Having a robust welfare state disincentives people to find work. In South Africa for example, the informal sector is not as robust, because so many of the unemployed are on Welfare. This hurts economic growth rates and the fiscal budgets for many countries. … "Welfare State" will have a long-term negative impact on this entity, which subtracts from the entity's value. "Welfare State" is an easy qualitative factor to overcome, so the investment will not have to spend much time trying to overcome this issue.