World Happiness Report 2023 91 very stable over long periods, as almost every country remains in the same cluster over several decades. Even though some institutions can change fairly quickly – as we see from time to time, when countries shift towards more democratic institutions – investments under- pinning state effectiveness may take a long time to bear fruit. Moreover, supporting values and norms are likely to change even more slowly than institutions. Although we include it in the Pillars of Prosperity index, our approach suggests how it may be misleading to look only at income when comparing country patterns in well-being since income itself may (partly) be the product of an effective state. Moreover, effective states may permit human flourishing on a wider range of outcomes than income. For instance, China’s astonishing economic progress over the past forty years has not been coupled with freedom of expression or political rights. Our study of clustering suggests that the real challenge in promoting well-being is finding the ingredients needed to become a common- interest state. Two centuries ago, the world had no such states. But it is no better to tell countries outside the common-interest cluster that they need to be more like Denmark, than it is to tell an athlete that she will win an Olympic medal by running faster. Norms, values, and institutions are the scaffolding that supports the construction of common-interest states. Neither are simple prescriptions on the need for a democratic transition credible and useful, especially when interpreted merely as greater openness in access to power. If free elections are not combined with cohesive institutions and values, they may just generate political instability associated with transitions into violence. Figure 3.3: Country-level Life Satisfaction (average Cantril Ladder scores) vs. Pillars of Prosperity Index, by State Clusters = 0 . 769 = 0 . 683 Weak States Special-interest States Common-interest States — Fitted values Life Satisfaction (2019) .2 .4 .6 .8 1 .2 .4 .6 .8 1 8 7 6 5 4 3 Life Satisfaction (2019) 2 1 0 -1 -2 Pillars of Prosperity Index (2016) Pillars of Prosperity Index (2016) = 0 . 769 = 0 . 683 Note: Left graph holds constant individual age, income, gender, health, employment, and marital status. Right graph shows unconditional correlation. The highest values for the three state-capacity measures and the highest values of life satisfaction are found in the green-colored common-interest states.
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