Institutions and Life Satisfaction

The degree to which people are satisfied with their lives is affected by many factors. This chapter surveys studies that document the influence of one such factor – formal institutions (i.e., written rules). Such rules, typically laws that enable and constrain political, legal, and economic decision-making, have the potential to affect how satisfied people are with their lives in at least two ways. First, there can be direct effects in that rules either enable certain individual choices or constitute constraints on the individual’s choice set; furthermore, such effects can be of a “symbolic” kind: certain types of rules are valued for their character. Second, there can be indirect effects in that rules shape the overall character of society, through the actions that are, and that are not, taken by people.