and more fully specified models explaining international differences in life satisfaction. We test for differences in the relative importance of different aspects of good government, and find a hierarchy of preferences that depends on the level of development. The ability of governments to provide a trustworthy environment, and to deliver services honestly and efficiently, appears to be of paramount importance for countries with worse governance and lower incomes. The balance changes once acceptable levels of efficiency, trust and incomes are achieved, when more value is attached to building and maintaining the institutions of electoral democracy.
Keywords: government quality; life satisfaction; well-being; international evidence
JEL Codes: H11; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Government Quality (L15) | Life Satisfaction (I31) |
| Improvements in Government Quality (H11) | Life Satisfaction (I31) |
| Life Satisfaction (I31) | Government Quality (L15) |