Institutional effects on happiness

Type of democracy

People’s happiness is influenced by the kind of political system they live in. It is to be expected that people living in constitutional democracies are happier because the politicians are more motivated to rule according to their interests. If they disregard the wishes of the people, the politicians and parties in a democracy fail to be re-elected and lose their power. Democratic institutions, in particular the right to participate in elections and vote on issues, thus contribute to citizens’ happiness. Researchers on happiness have looked at the interaction of democracy with happiness. The extent to which a constitution is democratic and allows its citizens to make decisions according to their own preferences have been captured by various indices of freedom. Political, economic and personal freedom are strongly and statistically significantly correlated with happiness (Veenhoven, 2000). Controlling for differences in per capita income, the correlation with economic—but not political and personal—freedom remains statistically significant. Analyses with sub-samples suggest that economic freedom contributes to happiness, particularly in poor countries with a low level of general education, while political freedom is more strongly correlated with subjective well-being in rich countries with a high level of education. In both cases, differences in income per capita are controlled for (Veenhoven, 2000).

Such studies are certainly illuminating, but they can only inform us in a limited way about the influence of various constitutional conditions on subjective well-being. Countries differ from each other in many ways, and it is not sufficient just to control for unequal per capita incomes to capture the influence of democracy. Moreover, the cross-section studies only report correlations and do not deal with causation. It remains open whether democracy fosters happiness, or whether happiness is a precondition for democracy. Many of these problems are reduced when one concentrates on specific institutions of democracy in one particular country.

The possibility of citizens to directly participate in politics is an important feature of democracy. The influence of direct democracy on happinesshas been analysed using data on reported subjective well-being for Switzerland in 1992–1994 (Frey and Stutzer, 2000). The major explanatoryvariable is the institutionalised right of individual political participation via popular referenda, which varies considerably between the 26 Swiss cantons. The estimates reveal that the extent of possibilities for direct democratic participation exerts a statistically significant, robust and sizeable effect on happiness over and above the demographic and economic determinants normally taken into account. When the full variation in the institutional variable is considered, i.e. when individuals in the canton with most developed institutions of direct democracy are compared to citizens in the canton with the lowest direct participation rights, the former state with an 11 percentage points higher probability that they are completely satisfied. This effect is larger than living in the top rather than in the bottom income category.

Date: 2014-12-21; view: 807