The impact of democracy on well-being

Can governance impact directly on well-being? In this paper we examine subjective well-being using data for a cross section of countries from the World Values data set. We find that regional democratic satisfaction impacts on both individual happiness and life satisfaction. However, the impact is less evident for women, rich people and for those in rich countries. The fact that the governance variable analysis is based on regional differences in democratic satisfaction reminds us that governance and indeed happiness often differs within countries as well as between them. The use of regional satisfaction in this manner helps overcome endogeneity problems which would be present if we were to use individual democratic satisfaction. Other significant determinants of happiness include settlement size, marital status, income, unemployment and being part of a linguistic minority/majority grouping.