Direct and Indirect Effects of Individualism and Institutions on Homicides

The present paper evaluates whether people in highly individualistic cultures have a lower propensity to commit homicides, using data from 70 countries. Several previous papers report a significant negative correlation between these two variables, but it is not well established whether the effect of culture on this form of violent crime is direct or indirect. We estimate a structural equation model that includes: (a) the possibility that either culture or institutions affect the homicide rate, (b) a link between individualism and institutions and (c) credible exogenous information used as an instrumental variable for individualism. Our results show that individualistic nations generate a more effective judicial system, which is mainly responsible for the variation in homicide rates across countries. That is, individualism affects homicides only indirectly through the quality of legal institutions. We also find that different types of institutions have a similar relation to individualism, however, the moderating effect on homicides is more pronounced for legal or political institutions than for economic institutions.