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Topic: Use of Religion to Stimulate Economic Growth

Use of Book: "Exploring the Humanities Creativity and Culture in the West" by Laurie
Schneider Adams
Include the relativity of "in god we trust" on American bills
Course: Humanities

Introduction

Religion is generally explained as being a set of general belief systems and

traditions that are practiced by a specific group of people in terms of prayers, rituals and

religious laws. It also includes traditions that have been observed culturally, historically

and through generations as also in being assumed as mystic experiences of faith. Early

literature in economics did not accept any significant association with economic growth

in society and was not researched in the field of economics. Max Waber (1930) was the

first scholar that associated religion with economic development in his book The

Protestant Ethic and the Spirit of Capitalism. He argued that Puritan thoughts and ethics

impacted the growth of capitalism because economic gains were a function of thoughts

and ethics. He established a distinct relationship amongst the quest for economic gains

and Protestantism in concluding that such patterns were appropriate for the growth of

capitalism and thus for the economic development of any country. Subsequently,

several empirical studies have established the clear causal association amongst religion

and economics. This paper will examine how religion is an important factor in

influencing economic growth and development.

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Main Body

A number of theories have been put forth in accounting for the relationship of

religion with economic development. There are theories that assert the role of rational

choice in religion and economic development. Such approaches consider the flexibility

of religion in terms of being a balanced economic response towards change in the

economic, ecological and political environment that religions operate in. Additionally,

other structural theories have encompassed the role of family socialization, social

systems and belief systems in other worldly and supernatural concepts. However,

irrespective of the traditions in which the issue is approached, the study of religion in the

context of investigating the interaction amongst religion and economic development

entails a lot of challenges. In order to evaluate the influence of religion on development

policies, endogenous interaction amongst religion and economic development has to be

investigated. An examination has to be done of the techniques and procedures required

in quantifying the interactions.

Religion is now known to supplement as well as stimulate economic growth and the

different aspects in which it does so are indeed complex in terms of the manner in which

it impacts economic development in varied regions and religions. Religion and religious
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associations are known to be strong instruments of service deliveries, social pressure

groups, empowerment, innovativeness and funding. Religious associations and groups

can provoke violent activities and model hierarchies. They can influence funding

patterns, oppose the empowerment of specific groups, deflect advocacy and indulge in

slanderous activities to prevent service deliveries.

Religion impacts economic development by promoting religious beliefs that

influence people in terms of human traits such as honesty, work ethics, thrift and

openness with unfamiliar people. For instance, the belief in heaven and hell influences

these traits by way of the creation of supposed incentives and penalties that connote

good and bad life time behaviors. In this context, organized religions and more

particularly, attendance of religious ceremonies, will mostly impact economic

performances in an indirect manner through influence of religious belief. Therefore it

can be perceived that if attendance at a church influences religious belief, it will further

influence individual attributes, which in turn will impact economic outcomes. Put

differently, religious beliefs are viewed as the main outcome of religion and attending

church is viewed as an input of religion. Hence, if people have unaltered belief systems,

an increase in church attendance will signify that religion is not as productive as it

should be; because in terms of time and goods, significant resources are being used to

achieve the desired outputs or belief systems. Thus, it is anticipated that in the context

of given religious belief systems, high incidence of church attendance reveals a

negative impact on economic outcomes.

Sabina Alkire (2004) examined different aspects of religion that affect development

and concluded that religion could directly influence an individual’s sense of satisfaction
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and personal success, which comprises of an essential component of human well

being. She associated religion with levels of happiness and held that if economic growth

aims at expanding the freedom as valued by individuals, then freedom of religion

becomes an important factor of economic development. She contended that religion

could become a realistic problem if religious organizations create hindrances in

economic development or perceive it as a threat because economic prosperity is usually

accompanied with the promotion of western moderate secular cultures and human

rights. Economic development is also adversely impacted when religion is used as a

façade for political and other related objectives. Pertinent examples in this context are

the issues of value conflicts surrounding methods of family planning such as abortion,

contraceptive measures, preventing HIV/AIDS and unreserved messages about sexual

ethics and empowerment of women. There are other issues also that are highlighted in

regard to secularism, religious places, dress code and adapting with external groups. In

the context of economic development, such traditions and values are often referred to

under the guise of culture.

