Government vs. Happiness?
Does an increase in the size of government come at the expense of individual happiness? Does limited government increase self-reported measures of the quality of life? A study by three Swiss economists recently posted to SSRN suggests the answer is "yes." In the authors' words: "government involvement is detrimental to individuals’ quality of life."
Here is the abstract for the paper, "The Bigger the Better? Evidence of the Effect of Government Size on Life Satisfaction around the World":
This paper empirically analyzes the question whether government involvement in the economy is conducive or detrimental to life satisfaction in a cross-section of 74 countries. This provides a test of a longstanding dispute between standard neoclassical economic theory, which predicts that government plays an unambiguously positive role for individuals' quality of life, and public choice theory, that was developed to understand why governments often choose excessive involvement and regulation, thereby harming voters' quality of life. Our results show that life satisfaction decreases with higher government spending. This negative impact of the government is stronger in countries with a leftwing median voter. It is alleviated by government effectiveness - but only in countries where the state sector is already small.Although I like the paper's general conclusions, I am skeptical that the findings are particularly robust. Among other things, I doubt the reliability of some of the data, such as results from the World Values Survey, which purports to measure life satisfaction and social trust in various nations. Nonetheless, taken with the appropriate grain(s) of salt, it's an interesting study. It's posted on SSRN here.
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Please nuke this comment after the topic begins, or immediately if I am too far out of line. I value being here.
See also "terrorism ccauses happiness", which I would explain in that people living in societies that experience terrorism are less likely to experience such angst.
And what about happiness's being relative to how well others are doing?
Snark aside, anything that purports to measure "happiness" or "satisfaction" is an ideological exercise. We can think of all sorts of reasons why dependence on gov't, or private charity, or whatever, is detrimental besides hooking people up to the Happy-O-Meter.
Most of the happiness research (not using WVS) in fact shows that people in high income welfare states are happier. This is consistent with Rawlsian minimax. But all the happiness research is heavily influenced by the relative position effect. I.e., happiness is affected by one's position relative to others, not just one's independent situation
I would think that this effect would not be of much importance in actually evaluating how happy someone is, however. Even if you are actually experiencing more frequent occurences of well-being, if you don't think that you're happy, then you're not.
It uses the 1990 wave of the World Values Survey but includes only 15 countries (Austria, Belgium, Canada, Denmark, Finland, France, Germany, Great Britain, Ireland, Italy, Japan, Netherlands, Norway, Sweden, and US). Besides variables for "socialist," "liberal," and "conservative" regime attributes, it uses GDP and unemployment as controls. It also purports to show that countries with left party dominance are happier. I'd forgotten that he also does an analysis on individual-level data for those 15 countries &finds similar results, except that "individualism" is also positive for happiness. Also, consistent with magoo's intuition, the author finds that socialism might be happiness-promoting only among those with low income, less so among those with high income. I am still skeptical of the whole project of interpersonal comparisons of happiness, especially across cultures.
Second, one obvious difference between Wal-Mart and most governments is that Wal-mart has a policy of 'use them up and drive them out'. If a worker has too many sick days (even upaid ones) for their taste, he or she can be fired. [don't bother telling me that this is illegal; so is firing people for organizing a union; so is forcing people to work off the clock; and so is violating federal child labor laws]
A gram is better than a damn!
Looking at the low-GDP countries, a thought comes to me: is it possible for a country to have an extensive welfare state, but even so, a government with a low percentage of GDP, because most of the people for reasons of their own don't choose to make very extensive use of the government largesse available to them? Would an extensive welfare state in the US work the same way an extensive welfare state in Norway does?
and Prof John Kay (Oxford) comment in the Financial Times in March this year http://www.johnkay.com/political/381. As frankcross and anderson above have said, one of the key determinants of happiness is relative wealth.
I wonder too. Let's start this modified study by surveying the poor in France!
Honestly, I suspect the true answer is there is an optimum level of government involvement. Doing a little, is probably better than doing nothing. So, for example, when government limits itself to building sewage treatment facilities, public water, elminating absolute starvation etc. it makes the poor happier than they would have been otherwise.
On other hand, once the government has passed the optimum level of activity, additional involvement just becomes interference in people's lives. Once it's past this level, even the poor become frustrated trying to delve the huge number of rules and regulations that will, and must, inevitably exist to dole out government benefits "fairly".
The difficulty is identifying the optimum level of involvement.
http://happinesspolicy.com
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