Via Marginal Revolution, I came across this paper which purports to explain why the United States does not have a European-type welfare state: the US is a lot more ethnically diverse and ethnically diverse countries tend to spend very little on welfare.

I was at first skeptical: American libertarianism dates back to the time before Thoreau, before slavery was abolished; it is better explained as a by-product of the historical circumstances which brought the United States into being - circumstances that instilled a strong distrust of central government in most early Americans.

But the evidence presented in the paper is persuasive: whatever the origins of American libertarianism are, its reasonable to say that ethnic diversity accounts for much of the impetus that kept it going during the twentieth century. Even if the United States is not considered, it is a fact that there is a definite negative correlation between diversity and social spending; such a correlation even exists among US states: