What is the role of government in creating a happier world?

The latest edition of the World Happiness Report offers new insights into wellbeing across the globe. The past year has brought a number of fresh challenges, but many people are still able to find happiness in their lives – and governments can play a role in promoting this.

This year marks a decade since the United Nations voted to introduce an International Day of Happiness – an opportunity to reflect on what actions can be taken to create a happier and kinder world. On this anniversary, the most recent World Happiness Report looks back at happiness trends over the past year and reflects on what governments and individuals can do to maximise happiness.

Happiness trends in 2022

The past year has been hard. It has seen governments and people worldwide grappling with several crises: from the difficult post-pandemic recovery to spiralling inflation, high energy prices and the challenges posed by the Russian invasion of Ukraine.

Despite all this, some patterns in life satisfaction across countries (averaged over the past three years) tell a familiar story. Again, Finland ranks as the happiest country in the world, followed by Denmark and Iceland. Nineteen of the twenty happiest countries in the world were the same in the previous edition of the report.

At the other end of the spectrum, Afghanistan and Lebanon are ranked as least happy and score significantly below the next country. This shows how inequality in happiness across countries at the bottom is larger than across those at the top. Within countries, inequality in happiness has been quite stable over time, but is now growing in some African nations.

Overall, people appear to fare better in countries where the happiness gaps between them are smaller (as defined by the happiness gap between the top and the bottom halves of the population). This confirms that it is not just the levels but also the distribution of happiness that matters.

The findings paint a picture of a world with colossal differences in experienced happiness. The gap between the most and least happy countries in the world is nearly six points (on a 0 to 10 scale). Why does happiness differ so much across countries? Figures from the latest World Happiness Report show that six measures alone – GDP per capita; social support; healthy life expectancy; freedom to make life choices; generosity; and freedom from corruption – explain three-quarters of the differences across countries. So, there is a large role for governments to play to improve the happiness of their populations, which depends on the development and implementation of the right policies.

What can governments do to boost happiness?

In recent years, there has been significant progress in the global measurement and understanding of happiness. Increased data availability on individual wellbeing has allowed researchers to monitor trends both across and within countries and to try to understand which factors matter most.

Increasingly, researchers have found that the institutions present in the places in which people live play a large role, as do the norms and values that people absorb from them. For example, those living in Nordic countries have high levels of happiness even though these countries are not always the wealthiest. Instead, they score high in terms of well-functioning democratic institutions, and they have high levels of trust, mutual respect and support in society.

Equally, countries towards the bottom of the happiness distribution tend to have higher levels of corruption, weaker institutions and higher levels of distrust towards others in society.

The editors of the World Happiness Report argue that the goal of government should be to implement those policies that are best positioned to increase happiness in society. The challenge then lies in evaluating policies based on happiness – a complex task that requires careful cost-benefit analyses in terms of the wellbeing generated per person.

To undertake these analyses, happiness researchers argue that a unified, democratic and easy to understand measure of happiness must be used. This measure must also capture a representative set of people.

Currently, asking people to rank their life satisfaction seems to perform best when it comes to meeting all these requirements. But further efforts are needed to extend this measure to children, to those from vulnerable groups who are less represented in national surveys, and, perhaps most challenging, to consider the happiness of future generations yet to be born.

Lastly, the report argues that governments should not only aim to increase average happiness, but also to pay attention to those who are in misery and aim to eliminate such low levels of happiness altogether.

Making happiness a policy priority would be pioneering. If, as the editors of the report have been advocating, happiness were to become the goal of government, many local and national priorities may change, and the weights attached to various policies may shift.

For example, treatment for mental health conditions may be considered just as important as treatment for physical ailments; improving non-monetary aspects of work would be seen as crucial alongside improving wages; and investments in social capital that generate cohesion and a sense of belonging may be given as much attention as investments in physical infrastructure.

But the path to happiness becoming the explicit goal for all governments is not straightforward. As the World Happiness Report argues, governments may not always have the capability to deliver on this goal effectively. The authors argue that investments in state capacities – such as the state’s fiscal capacity (its ability to raise money), collective capacity (its ability to deliver services) and legal capacity (the rule of law and regulation) capacities – are central elements in the creation of effective countries. But so too is the avoidance of civil war and the achievement of peace without repression.

So, there is much work to be done in the next decade. For some countries, the next step may be to use happiness as a tool to prioritise policies that increase the wellbeing of their citizens. For others, the first step may be creating and cementing the institutions that can facilitate that process in the first place.

What can people do?

The report also reflects on individual behaviours that generate higher levels of happiness in societies. The previous edition of the World Happiness Report documented the large surge in altruistic acts observed throughout the Covid-19 pandemic, where increasing numbers of people from different countries and cultures reported that they had donated to charity, volunteered, or helped a stranger (World Happiness Report, 2022).

This year’s report presents evidence showing that the link between altruism (the idea that people are willing to help others around them without expecting anything in return) and happiness is positive and robust across countries, cultures, and individuals. Consequently, the recipients of acts of generosity typically report higher levels of happiness, which, in turn, explains the strong correlation between high levels of wellbeing and the prevalence of altruistic behaviour observed across countries.

Beyond this, evidence presented in the report shows that helping others also increases the happiness of those who performed the helpful act, especially when generosity is voluntary and motivated by feelings of concern for the recipient.

This year’s report digs deeper into the relationship between happiness and altruism, and the direction of causality between the two. Specifically, the report asks whether happier people become more altruistic or whether acts of selfless kindness are themselves a source of happiness to those who perform them.

Based on the empirical evidence presented in the latest World Happiness Report, it appears that when people’s happiness increases, they can become more generous towards others around them. This is particularly true for those whose happiness increased as a consequence of receiving help from others.

As such, increasing people’s happiness will also lead them to behave in ways that benefit others around them. If governments around the world can get it right, the next decade may just see a self-reinforcing cycle of happier people creating happiness for others.

Where can I find out more?

Find out more about the World Happiness Report, and read the latest, 2023, version, here.
Happiness economics: Can we have an economy of wellbeing? VoxEU column by Carol Graham.
World Happiness Report 2012 – edited by John Helliwell, Richard Layard and Jeffrey Sachs.