Estimating institutional and cultural drivers of human flourishing using cross-national microdata

This study investigates whether economic freedom, a core dimension of institutional quality, is systematically associated with human flourishing. Using a cross-national microdata covering over 174,345 individuals from 22 countries, we construct two multidimensional flourishing indices through principal component factor analysis, capturing both secure and extended conceptions of well-being. To address endogeneity concerns, we implement an instrumental variable strategy based on historically persistent determinants of institutional development, including ethnic fractionalization, legal origin, and cultural individualism. Across specifications, economic freedom exhibits a positive and statistically robust association with flourishing. Religious participation is consistently linked to higher well-being, while alcohol consumption displays a nonlinear pattern, with moderate use differing markedly from abusive behavior. By integrating institutional economics with individual-level measures of flourishing, this study provides empirically grounded evidence on the structural and cultural determinants of well-being and advances causal identification within the flourishing literature.