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The Impact of Institutions and Development on Happiness

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  • Duha T. Altindag
  • Junyue Xu

Abstract

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 has 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.

Suggested Citation

  • Duha T. Altindag & Junyue Xu, 2011. "The Impact of Institutions and Development on Happiness," Auburn Economics Working Paper Series auwp2011-08, Department of Economics, Auburn University.
    • Handle: RePEc:abn:wpaper:auwp2011-08
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    File URL: https://cla.auburn.edu/econwp/Archives/2011/2011-08.pdf
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    References listed on IDEAS

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    Cited by:

    1. Bergh, Andreas & Mirkina, Irina & Nilsson, Therese, 2013. "More Open – Better Governed? Evidence from High- and Low-income Countries," Working Paper Series 997, Research Institute of Industrial Economics.
    2. Danish, Muhammad Hassan & Nawaz, Shahzada Muhammad Naeem, 2022. "Does institutional trust and governance matter for multidimensional well-being? Insights from Pakistan," World Development Perspectives, Elsevier, vol. 25(C).
    3. Andreas Bergh & Irina Mirkina & Therese Nilsson, 2014. "Globalization and Institutional Quality-A Panel Data Analysis," Oxford Development Studies, Taylor & Francis Journals, vol. 42(3), pages 365-394, September.

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    More about this item

    Keywords

    Economic Development; Happiness; Subjective Well-Being; Institutions;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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