When culture meets policy: How individualism shapes government financial assistance in times of crisis

Government fiscal responses to crises vary substantially across countries, yet the role of national culture remains largely unexplored. Prior research emphasizes fiscal space, institutional quality, and political factors as the main drivers. Using cross-country data from 67 economies during the COVID-19 pandemic, we combine panel, cross-sectional, and instrumental-variable estimations to examine whether individualism shapes government financial assistance commitments. We find that more individualistic countries commit to larger fiscal support packages, particularly through guarantees, asset purchases, and credit facilities. A one-standard-deviation increase in individualism is associated with approximately 20% higher government financial commitments as a share of GDP. Democratic governance partially mediates this relationship, while institutional quality amplifies it and central bank independence attenuates it. These findings establish national culture as a systematic and previously underexplored determinant of crisis-time fiscal policy, with implications for the design of international financial assistance programs.