It's a bit late here and I'm sleepy but let me give this a try.
I have been living in and studying the indigenous Asian peoples in Vietnam, China, Thailand and Cambodia for about 10 years now. From what I have seen (especially in the poorer countries) is that there is not enough money in the Government coffers for any real expenditures towards welfare. In these places, centuries old systems exist that are based on group, clan, and or lineage obligation networks that stretch across social boundaries.
These systems are very similar to what you would find in a pre-industrial agrarian group at the egalitarian level of social stratification dating from several centuries to several KYA. You may also find these features in contemporary farming communities that have had little contact with technology and (dare I say) "the outside world".
Village settings in Cambodia are exceptionally bleak. The average yearly salary for a family might be $100. Nonetheless the individual people in the people in the village act as one unit. If for instance an 18 year old boy wants to leave the village and go to the city to become a moto- bike taxi driver and needs $800 dollars to buy the moto- the village put their resources together for the purchase- knowing that reciprocity will be given in various forms and the "debt" will be payed...eventually.
For clarification I need to express here that in many of these villages the concept of ownership does not really exist. Their livestock roam freely and if some get lost or eaten by another village member- there is no problem.
In Thailand their exists ( and I believe this dates back from their Chinese heritage) a tremendous amount of Filial Piety (or respect for elders). This means that as the parents get old, the children spend their resources, time, and money to take care of them. This includes dropping out of University, quitting your job and coming back to the village or town where your parents live- if and when they need assistance. It is a life long obligation and it usually falls upon the eldest sibling to do this. Usually a good portion of the offspring monthly salary will be sent to parents that are in need.
These systems are much more complicated than I describe here- but they work because they are interwoven with lifestyle and settlement patterns. These people usually like to live in a house where there is a huge extended family (if possible). Nucleated settlement patterns are sort of something new and the people are just not comfortable being alone/living alone. They are very much a communal society with multi-textured rules for behavior, and conforming to these cultural maxims is paramount to the people. It just so happens that their cultural paradigm has welfare (among a million other things) built into it. For instance- In the Thai world if someone does you a favor, perhaps your University Professor gets you a good job after graduation, you are expected to repay in some way at some undetermined time in the future. This doesn't mean the student is palpitating at how they will repay the gift but rather if an opportunity comes up in the future to do repay the favor the student should do so. If they do not reciprocate, their is no real punishment in the physical sense but the person will be labeled as "agatangnue" or ungrateful. From a cultural perspective this is possibly the worst transgression and the shame the person would feel knowing that the cultural group knows of the transgression in unbearable- a person might even find themselves ostracized by the community at large. In Thai this means people will still act friendly to you but you probably not have access to future trade circles or reciprocity networks- thus limiting the economic viability of the transgressor.
The culture is so thick here that if I loose my temper just once in public-that person I yelled at will NEVER do business with me again. They will smile and act polite when they see you and act as if everything is fine- but in all actuality the door is now closed.
All said- there is some flexibility in the systems and different situations sometimes get different results depending on the variables, their is also the dichotomy between the "real" and the "expected" within any culture but the above rules (while not 100% static) hold true most of the time.
Klaus Rominger paints a picture of a communitarian society that many anthropologists have encountered in their fieldwork. It is the classic generalized reciprocity that Marshall Sahlins described in his Stone Age Economics. I encountered something similar among the Sisala of Northern Ghana where I did my fieldwork. Nonetheless, I find it difficult to believe that among the people studied by Klaus that if roaming cattle are eaten by others that there are no social consequences. I defer to him, as I have not studied those people, but in my experience there is a gap between the ideal norms and the real way things get worked out on the ground, in everyday life.
The Sisala also have a concept of filial piety but not all people observe it on an equal basis. I observed educated men returning from work in the south coming home with lots of new gadgets – a bicycle, shotgun, radio, for example – who did not share these things with their kin. On the one hand, there were those who made the rounds of their aged kin to give them kola nuts and tobacco as a sign of respect.
In general, there is much more cooperation among villagers than one finds, for example, in an American neighborhood, but it is not a perfect system of indigenous welfare, the term used by Ainslee. I returned to Sisalaland about 30 years after my initial fieldwork to find one of my key informants, a diviner of some renown, sitting blind and naked in the dirt of his hut floor. His relatives had not been feeding him well, but were barely keeping him alive. I was able to feed him, get him clothed and left money with reliable kin to continue feeding him, but I had my doubts whether the care I had initiated would continue. In studying such a subject, Ainslee, one always has to look for the positive and negative cases with regard to a concept. Also, in modern ethnography we have to be aware that modernity often touches these people and the younger educated folk who go off to the cities are not the same as those they leave behind in the village. When they return they change village life in many ways. Sisala elders grumble about this as they try to perpetuate the institutions such as ancestral sacrifice that regenerate filial piety. They are upset that the young no longer participate in the sacrifices and will not contribute to buy the animals or to maintain or repair shrines. The way the system should work is not always the way the system plays out in real life. The duty of the anthropological fieldworker is to record both.
That is a very interesting idea. I think in a way it disrupts the normal evolutionary biological imperatives that are the products of our genome and our cultural heritage. This brings up the topic discussed in the late 1800's called social Darwinism.
To answer another of your questions (as best I can) I believe institutionalized welfare and entitlement State Nations do their Nations a grave disservice because it completely negates and makes unnecessary the functionalist theory of inequality.
I surmise, that is the main reason why communism failed globally. It is also one reason one reason why Pol Pot's revolution in Cambodia failed, resulting in a genocide of perhaps 20% of the Khmer peoples, plunging the country into what can best be described as the stone age. The functionalist theory of inequality is more than Pavlovian modeling, it is the theoretical explanation for the reason humans have survived and adapted as Homo Sapiens Sapiens- it's in our DNA to adapt and overcome- to win- to out compete the other. Naturally some humans have learned to have either 1) enough reflexive thought to overcome many of the more base behaviors that are embedded in their DNA, 2) Variant DNA code that that results in a genotype that is less aggressive, or 3) Have been acculturated or acculturated to behave within (dare I say) a more moral/ethical way. But the welfare State isn't helping any of that along. Not in it's present form anyway. It could be rewritten to incorporate human genotype (as it relates to the biological imperative), be culture specific, and still align static (previously functioning) economic systems with a functionalist theory of inequality- thereby resulting in a welfare State consisting of people that receive subsistence long enough to gain an Education (formal and informal) in order to move upward across social and economic boundaries.
On your last question:
Perhaps welfare (replaces) social norms and this might then disrupt society on many levels of which I have only touched the surface on here.
Sorry- it's late and I have to edit the above piece- Genotype should read phenotype etc. etc.etc.
I'm so tired I keep missing the keys