Market Openness, Transition Economies and Subjective Wellbeing

This study attempts to examine the impact on subjective wellbeing (SWB) of economic openness as a social institution. The empirical testing of the liberal argument for the importance of market openness in human wellness is based on a cross-national design. Average scores of ‘feeling of happiness’ in 65 countries and ‘life satisfaction’ in 76 countries measured during the 1990s that are drawn from the World Database of Happiness overseen by Veenhoven (2006) are modeled as dependent variables. Regression analysis generates favorable results for the liberal argument in that length of being an open economy (versus closed economy) boosts the level of happiness, while transition to openness augments life satisfaction. Although the post communist countries registered less happiness in the early phase of transition towards the market economy, in general, our model specification indicates that an open market in itself was not responsible for this region’s unpleasant psychology.