Strong Reciprocity and the Welfare State

The modern welfare state is a remarkable human achievement. In the advanced economies, a substantial fraction of total income is regularly transferred from the better off to the less well off, and the governments that preside over these transfers are regularly endorsed by publics (Atkinson 1999). The modern welfare state is thus the most significant case in human history of a voluntary egalitarian redistribution of income among total strangers. What accounts for its popular support? We suggest below that a compelling case can be made that people support the welfare state because it conforms to a behavioral schema which we call strong reciprocity. Strong reciprocity is a propensity to cooperate and share with others similarly disposed, even at personal cost, and a willingness to punish those who violate cooperative and other social norms, even when punishing is personally costly and cannot be expected to entail net personal gains in the future.1 Economists have ∗To appear in Jean Mercier-Ythier, Serge Kolm and Louis-Andr’e (eds.) Handbook on the Economics of Giving, Reciprocity and Altruism (Amsterdam: Elsevier, 2004). Affiliations: Fong: Carnegie Mellon University; Bowles: University of Siena and Santa Fe Institute; Gintis: Santa Fe Institute and Columbia University. We would like to thank Rachel Locke for research assistance, Chris Boehm, Rob Boyd, Josh Cohen, Steve Farkas, Ernst Fehr, Marc Fleurbaey, Nancy Folbre, Martin Gilens, Kristin Hawkes, Serge Kolm, Larry Mead, Julio Rotemberg, Juliette Rouchier, Robert Shapiro, Elisabeth Wood and Erik Wright for helpful comments, and the John D. and Catherine T. MacArthur Foundation and the Santa Fe Institute for financial support. 1Strong reciprocity goes beyond self-interested forms of cooperation, which include tit-for-tat and what biologists call reciprocal altruism (Trivers 1971). Strong reciprocity is closer to the concept of reciprocity in Kolm (1984, 2000), who pioneered the analysis of reciprocity in economic theory.