1 Department of Economics, Aarhus School of Business, Aarhus BSS, Aarhus University2 GlobID -Globalization and Industry Dynamics, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 ETH Zürich5 Stockholm School of Economics6 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
Revisiting the Cross-Country Evidence
A long tradition in economics explores the association between the quality of formal institutions and economic performance. The literature on the relationship between such institutions and happiness is, however, rather limited. In this paper, we revisit the findings from recent cross-country studies on the institutions-happiness association. Our findings suggest that the conclusions reached by previous studies are fairly sensitive to the specific measure of 'happiness' used. In addition, the results indicate that the welfare effects of policies may differ across phases of a country's economic development. This bears important policy implications which we discuss in the concluding section of the paper.