Working Paper: NBER ID: w20686
Authors: John F. Helliwell; Haifang Huang; Shawn Grover; Shun Wang
Abstract: This paper first reviews existing studies of the links between good governance and subjective well-being. It then brings together the largest available sets of national-level measures of the quality of governance to assess the extent to which they contribute to explaining the levels and changes in life evaluations in 157 countries over the years 2005-2012, using data from the Gallup World Poll. \n \n The results show not just that people are more satisfied with their lives in countries with better governance quality, but also that actual changes in governance quality since 2005 have led to large changes in the quality of life. For example, the ten-most-improved countries, in terms of delivery quality changes between 2005 and 2012, when compared to the ten countries with most worsened delivery quality, are estimated to have thereby increased average life evaluations by as much as would be produced by a 40% increase in per capita incomes. \n \nThe results also confirm earlier findings that the delivery quality of government services generally dominates democratic quality in supporting better lives. The situation changes as development proceeds, with democratic quality having a positive influence among countries that have already achieved higher quality of service delivery.
Keywords: Governance; Wellbeing; Subjective Wellbeing; Life Evaluations; Delivery Quality
JEL Codes: H11; I31; P52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improvements in governance quality (G38) | Increased life evaluations (I31) |
| Increase in delivery quality by one standard deviation (L15) | Increase in average life evaluations (J17) |
| Ten most improved countries in governance quality (O57) | Rise in life evaluations equivalent to a 40% increase in per capita income (I31) |
| Democratic quality (D72) | Positive impact on wellbeing (I31) |
| Governance impacts wellbeing through economic channels (GDP per capita) (F62) | Wellbeing (I31) |
| Governance impacts wellbeing through social trust and perceived freedom (I31) | Wellbeing (I31) |