The example from The Economist is a play on words on the idiom "happy is as happy does". Like many idioms, it can be tough to explain, and can appear to break lot of rules of normal grammar.
Happy is as happy does.
You make your own happiness by your actions.
In other words, you cannot expect to be happy unless you do something to bring your happiness about.
The Economist is taking the well-known idiom and tweaking it to (I presume) make a point that refers to the contents of the article. I'm going to guess and assume it means something like:
You are as happy as you are told to be.
I suspect the oldest form of this phrase is the proverb 'handsome is as handsome does', which has been used in various forms as far back as Chaucer. All the other versions are derivations of this original.