It has been experienced by society and nations that though religious organizations

appear to be inspiring and benevolent, economic development is repeatedly and

adversely impacted by instances of violence and conflicts, mostly instigated by religious

groups. A great deal of research has been done in this regard, especially after the

September 11 attacks, on the role of religion in view of the increasing pattern of global

violence and conflicts. It is well known that armed groups in Bosnia, Middle East,

Chechnya, Central Asia, Sri Lanka and South Africa have directed their efforts through

support of religion. It cannot be denied that such conflicts worsen poverty situations and
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adversely impact economic development, thus requiring significant efforts to check the

harm being done because of cooperating with religious associations.

Although the intensity of being religious declines as a nation experiences economic

development, the effect of religion on development depends upon the particular

dimension of economic growth. For instance, the measure of religiosity is directly

associated with education levels and indirectly associated with urbanization. It is also

related positively with the number of children present at any given time in a society.

Research has proved that higher life expectancy is negatively associated with

attendance at church, although the relationship is positive in the context of religious

beliefs. When religion is sponsored by the state there is a positive relationship between

economic growth and measures of religiosity, perhaps because subsidies are provided

to state regulations of religion and for recognized religions. Religion is negatively related

with religious coercion that exists with the communist form of governments. It is

however observed that the eradication of communist governments resulted in the re-

establishment of religiosity in many erstwhile communist countries during the decade of

the 1990s.

Higher level of religious pluralism accompanied by the multiplicity of adhering to the

main religions is related to higher levels of religious beliefs and church attendance.

Amongst the different religions, the adherence of religious practices is more amongst

Catholics as compared with other religions, other than Islam. The maximum extent of

belief in heaven and hell is amongst Muslims followed by Catholics and then other

religions. Such belief systems have a direct impact on the propensity to work and on the

outcomes associated with economic development. In analyzing the determinant of

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religiosity it is possible to determine the variables that have a bearing on the effect of

religious beliefs on economic development. There is empirical evidence to suggest in

the context of religious beliefs that increase in church attendance will lead to reduced

economic growth. Contrastingly, higher levels of belief in after life, heaven and hell will

tend to enhance economic growth and development. It is also held by scholars that the

fear of going to hell after death is more powerful than the bait of being sent to heaven, in

the context of propensity to work and economic growth.

Economic growth is considerably impacted by factors such as state regulation of

religion, the degree of pluralism in religion and the extent of adherence amongst the

major religions. Higher level of religious belief stimulates economic growth because it

helps in sustaining different aspects of people’s behavioral patterns that improve

productivity in the economy. Higher level of church attendance hampers economic

growth because larger amount of resources are used by the religion sector. However

the intensity with which church attendance increases, will lead to appropriate increase in

belief, which will enhance economic growth.

Attendance patterns in church also determine the extent of social capital that is

developed by way of organized religion. Church attendance is known to substitute for

the influence of organized religion upon the law and regulation that impacts economic

behavior. Researchers have found that amongst different religious belief systems the

over all impact resulting due to enhanced church attendance is to effect economic

growth negatively. Such over all effects combine the resources that are utilized by the

religion sector, the social capital feature pertaining to this sector and the impact of

religiosity on the law and regulation prevalent at any given time. According to Sacerdote
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and Glaeser (2001), religious places have much relevance for civic organizations

because of the networking and interacting activities fostered by churches, which

becomes a significant factor of social capital. In this context, for given religious belief

systems, attendance at church will have a different and positive impact on economic

performances. Attendance in churches also measures the significance of organized

religious practices in any society and in this context organized religion could influence

the economy in reaching beyond the utilization of resources and promotion of belief

systems. For instance, organized religious systems can impact law and regulation that

influence economic rewards. Adversities in this regard include the restriction that could

be imposed upon insurance and credit markets and a general deterrent of the

willingness to make profits. Such channels allow the understanding of why church

attendance could prove to be a negative effect on economic development in the

presence of fixed religious beliefs amongst people.

