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For a few weeks this summer, the whole country has been singing about West Virginia. Take Me Home, Country Roads has become the American team’s World Cup anthem, belted out across stadiums, bars, and living rooms. As a West Virginia native, I have watched the spectacle with a full heart.
The affection usually stops at the scenery. Strangers tell me all the time that West Virginia is beautiful, and it is. It also ranks 49th among the states in income per person, at about $49,000 a year, ahead of only Mississippi. When people explain that gap, they reach for our culture. The accent. The biscuits and gravy. The trailers. The way we live. Appalachia remains one of the few places in America it is still acceptable to mock, and the mockery doubles as a folk theory of poverty: West Virginians are poor because of who they are.
I grew up in Gallipolis Ferry, West Virginia, on the Ohio River, looking across the water at Ohio. As I recounted in my first column, buying groceries or eating out meant driving twenty minutes up the river, crossing the bridge, and backtracking twenty minutes down the other side. The stores were in Ohio. The restaurants were in Ohio. The same river valley, the same people, and all the commerce sat on one bank.
That childhood annoyance became a career. As an economics graduate student at West Virginia University, I contributed to a book titled Unleashing Capitalism, in which twenty-five scholars asked why prosperity stops at the West Virginia border. Most of the chapters found what economists would expect to find. The culprit was policy. High taxes, heavy regulation, and a hostile legal climate were repelling business from our side of the river.
My chapter was the odd one out. I wrote about culture. West Virginians grow up on anti-capitalist stories, tales of company stores and exploited miners that the historical record largely debunks. Attitudes built on that folklore keep producing the policies that hold the state back. The policy explanation was spot on. But it was incomplete. The rules repelling business did not fall from the sky. They were voted in, year after year, by people whose distrust of markets was itself part of our inheritance.
Most of my research has since picked up where that chapter left off, but on a global scale. The puzzle I grew up staring at across the Ohio River is the oldest question in economics, the one Adam Smith asked in 1776 about the wealth of nations. Why are some countries rich and others poor? Prosperity stops at country borders even more sharply than at state lines. Some borders separate a tenfold difference in income. Between the richest and poorest countries, incomes differ by a factor of a hundred and life expectancy by about twenty-five years.
Most of my work asks whether culture explains those gaps, and if so, why and how. The answer, across many papers, is that culture matters a great deal. But my newest paper, written with Lewis Davis of Union College and recently accepted at the Southern Economic Journal, adds the part the folk theory leaves out. Culture is not destiny.
Does Culture Matter?
One of the most reliable findings in the economics of development is that individualist societies are richer. As I wrote in an earlier column, individualism does not mean isolation or selfishness. It is the view that individuals, rather than tribes, classes, or clans, are the basic unit of moral concern, that status should be earned rather than inherited, and that people are free to chart their own course and cooperate voluntarily. We measure it using surveys of hundreds of thousands of people across more than 100 countries spanning over 40 years, with questions that capture self-reliance, independence from family expectations, and tolerance for how others live.
Notice the problem this poses for the folk theory of Appalachia. No one who grew up in the mountains would call the culture collectivist. Self-reliance is close to the state religion. If culture alone decided prosperity, West Virginia would be a puzzle. Something else must be at work, and finding it requires asking a more precise question.
Direct, or Through the Rules?
Why are individualist societies richer? Values shape the millions of decisions people make every day, how hard to work, whether to start a business, whether to back a risky idea. That is culture working directly. Individualist societies also adopt particular kinds of rules, courts that protect property, sound currencies, open trade, and light regulation. The rules generate the wealth. That is culture working indirectly, through the rules it inspires.
Separating the two is a familiar kind of problem. Exercise seems to make people sharper at work. Is that the exercise itself, or does exercise improve sleep, and sleep improve focus? The answer matters most for the patient who cannot exercise. If the benefit travels mainly through sleep, she can capture most of it by fixing her sleep directly. Economists call the in-between step a mediator, and mediation analysis measures how much of an effect flows through each channel.
Why does the split matter? No government can prescribe a culture, and history’s attempts to engineer values directly, from forced conversions to forced assimilation, are a catalog of human rights abuses. Rules are different. Rules can be written, deleted, and reformed.
What We Find
In data covering roughly 100 countries, individualism and economic freedom are each independently associated with higher income per person. We measure economic freedom with the Fraser Institute’s Economic Freedom of the World index, which scores how free each economy is. It asks whether property is protected, contracts are enforced, money holds its value, trade moves freely across borders, and regulation stays light. The associations survive an extensive battery of controls for geography, political history, and other cultural traits.
We find that about half of individualism’s total effect on income travels through economic freedom. Split economic freedom into its parts and the picture sharpens. Roughly 40 percent of the effect runs through property rights institutions, the courts and legal protections that secure what people build. Another 27 percent runs through policy, sound money, open trade, and light regulation. About a third remains as culture operating directly on behavior. These results suggest that individualism enriches nations mostly by creating demand for good rules, and the rules deliver the growth.
When Rules Stand In for Culture
It is possible that free market rules pay off only in cultures primed for them. The data say otherwise. The returns to economic freedom are essentially the same at every level of individualism. For property rights institutions, the pattern is stronger than that. Their returns are nearly twice as large in the most collectivist societies as in the most individualist ones. Where the culture does not secure cooperation on its own, formal rules add the most. In the language of economics, culture and property rights are partial substitutes.
For a country, or a state, that is more collectivist, that is the most hopeful sentence in the paper. Most of the gains associated with individualism are not locked behind a value system. A substantial share of them may be within reach by adopting the rules that individualist societies tend to build.
The Rules, Not the Roots
Which brings me home. For most of my lifetime, West Virginia sat at or near the bottom of the Fraser Institute’s economic freedom rankings for the states, weighed down by high taxes and heavy regulation that discouraged business development. I watched those barriers empty out towns. And for decades, culture served as the excuse. Outsiders pointed to our roots to explain why we stayed poor. Policymakers found the story convenient too. If poverty was baked into the people, no one had to do the hard part and rewrite the rules.
The rules were always the part that could change. The Appalachian Mountains roll on into Tennessee. Same mountains. Different rules. Tennessee ranks second in all of North America on the economic freedom index, and readers of this column reap the benefits. Jobs have grown faster here than in the nation as a whole, wages have climbed with them, and the moving trucks keep coming, carrying families and businesses to a place where people want to live.
And West Virginia, at long last, has stopped accepting the excuse. A decade of reform has lifted it from the bottom of the economic freedom rankings to 30th in the 2025 report. Income always moves more slowly than policy. But it does move.
West Virginians live these country roads. The American team’s World Cup run has ended, but the song was simply on loan. If you need a Country Roads fix, tune into any Mountaineer game. In June, WVU’s baseball team reached its first College World Series, and Mountaineer fans took over Omaha, arm in arm, singing Country Roads after every win. College football kicks off August 29, and we will sing it after every victory this fall, the way we have for years. The rest of the country’s affection is overdue. And my research suggests something about the place behind the song. Culture deals the hand; institutions play it. Almost heaven was never the problem. The rules were, and rules can change.
Claudia Williamson Kramer is the Scott L. Probasco, Jr., Distinguished Chair of Free Enterprise, Professor of Economics, and Executive Director of the Center for Economic Education at UTC.
To hear more from Dr. Kramer, listen to her latest conversation on WUTC here: https://shorturl.at/CyWM0
