History has shown that shame cultures, once they reach a certain level of complexity,

become guilt cultures.

and Medieval Europe is a fully-developed guilt culture.

But what is the difference between shame and guilt? And why is the move from shame
to guilt rather than vice versa?

Shame is what we feel when we are caught doing something wrong. What is "wrong"
emerges through cultural/social interactions and is typically associated with anti-social
behavior, behaviors that will weaken the social network. The key here is that one does
not feel bad about doing wrong if one is not caught doing it by anyone.

It is important to do good in public, where everyone is watching you, but that doesn't
mean one has to do good in private, where nobody is watching you.

Thus, in a shame culture, all generosity must be made as public and obvious as
possible. People have to know you are being generous. The result is much more charity,
if charity is seen as a good behavior.

While shame is a social regulator of behavior, guilt is an internal regulator of behavior.

In a guilt culture, the individual internalizes the culture's morals. That is, you don't
have to be caught to be doing wrong. You judge yourself, and that internal judgment is
called guilt.

Thus, in a guilt culture, generosity ought to be made in private, quietly, so that what
matters is the giving itself and the internal state it creates in you. Among those who
have so internalized generosity as a virtue will of course be quite generous. But among
those who have not done so, you may be assured that there will be less generosity
exhibited. Since people aren't making a big deal of donating, not doing so won't be
noticed. People will just assume you are giving what you can, quietly. The result, one
would imagine, would be a slow reduction of charitable gifts over time, as free riders
recognized the advantages inherent in a guilt culture when it comes to gift giving.

Of course, in a guilt culture, you are going to be less likely to do things like cheat on
your spouse, because you will feel guilty for doing so. One won't cheat to avoid feeling
that negative feeling.

Thus we see morals starting off as extremely social, then becoming more and more
internalized over time. However, what if more and more people start becoming free
riders? In a guilt culture, it is assumed that everyone feels guilty for doing bad. But not
everyone does. One may not feel guilt at all (be a sociopath) or one may disagree with
some aspect of the prevailing moral system. One can thus "sin in one's heart" and not
sin in society -- thus acting as a free rider on the moral system. It is much harder to be
a free rider in a shame culture, because what you do or don't do is expected to be done
out in the open, where everyone can see you.

What we have seen in Western culture is an increase in free riders on the moral system.
The end result is our insistence that no one be able to judge us about anything. While
this does allow for a certain pluralism in morals and values, it also results in an
eventual dissolution of guilt itself. Now people are neither guilty nor ashamed. This
may result in a certain cosmopolitanism and acceptance of others' world views, life
styles, values, etc., but it also creates a situation in which there is a perceived gap to be
filled when it comes to philanthropy. This is where government often steps in, and the
crowding out situation created by governments only exacerbate the problem. People
see themselves as being generous through the taxes being taken from them, and so
they in turn are less personally generous. Which creates the conditions for the
argument for more government involvement to fill the new gaps.

Thus we see a trade-off. Shame cultures are potentially more generous, but shame
creates far more cultural conformity (with which comes ingroup-outgroup politics).
Guilt cultures are as generous as the amount of actual guilt found in the population. As
this goes down over time, due to the problem of free riders, generosity may decrease,
but cosmopolitan attitudes also increase.

This is why rural cultures are very generous toward each other, but urban cultures tend
to be less generous overall in their giving, especially within their own neighborhoods.
Urban givers tend to be more generous toward unknown others.

There is value to be found in both guilt and shame. We are a social species, and public
displays of generosity in fact encourages others to be generous as well. The network
effects of the Ice Bucket Challenge is a great example of this. Not only have donations
to ALS gone through the roof, but charitable donations to other organizations has
increased overall. Taking the challenge is a public display of generosity that leads to
private displays of generosity. Shame and guilt can co-exist, and together they can
make us better people overall. We shouldn't only be virtuous in public, but we
shouldn't keep our virtue private, either.
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I expand on this here. And, even more so, here.