Reciprocity and the Welfare State Christina M. Fong, Samuel Bowles and Herbert Gintis A man ought to be a friend to his friend and repay gift with gift. People should meet smiles with smiles and lies with treachery. The Edda, a 13th century collection of Norse epic verse. 1 Introduction 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 (Atkin- son 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 deeply held norms of reciprocity and conditional obligations to others. Economists have for the 411