Redistribution and the Individualism–Collectivism Dimension of Culture

This paper examines the relationship between culture and redistribution, focusing on the individualism–collectivism dimension of culture. Perhaps surprisingly, countries with more individualistic cultures have significantly greater income redistribution and lower after-tax income inequality. This finding also holds when using instruments for individualism suggested by the literature on cross-cultural psychology, including historical pathogen prevalence and linguistic and genetic characteristics. The association between individualism and redistribution is driven by higher-income countries, which appear to be influenced by a distinct strain of individualism. Data from the World Values Survey reveals that in higher income countries, individualism is positively correlated with generalized trust and tolerance of outsiders and negatively correlated with belief in traditional gender roles. In lower income countries, individualism is associated with a stronger emphasis on self-reliance and the benefits of competition.