Social contracts only work in high trust societies that are also ethnically and culturally homogenous so the only grumble citizens have is fighting over class and not race.

But if you have a very diverse society that operates on tribalism, then you need a strong rule of law with strong checks and bounds to weed out tribalism, but this doesn't come for free as policing and lawyering the behavior of all members of society to check if they aren't discriminating each other over immutable characteristics, is gonna costs the government and companies operating in this environment a lot of money, so you're gonna have higher operating costs. Which is why it's so much cheaper for US companies to hire in places like central europe where your payroll expense are mostly ICs and you don't need auxiliary armies of diversity consultants like in the US.