Individualism, economic freedom, and charitable giving

Abstract

We investigate the role of individualistic social rules and norms in charitable giving. Individualism in market societies is often criticized as corrupting morality and discouraging charitable giving. We contest that view. We propose direct and indirect mechanisms through which individualism increases charity. In the direct channel, individualism encourages self-interested giving. In the indirect channel, individualism contributes to charity by reinforcing economic freedom. We use evidence from a large cross-section of countries and several measures of individualism to investigate both channels. Our empirical findings confirm each channel and support the insights of classical liberals, such as Adam Smith and David Hume, and more recent studies in the humanomics tradition, which recovers the argument that individualism has its virtues.