Actually the magnitude of the effect is a bit of an eye-opener.
Empirical Linkages between Good Government and National Well-being
by John F. Helliwell, Haifang Huang, Shawn Grover, Shun Wang
Abstract:
This paper first reviews existing studies of the links between good
governance and subjective well-being. It then brings together the
largest available sets of national-level measures of the quality of
governance to assess the extent to which they contribute to
explaining the levels and changes in life evaluations in 157
countries over the years 2005-2012, using data from the Gallup World
Poll.The results show not just that people are more satisfied with their
lives in countries with better governance quality, but also that
actual changes in governance quality since 2005 have led to large
changes in the quality of life. For example, the ten-most-improved
countries, in terms of delivery quality changes between 2005 and
2012, when compared to the ten countries with most worsened delivery
quality, are estimated to have thereby increased average life
evaluations by as much as would be produced by a 40% increase in per
capita incomes.The results also confirm earlier findings that the delivery quality
of government services generally dominates democratic quality in
supporting better lives. The situation changes as development
proceeds, with democratic quality having a positive influence among
countries that have already achieved higher quality of service
delivery.