Comparison of 126 nations in 2006

Ruut Veenhoven, Erasmus University Rotterdam
Paper presented at: Legatum Prosperity Workshop, June 21-22 London, UK

Freedom in nations can affect the happiness of citizens both positively and negatively. This study is about the balance of effects and considers three kinds of freedom: economic freedom, political freedom and private freedom. The following five questions are addressed: 1) Does freedom go with happiness? 2) Do these kinds of freedom go equally closely with happiness? 3) Are these patterns universal? 4) Are there indications of freedom reaching its limits? 5) What are the causal mechanisms behind these correlations?

Freedom is conceived as opportunity to choose and measured by absence of restrictions in economic, political and personal life. Happiness is conceived as the overall appreciation of ones life as a whole and measured by responses to questions on the matter in representative surveys.

Data on both freedom and happiness is available for 126 nations in the years 2000-2006. It appears that people tend to be happier, the more freedom their nation allows and this applies for all three kinds of freedom. This means that the positive effects of freedom outweigh possible negative ones. The data show no pattern of diminishing returns and this means that freedom has not yet reached its maximum. This global pattern exists also in specific parts of the world, in poor nations as well among rich nations and also in the Western world and in the East. This means that the relationship between freedom and happiness is universal. The correlations are greatly reduced when wealth of the nation is controlled. This may mean that the statistical relationship is largely spurious or that freedom affects happiness though wealth.

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