Individualist and Collectivist Cultures, and the Welfare State: A Global Cross-national Analysis of Over 120 Societies

Cultural differences between societies have turned out to be crucial determinants of various salient political-economic processes, including economic development and governance. The persistent, deeply historically rooted individualism-collectivism divide is especially important in this respect. But does this cultural cleavage also matter for the size of the modern welfare state? Theoretically, the issue seems undetermined. On one side, critical scholars have been warning that individualism erodes social solidarity and cohesion, bolstering self-centered and self-seeking behavior, and thus undermining the prospects of a robust social safety net. On the other side, a wealth of empirical evidence shows individualism is associated with higher trust, more cooperation, and increased prosociality, suggesting it might act as a key structural foundation of the welfare state. Empirically, macro-level studies on the topic performed with large, globally representative sources are sparse to nonexistent. The present study seeks to address this gap in the literature by constructing a panel dataset of 120–140 countries and using the latest comprehensive, non-WEIRD-biased measure of collectivism. A variety of different statistical estimations, including causal instrumental-variable analyses based on the Parasite-Stress Theory of Values and Sociality, uncover no evidence to support the claim that individualism corrodes the welfare state. Instead, correlational random-effects regressions clearly suggest the opposite, with collectivism consistently and significantly negatively predicting the welfare state. Causal instrumental-variable analyses reveal a more mixed result, with many estimates turning out to be non-significant in at least some of the specifications.