Racially Inclusive Governance Makes (Almost) Everyone Happier: The End of Apartheid as Evidence for Procedural Utility

Abstract

This paper examines the impact of a large social regime change on well-being independently from the change's direct impact on observable outcomes. While individuals get utility from outcomes, they may also get 'procedural' utility from the processes by which outcomes arise. We apply a Blinder-Oaxaca decomposition to models of life satisfaction before and after the end of apartheid. The results suggest that the increase in life satisfaction seen in South Africa following apartheid's end should not be attributed to improvements in socioeconomic outcomes, but to changes in the well-being derived from given levels of these outcomes. This suggests that processes and institutions have important impacts on life-satisfaction independently from their direct influence on outcomes.