The impact of socio-economic development on individualism: a cross-country analysis.

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The emergence of the term ‘individualism’ since the turn of the nineteenth century, and its wide-ranging impacts on the individual, as well as societal level, has led to it being extensively researched. In economics literature in particular, empirical research has mainly focused on the relationship between individualism and prosperity. In this domain, most arguments have focused on the assumption that individualism is closely related to more growth. Yet, little contributions have made a case for a reversed relationship. This research presents evidence on socio-economic development and its effect on the cross-cultural factor of individualism at the country-level. Motivated by the influential theory of modernization, this study hypothesizes that socio-economic development leads to growing individualism, thereby assuming that collectivism is simultaneously eroded. High contexts of economic inequality and good institutional quality are hypothesized to play a positive moderating role. In order to run a panel data analysis, this study equated data replicative of Hofstede’s cultural framework for a subset of 63 overlapping countries from 1996 to 2018. WVS data was gathered to construct a new individualism-collectivism measure. This was done in an attempt to capture the essence of the concept as a one-dimensional societal construct, a notion that originates from Hofstede’s (1980) seminal work.
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