Well-Being, Political Decentralisation and Governance Quality in Europe

Abstract

European nations allocate public sector resources with the general aim of increasing the well-being and welfare of their citizens through a fair and efficient distribution of these public goods and services. However, 'who' delivers these goods and services and 'how well' they are delivered are essential in determining outcomes in terms of well-being. Drawing on data from the European Social Survey database, this paper uses Amartya Sen's social welfare index framework - accounting for the trade-off between the maximization of public sector resources and an equitable distribution of these resources - to examine the influence of political decentralisation ('who' delivers the resources) and whether this influence is moderated by governance quality ('how well' they are delivered) on individual subjective well-being. The findings of the econometric analysis reveal that decentralisation does not always lead to higher well-being, as the benefits of political decentralisation are highly mediated by the quality of national governance. In countries with high governance quality, political decentralisation results in a greater satisfaction with health provision, while in lower quality governance countries, a more decentralized government can increase the overall satisfaction with life, the economy, government, democracy and the provision of education, but not necessarily with health-related services.

Keywords: Europe, European Social Survey, political decentralisation, quality of governance, Well-being

JEL Classification: H11, H70, I31