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We explain total life satisfaction using Wave 5 of World Value Survey data covering 58 countries /jurisdictions with a regression to estimate optimal government spending for healthcare, education, and total government spending by maximizing wellbeing We find that the average of total public spending for countries of good public governance is almost identical to the average of estimates of optimal total public spending, which stands at 36. 85 % of GDP. We also find significant over spending or under spending for individual countries. Optimal spending on healthcare and education increase s with population aging. Per capita GDP reduces optimal healthcare spending but increases optimal education spending as a percentage of GDP.


Acknowledgments: We thank Avinash Dixit, John Helliwell, Kin Lam, Ping Lin, and Xiangdong Wei for very helpful comments and suggestions. Songbin Lai, Ronald Hung, and Xu Yang provided very able research assistance. This project was funded by Faculty research grant DR14A8 from Lingnan University.

Recommended Citation

Ho, L. S., Liu, M., Ng, Y.-K., & Wu, J. (2023). Happiness and government: The role of public spending and public governance (SERC Working Paper Series). Retrieved from