Public Policy and Human Happiness: The Welfare State and the Market as Agents of Well-Being

  • Robert DavidsonEmail author
  • Alexander C. Pacek
  • Benjamin Radcliff
Part of the Happiness Studies Book Series book series (HAPS)


The market and the welfare state are the institutions widely agreed to be the main alternatives available for generating and distributing human well-being. Contending arguments make powerful claims for the superiority of each, reflecting as they do the basic ideological division shaping political conflict in capitalist democracies. In this chapter we attempt an empirical appraisal of this issue, using the extent to which individuals find their lives to be satisfying as an evaluative metric. Considering rates of life satisfaction in the advanced industrial democracies, we find that satisfaction increases as the level of state intervention in the market economy increases. The data suggest that maximizing the “decommodification” provided by the welfare state does indeed help to maximize human happiness. We conclude with a discussion of the practical and theoretical ramifications of these findings.


Life Satisfaction Welfare State Labor Market Regulation Market Intervention Penn World Table 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Allan J, Scruggs L (2004) Political partisanship and welfare state reform in advanced industrial societies. Am J Polit Sci 48(3):496–512CrossRefGoogle Scholar
  2. Clarke HD, Whiteley P, Sanders D, Stewart M (2010) Government performance and life satisfaction in contemporary Britain. J Politics 72(3):733–746CrossRefGoogle Scholar
  3. Diener E, Diener M, Diener C (1995) Factors predicting the subjective well-being of nations. J Pers Soc Psychol 69:851–864CrossRefGoogle Scholar
  4. Diener E, Suh EM, Lucas RE, Smith HE (1999) Subjective well-being: three decades of progress. Psychol Bull 125:276–302CrossRefGoogle Scholar
  5. Diener E, Suh EM (eds) (2000) Culture and subjective well-being. MIT Press, CambridgeGoogle Scholar
  6. DiTella R, McCulloch R, Oswald A (1997) The macroeconomics of happiness. The labour market consequences of technical and structural change discussion paper series, number 19. Centre for Economic Performance, Oxford UniversityGoogle Scholar
  7. Erikson RS, Wright GC, McIver JP (1993) Statehouse democracy: public opinion and policy in the American states. Cambridge University Press, CambridgeGoogle Scholar
  8. Esping-Andersen G (1990) The three worlds of welfare capitalism. Princeton University Press, PrincetonGoogle Scholar
  9. Frey B, Stutzer A (2002) Happiness and economics. Princeton University Press, PrincetonGoogle Scholar
  10. Hirschman A (1991) The rhetoric of reaction: perversity, futility, jeopardy. Harvard University Press, CambridgeGoogle Scholar
  11. Huber E, Ruesschemeyer D, Stephens J (1992) Capitalist development and democracy. University of Chicago Press, ChicagoGoogle Scholar
  12. Inglehart R (1988) The renaissance of political culture. Am Polit Sci Rev 82(4):1203–1230CrossRefGoogle Scholar
  13. Inglehart R (1990) Culture shift in advanced industrial democracies. Princeton University Press, PrincetonGoogle Scholar
  14. Inglehart R (2000) Globalization and post-modern values. Wash Q 23(1):215–228CrossRefGoogle Scholar
  15. Inglehart R, Klingemann HD (2000) Genes, culture, democracy, and happiness. In: Diener E, Suh EM (eds) Culture and subjective well-being. MIT Press, Cambridge, pp 165–183Google Scholar
  16. Inglehart R, Welzel C (2005) Modernization, cultural change, and democracy: the human development sequence. Cambridge University Press, New YorkGoogle Scholar
  17. Kacapyr E (2008) Cross-country determinants with life. Int J Soc Econ 35(6):400–416CrossRefGoogle Scholar
  18. Lane RE (1978) Autonomy, felicity, futility. J Politics 40:1–24CrossRefGoogle Scholar
  19. Lane RE (2000) The loss of happiness in market democracies. Yale University Press, New HavenGoogle Scholar
  20. Layard R (2005) Happiness: lessons from a new science. Allen Lane, LondonGoogle Scholar
  21. Lindblom C (1977) Politics and markets. Basic Books, New YorkGoogle Scholar
  22. Messner SF, Rosenfeld R (1997) Political restraint of the market and levels of criminal homicide: a cross-national application of institutional-anomie theory. Soc Forces 75(4):1393–1416Google Scholar
  23. Murray C (1984) Losing ground: American social policy, 1950–1980. Basic Books, New YorkGoogle Scholar
  24. Myers D, Diener E (1995) Who is happy? Psychol Sci 6:10–19CrossRefGoogle Scholar
  25. Radcliff B (2001) Politics, markets, and life satisfaction: the political economy of human happiness. Am Polit Sci Rev 95(4):939–952Google Scholar
  26. Radcliff B (2013) The political economy of human happiness: how voters’ choices determine the quality of life. Cambridge University Press, CambridgeGoogle Scholar
  27. Scruggs L (2005) Comparative welfare entitlements dataset. Department of Political Science, University of Connecticut. Available at: Accessed 15 April 2008
  28. Schyns P (1998) Cross-national differences in happiness: economic and cultural factors explored. Soc Indic Res 43:3–26CrossRefGoogle Scholar
  29. Somers M, Block F (2005) From poverty to perversity: ideas, markets, and institutions over 200 years of welfare debate. Am Sociol Rev 70(2):260–287CrossRefGoogle Scholar
  30. Soros G (1998) The crisis of global capitalism. Public Affairs, New YorkGoogle Scholar
  31. Swank D (1988) The political economy of government domestic expenditure in the affluent democracies, 1960–1980. Am J Polit Sci 32(3):1120–1150CrossRefGoogle Scholar
  32. Swank D (2001) Political institutions and welfare state restructuring: the impact of institutions on social policy change in developed democracies. In: Pierson P (ed) The new politics of the welfare state. Oxford University Press, New York, pp 197–237CrossRefGoogle Scholar
  33. Triandis HC (1989) The self and social behavior in differing cultural contexts. Psychol Rev 96(3):506–520CrossRefGoogle Scholar
  34. Veenhoven R (1996) Developments in satisfaction research. Soc Indic Res 37:1–46CrossRefGoogle Scholar
  35. Veenhoven R (1997a) Advances in understanding happiness. Revue Quebecoise de Psychologie 18:29–74Google Scholar
  36. Veenhoven R (1997b) Quality of life in individualistic societies. In: DeJong M-J, Zijderveld AC (eds) The gift of society. Enzo Press, Netherlands, pp 149–170Google Scholar
  37. Veenhoven R (1999) Quality of life in individualistic society: a comparison of 43 nations in the early 1990s. Soc Indic Res 48:157–186CrossRefGoogle Scholar
  38. Veenhoven R (2000) Well-being in the welfare state: level not higher, distribution not more equitable. J Comp Policy Anal 2(1):91–125CrossRefGoogle Scholar
  39. Veenhoven R (2002) Why social policy needs subjective indicators. Soc Indic Res 58:33–45CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  • Robert Davidson
    • 1
    Email author
  • Alexander C. Pacek
    • 2
  • Benjamin Radcliff
    • 3
  1. 1.Amsterdam Research Center for Gender and SexualityUniversity of AmsterdamAmsterdamThe Netherlands
  2. 2.Department of Political ScienceTexas A&M UniversityTXUSA
  3. 3.Department of Political ScienceUniversity of Notre DameNotre DameUSA

Personalised recommendations