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As the reach of large language models (LMs) expands globally, their ability to cater to diverse cultural contexts becomes crucial. Despite advancements in multilingual capabilities, models are not designed with appropriate cultural nuances. In this paper, we show that multilingual and Arabic monolingual LMs exhibit bias towards entities associated with Western culture. We introduce CAMeL, a novel resource of 628 naturally-occurring prompts and 20,368 entities spanning eight types that contrast Arab and Western cultures. CAMeL provides a foundation for measuring cultural biases in LMs through both extrinsic and intrinsic evaluations. Using CAMeL, we examine the cross-cultural performance in Arabic of 16 different LMs on tasks such as story generation, NER, and sentiment analysis, where we find concerning cases of stereotyping and cultural unfairness. We further test their text-infilling performance, revealing the incapability of appropriate adaptation to Arab cultural contexts. Finally, we analyze 6 Arabic pre-training corpora and find that commonly used sources such as Wikipedia may not be best suited to build culturally aware LMs, if used as they are without adjustment. We will make CAMeL publicly available at: https://github.com/tareknaous/camel
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