Decentralization, Happiness and the Perception of Institutions

44 Pages Posted: 18 Apr 2011

See all articles by Luis Diaz-Serrano

Luis Diaz-Serrano

Rovira i Virgili University; IZA Institute of Labor Economics

Andrés Rodríguez-Pose

London School of Economics & Political Science (LSE) - Department of Geography and Environment

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Abstract

This paper analyses whether the different powers and resources at the disposal of local and regional governments across Europe deliver greater satisfaction with political institutions and lead to greater personal happiness. The analysis uses microdata from the four available waves of the European social survey (2002, 2004, 2006 and 2008), including more than 160,000 observations of individuals living in 29 European countries. Our results reveal that political and fiscal decentralization have a positive and significant effect on individuals' overall happiness. Fiscal decentralization also exerts a significant effect on the level of satisfaction with political and economic institutions and with the education and health systems, whereas the effect of political decentralization on these variables is more limited. The results show that citizens seem to be happier with the actual capacity of their local governments to deliver than with the general principle that they can have a say on their daily politics and policies.

Keywords: happiness, well-being, satisfaction, fiscal and political decentralization, Europe

JEL Classification: H11, H77

Suggested Citation

Diaz-Serrano, Luis and Rodríguez-Pose, Andrés, Decentralization, Happiness and the Perception of Institutions. IZA Discussion Paper No. 5647, Available at SSRN: https://ssrn.com/abstract=1812532 or http://dx.doi.org/10.2139/ssrn.1812532

Luis Diaz-Serrano (Contact Author)

Rovira i Virgili University ( email )

Campus Sescelades, Carretera de Valls s/n
43006 Tarragona, Tarragona 43007
Spain

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Andrés Rodríguez-Pose

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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