The countries having governments with the most regulations and taxes are widely regarded as the most desirable countries to live in.
Examples (in no particular order); USA, Sweden, Germany, France, Canada, Italy, England, New Zealand, Australia etc.
The countries with the least regulation and smallest governments are not widely regarded as desirable places to live.
Examples (in no particular order); Jakarta, Serbia, Ukraine, Venezuela, Laos, Sierra Leon, Mozambique, Zimbabwe, Somalia, etc.
These countries may not have the kind of environmental regulation, workplace safety and working conditions regulations, automobile pollution and safety regulation, financial and banking regulation, building codes and regulation, etc. that we have in the US, but they are also worse places to live. So there is a strong correlation between rules, regulations and standards vs. desirability and the happiness of residents, not an inverse relationship as you imply. Economically, the same correlation with rules and regulations holds true.