Interesting reading, although I wonder if there are alternative or complementary explanations - instead of direct cultural transmission, one could think of different economic paths due to different starting levels of industrialization, infrastructure, education etc., which then generate different cultural clusters. Culture will also influence the economy, of course, in a sort of co-evolution.
Btw, if you wanted to apply this to Italy (another Italian here!), I think you should not look at coalitions but single parties within them. The Austro-Hungarian regions corresponds pretty well to the Lega Nord heartlands, for example.
But this also allows me to give an example of the alternative explanation. The historic Lega Nord vote corresponds even better with the areas where the economy is dominated by small but dynamic family-run manufacturing (north Italy, and east of Milan). You can think of Lega, pre-2010, as representing conservative voters coming from this economic and cultural background. The reasons why that part of the country ended up with this specific economic model have, as far as I know, little to do with culture and more with the timing and conditions of industrialization. Which in turn, at least in part depended on the infrastructure, institutions and levels of human capital left over from the pre-italy period.
Edit: On a second thought, you could invoke cultural history and inertia to explain the differences between eastern Lombardy and Veneto on one side, and Emilia-Romagna and Tuscany on the other. Both areas followed similar economic paths as far as I know, but they belonged to different states pre-unification and they are culturally different in a way that is very clear in the polls.
Consider also that when a zero-sum game is embedded in a positive-sum one, often the most effective way to negotiate is to threaten to walk away from the positive-sum game if you don't get a bigger share of the spoils (e.g. threaten to leave the job if you don't get a rise). The simplified version is the ultimatum game: https://en.wikipedia.org/wiki/Ultimatum_game.
This also means that holding a positive-sum trade sacred has the side effect of freezing the zero-sum part of it to the status quo.
I think this happens to many scientists. I found myself in a similar situation once - we could not have done better at the time, but we could have noticed that the tools we used were not sufficient. Fortunately, by the time we noticed we had better tools and we found that the conclusions were still valid, even if some quantitative results were pretty inaccurate. As you, I wanted to submit an erratum, but my boss insisted to include the results in another related paper instead. I still feel that an erratum would have been better, but I think he was worried that the referee would be someone who disliked him for unrelated reasons.
If I understand correctly, your paper was about a new method and it turns out that the method itself is fatally flawed. However, what you report is what comes out of the approach, and there is a problem with the basic idea which was not trivial to see. The thing you feel guilty about is omitting the outlier from the results, but that you cannot fix anyway. Is this more or less it?
I don't think you should retract. It understand the impulse if you feel there is no value left in the paper, but it seems to me that retraction is mostly done for misconduct, if the paper contains something that is factually wrong (you wrote you did X but actually you did Y), or if your results come out of not adopting established best practices.
An erratum would be good -because it's linked to the paper- but in your case it may be difficult to write. On one hand, the whole paper is invalidated. On the other hand, there is no factual error to correct, and a lot of papers are based on ideas which looked good at the time but are found to be wrong by later literature. Most of them I would say :) Scientists are not systematically publishing erratums when they recognize their proposed method was not as good as hoped.
In the end, I think your boss suggestion of making another paper may be the best in your case. You would be discussing why method X, which seems like a good idea, does not work after better analysis, the subject of hundreds of papers every year. The fact that you are the ones that proposed method X is no problem. If someone gets the idea of using that approach, given that it's 15 years old they will check more recent literature I hope. Nowadays it's easy to check the citing papers with google scholar.
I understand if you feel like you are hiding the fact that you had those suspicious results from the beginning, but you didn't figure out they were important until later. Also, the important thing is to correct the mistake in any form. If your boss finds the correction low priority, discuss with your colleague that did some work for for the new paper, and try to find the time to present your boss with a draft.