Helliwell, et al. (2014) on Good Government and Well-being

John F. Helliwell, Haifang Huang, Shawn Grover, and Shun Wang, “Empirical Linkages between Good Government and National Well-being.” NBER Working Paper No. 20686, November 2014.

• The World Bank provides Worldwide Governance Indicators, with six components: “government effectiveness, regulatory quality, rule of law, and the control of corruption;” “voice and accountability;” and “political stability and absence of violence.” The first four are about delivery of services, the last two about the state of democracy. 

• Does good governance boost subjective well-being (SWB)? If so, through what channels? Beware of misleading correlations: more educated people are happier, but when controlling for health, etc., the effect of education goes away or reverses. It seems that education leads to things that improve happiness, but is not happiness boosting per se. 

• Nonetheless, low corruption and high trust seem to directly boost happiness, as well as making government more efficient. 

• Approximately one quarter of changes in SWB are income-related, while the rest are due to other factors. The determinants of SWB around the world seem to be quite similar. 

• Will a lost wallet be returned? International variation in answering this question is much higher when asked if police will return the wallet than when asked if a stranger will return it. 

• Trust reduces traffic deaths and suicides! 

• The quality of delivery of government services tends to have a greater association with SWB than does the extent of democracy: improvements in government service quality add considerably to SWB, even controlling for the higher GDP that they bring about. For countries that have a high quality of service delivery, however, a stronger democracy improves SWB.