Oct. 16, 2010 Is there a correlation between a nation's contributions to international aid programs and the happiness of its citizens? According to a study of nine European donor countries, there is a direct relationship between the level of foreign aid and level of happiness in the UK and France but for other European countries there seems to be no link. Full details of the analysis and its conclusions are published this month in the journal Global Business and Economics Review.
Mak Arvin and Byron Lew of Department of Economics, Trent University in Peterborough, Ontario, Canada, have investigated the old adage that it's better to give than receive. Previous research has suggested that for individuals giving money to worthy causes brings more happiness than spending it oneself. Elizabeth Dunn and colleagues at the University of British Columbia, Vancouver, found that people said they were much happier if they were spending money "pro-socially" -- that is on gifts for others or on charitable donations -- rather than spending it on themselves.
Whether this proposition translates to the national level is open to Question, but Arvin and Lew hoped to confirm that it is indeed the case by looking at the foreign aid disbursements of nine donor countries in Europe and using general measures of happiness among a nation's citizens. Their statistical analysis hoped to reveal through a standard causality test based on the statistical question of asking whether past reported happiness levels could predict levels of aid offered.
"Our results reveal that for two important European donors, France and the UK, the aid-happiness link is a positive causal relationship from happiness to aid," the team says. "In addition, for France, there is also a positive causal connection from aid to happiness. This leads us to suspect that aid and happiness are likely both endogenous -- at least for some countries."
The researchers point out that it is not surprising that there is a different effect in countries other than the UK and France because there are different attitudes towards foreign aid. Some nations have smaller public sectors others donate at the institutional level and through private channels. Nevertheless, public giving seems to bring greater happiness to a nation as a whole as well as assisting those less fortunate.
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- B. Mak Arvin, Byron Lew. Aid and happiness: untangling the causal relationship in nine European donor countries. Global Business and Economics Review, 2010; 12 (4): 341 DOI: 10.1504/GBER.2010.036058
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