Individualism and Worldwide Income Levels

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In the 2011 edition of the American Economic Review Papers and Proceedings, Yuriy Gorodnichenko and Gierard Roland present some evidence on the cultural determinants of 2000 income levels worldwide. They draw on various measures of cultural dimensions created by sociologist Geert Hofstede and psychologist Shalom Schwartz. I'll let the authors summarize in their own words.

Since research shows a powerful [positive] effect of individualism on long-run growth, the key question is what other dimensions of culture matter for long-run growth. In this paper, we look at the main existing cross-country measures of culture and analyze their effect on output per-capita. We find essentially that only individualism has a robust effect.


Individualism is the "extent to which it is believed that individuals are supposed to take care of themselves as opposed to being strongly integrated and loyal to a cohesive group." How Randian! Individualism, in the analysis, trumps egalitarianism, uncertainty avoidance, and harmony among other cultural dimensions.

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