Document Type : Research Paper
Authors
1 Associate Professor, Department of Economics, Social Sciences Research Institute, Research Institute of Hawzah and University, Tehran, Iran.
2 PhD Candidate in Economics, School of Humanities, Al-Mustafa International University, Qom, Iran.
Abstract
While individualism is often perceived as a negative factor that undermines social ethics and reduces participation in charitable activities, this study proposes the hypothesis that individualism—as a set of cultural values and norms that place the individual at the center of decision-making and social responsibility—can play a positive role in enhancing the level of generosity in society. Accordingly, two mechanisms are examined: a direct mechanism, where individualism fosters personal motivations for helping others, and an indirect mechanism, in which individualism promotes economic freedom, thereby facilitating the growth of charitable activities. To empirically test this hypothesis, the Autoregressive Distributed Lag (ARDL) model was applied using quarterly data from Iran over the period 2010 to 2021. The results indicate that individualism has a positive and significant effect on the level of generosity; specifically, a one-percent increase in individualism leads to a 0/43 percent rise in generosity. Furthermore, economic freedom also shows a positive and significant effect, with a coefficient of 1/16 percent. The findings support both proposed mechanisms and suggest that individualism, when properly institutionalized within Iran’s cultural context, can strengthen ethical behaviors such as generosity. Additionally, the variables of economic growth, income inequality, education level, and government size were found to have positive effects, while corruption showed a negative effect on the level of generosity in Iranian society.
Introduction
Charitable giving is often considered a reflection of social solidarity and ethical responsibility within a society. Conventional wisdom suggests that collectivist cultures are more likely to foster altruistic behavior, while individualism is frequently associated with self-interest and reduced social cohesion. However, recent perspectives argue that individualistic values—by empowering personal responsibility—can also encourage prosocial actions such as charitable giving. This study focused on the Iranian context, where cultural transitions and economic fluctuations have created a unique environment for examining how individualism interacts with generosity.
Methods and Materials
This study adopted a quantitative, longitudinal research design using quarterly time-series data from 2010 to 2021. The statistical population consisted of national economic and social indicators related to charitable giving in Iran. To examine the role of individualistic social norms in the level of charitable giving in society, following Kai et al. (2022), the following regression model was estimated:
Philanthropyt = c0 + c1 Individualismt + c2 GDPt + c3 Freedomt + c4 GINIt + c5 Educationt + c6 Corruptiont + c7 Government sizet + et
Dependent Variable:
Level of Philanthropy in Society (Philanthropy): To measure the level of generosity in society, the World Giving Index was used. This index is based on three components: helping a stranger, donating money, and volunteering time, which are measured using random sampling across different countries. Higher index scores indicate more altruistic behavior as a result of increased generosity. Data for this variable were extracted from the World Giving Index reports.
Independent Variable:
Individualism Index (Individualism): The level of individualism across countries was assessed using Hofstede's Individualism–Collectivism Index (2001), which reflects the degree of individuals’ integration into social groups. In individualistic societies, people tend to form looser bonds and assume responsibility for themselves and their immediate families. In contrast, collectivist societies feature stronger and more supportive in-group relationships. However, in this study, the focus is on a specific form of individualism, which is not equated with selfishness or social indifference, but is rather viewed as a set of ethical and cultural norms that place the individual at the center of social action. Therefore, while Hofstede’s index was used as the measurement tool, the emphasis was placed on the role of personal values and responsibility in prosocial behavior and generosity, particularly within the cultural context of Iran.
Overall, the Individualism–Collectivism Index measures the extent to which a society endorses and promotes individualistic values as opposed to collectivist ones, ranging from 0 (most collectivist) to 100 (most individualist). Data for this variable were obtained from the World Values Survey database.
Control Variables:
GDP per capita (GDP): Measured based on the growth rate of per capita Gross Domestic Product. Data were extracted from the World Bank’s WDI database.
Economic Freedom (Freedom): Defined and measured according to the Heritage Foundation’s Index of Economic Freedom.
Income Inequality (GINI): Measured using the Gini coefficient. Data were sourced from the World Bank’s WDI database.
Education Level (Education): Measured by the rate of higher education graduates in the country. Data were obtained from the World Bank’s WDI database.
Corruption (Corruption): Measured based on the Control of Corruption Index. Data were sourced from the World Bank’s WDI database.
Government Size (Government size): Defined as the share of government consumption expenditures in GDP. Data were extracted from the World Bank’s WDI database.
Data were collected from official national and international databases. The Autoregressive Distributed Lag (ARDL) model was applied to estimate both short-term and long-term relationships between variables. The analysis investigated two causal pathways: a direct mechanism through which individualism influences personal motivations to donate, and an indirect mechanism where individualism affects generosity by enhancing economic freedom.
Results and Discussion
The results of the estimated model indicate that the variables of individualism, economic growth, economic freedom, income inequality, education level, corruption, and government size have significant effects on the level of charitable giving in Iran. Specifically, a 1% increase in individualism leads to a 0.43% rise in generosity, which is statistically significant at the 1% level. Additionally, a 1% increase in economic growth and economic freedom results in increases of 0.004% and 1.16% in generosity, respectively—both significant at the 1% level. Income inequality and government size also have positive and statistically significant effects of 0.85% and 0.87%, respectively, on generosity, at the 1% significance level. Moreover, education level has a positive effect of 0.28% on generosity, which is significant at the 5% level. In contrast, corruption has a negative effect of 0.34% on the level of generosity, significant at the 1% level.
The empirical results supported both proposed mechanisms. Individualism showed a statistically significant positive effect on the level of charitable giving, indicating that personal responsibility and autonomy can enhance generosity. Economic freedom also positively influenced charitable activities by enabling a more supportive institutional environment. In addition, economic growth, higher education levels, reduced income inequality, and greater government size were positively associated with generosity, while corruption had a strong negative impact. These findings challenge the conventional assumption that collectivism is inherently more charitable and suggest that individualism, when properly contextualized within the cultural framework of Iran, can reinforce ethical norms and civic responsibility. The study contributes to a nuanced understanding of the cultural determinants of prosocial behavior in developing countries.
Conclusion
The findings of this study challenged the traditional notion that individualism undermines prosocial behavior by revealing its positive role in promoting charitable giving within Iranian society. When institutionalized within the cultural framework, individualism encouraged personal responsibility and voluntary generosity, both directly and through the enhancement of economic freedom. The research concluded that individualism, rather than being inherently detrimental to social ethics, can foster civic engagement and ethical behavior when supported by appropriate economic and institutional structures. These insights highlight the importance of considering cultural values in policy-making aimed at increasing philanthropic activities in developing societies.
Acknowledgments
The authors would like to express their gratitude to the editorial board of the journal for their support and consideration.
Keywords
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