This study examines how the influence of collectivist values on economic prosperity is contingent upon the ethical systems that establish a foundation for cooperation within a society. Cultural studies suggest that individualistic cultures tend to develop a system of generalized morality, which promotes ethical and cooperative behavior among abstract individuals in a society. In contrast, collectivist societies often adopt an ethical system characterized by limited morality, confining moral conduct to family and relatives while excluding other groups. Limited morality has been frequently attributed to poor economic performance in collectivist cultures. Consequently, a prevailing implicit recommendation in this body of literature is to adopt a universal moral system across all countries. Modern theories in anthropology and cultural psychology suggest that the distinction in behavioral norms between “in-group” and “out-group” is a durable cultural characteristic of collectivist countries. Hence, striving for a moral system based on generalized morality may not yield significant economic improvements. Therefore, we propose a hypothesis that an effective direction for state policy development lies in expanding the concept of kinship beyond the confines of the family to encompass larger groups such as communities or companies, thereby fostering cooperation within these expanded units. To test this hypothesis, an econometric model has been developed, enabling the estimation of the differentiated impact of ethical system types on income in individualistic and collectivist countries. To assess the level of collectivism on a national scale, we develop a novel kinship intensity index utilizing G. Murdock’s Ethnographic Atlas.
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