Asymmetric effects of government debt, human development and governance on happiness: a worldwide panel analysis from 2008 to 2023

Purpose This study aims to investigate the asymmetric effects of government debt, human development and governance quality on happiness, using a worldwide panel data set covering 129 countries from 2008 to 2023, and in particular in a distinct area represented by the Islamic-majority countries (Gulf Cooperation Council, Middle East and North Africa). Design/methodology/approach The research uses econometric models, including pooled ordinary least squares, fixed effects and system generalized method of moments, allowing for robust analysis of cross-sectional and endogeneity issues. The model incorporates control variables such as gross domestic product (GDP) growth, urbanization and globalization indices to ensure comprehensive insights. Findings Results reveal that government debt negatively affects happiness by limiting public service funding and increasing economic instability. In contrast, higher human development, as measured by HDI, enhances happiness. Governance quality has a complex impact; strong institutions increase happiness, while fragile governance erodes well-being. In addition, GDP growth and urbanization increase happiness, whereas economic globalization can introduce stress and reduce well-being. Practical implications Insights from this research suggest that balanced fiscal policies, targeted human development initiatives and improved governance can optimize happiness across diverse populations. Social implications Improving public happiness may contribute to societal stability, trust in institutions and well-being, thereby supporting sustainable development. Originality/value This study offers a unique perspective by highlighting asymmetric impacts, addressing gaps in linear or symmetric models of happiness determinants and incorporating updated data through recent global crises.