Does quality of governance contribute to the heterogeneity in happiness levels across MENA countries?

Purpose – Happiness levels differ among the Middle East and North African (MENA) countries and follow a downtrend, making such heterogeneity a popular topic to investigate. The paper aims to study the contribution of governance quality on the heterogeneity in happiness levels across MENA countries while controlling for demographic and socioeconomic variables. Design/methodology/approach – The paper applies panel random-effects regression analysis on three samples: full sample, rich and poor subsamples, using data from 20 MENA countries over the 2007–2017 period. Findings – The empirical results for the full sample conclude that better technical quality of governance increases happiness in the region. Furthermore, findings suggest that political stability and absence of violence matters for people's happiness only in rich countries. Whereas, control of corruption is positively associated with happiness level in the full sample and poor subsample. Across all three samples, voice and accountability has no impact on happiness. Research limitations/implications – A possible limitation of the paper is using an index for happiness based on a subjective weight distribution. Therefore, researchers are encouraged to implement a novel method using data envelopment analysis. Practical implications – This paper includes implications for policymakers in the MENA region. Governments should strengthen existing laws and create a comprehensive database of laws, fight corruption and prioritize raising income. Originality/value – This paper is the first to categorize MENA countries into rich and poor to analyze how governance quality contributes to the heterogeneity in happiness levels.