There are possibilities of religious measures picking up reverse causation arising

from economic growth instead of from religiosity. For instance, over a consistently long

time period, economic development could lead nations to reduce the intensity of their

official religious policies and to change the regulatory system as applicable to religion.

In the context of the composition of religion, an important worry is about the shares

impacting economic growth directly instead of through their analytical contents for the

execution of the religiosity plans. Instead of measuring the belief systems of after life,

heaven and hell, if we consider only the relevance of belief in God, there is not much

positive impact on economic growth. This is possibly because most people when asked

the question whether they believe in God, invariably answered in the affirmative in
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indicating that they do believe in God in some sense. The professed belief in God could

signify very less religious conviction that has little relevance for economic development.

Another matter to consider is the relationship between religious beliefs and economic

development, which is dependent upon the principles of religious doctrines. For

instance, in Islam and Christianity, hell is representative of a final state but in other

religions such as Buddhism and Hinduism it represents a temporary hindrance on the

path to enlightenment. In view of the differences in doctrines, it may be expected that

going to hell has lesser economic implications amongst Buddhists and Hindus than

Christians. However nothing concrete has been ascertained in this regard because

there are insufficient data to give a fair representation of Hindus and Buddhists in this

regard.

Barro and McCleary (2003) have referred to Weber’s (1930) theory in assessing the

impact of religious belief and participation on the economic progress in a given country.

They used data for 59 nations that were obtained from the International Social Sciences

Program and the World Values Survey that were conducted between the years 1980 to

2000. The authors found that there was a great deal of variation in religious beliefs

related with strong belief systems and high levels of church attendance. It was found

that in the case of certain levels of church attendance and increase in religious belief, in

terms of belief in after life, heaven and hell, economic growth tended to increase. There

have been other studies that have relied on religious patterns in different religions over

different historical time periods. A lot of useful information has been gained by

researching Islam and Judaism. In the case of Islam a number of studies have been

done in the context of financial systems and zakat in some Middle East countries and
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the pattern in which Islamic banks use financing procedures to arrive at the

corresponding values of interest in overcoming problems related to religion. Studies

have also been done about historical financial activities and Islamic law as related to

poverty reduction programs in the Middle East. Research has also been done by using

historical statistics pertaining to the 8th and 9th centuries to examine the Jewish

occupational patterns in selecting people in urban and skilled occupational roles as

prompted by religious and educational considerations in the early centuries (Kliksberg,

2003).

Conclusion

The causal relation amongst religion and economic development is quite well

established although more research is required to be done and to investigate the matter

from all perspectives in view of the present research and investigations having

established conclusions only from a one way causation. Weber’s (1930) theory has

been well established in the context of Protestantism and although the association

between economic growth and religion is quite clear in this regard, there is need to

exhaustively ascertain as to how one impacts the other. Nevertheless it cannot be

denied that a nation’s religiosity significantly impacts the patterns of its economic

growth. Immense interest has been developing in this area over time and researchers

are still working to investigate the impact of religion on other aspects of growth such as

health, implementation of law, politics and fertility. It is pertinent to note that the

influence of different religions and their systems are responsible for the appealing fact
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about different nations and regions being more successful and flourishing than others.

Weber (1930) has rightly pointed out that in South Asia it was the cultural impact of

Islam and Hinduism that adversely impacted development and growth in the entire

region.
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Works Cited

Alkire Sabina, Religion and Development, The Elgar Companion to Development

Economics, 2004.

Barro Robert & McCleary Rachel, Religion and Economic Growth across Countries

American Sociological Review, Volume 69, No. 6. (October, 2003), pp. 761-782.

Kliksberg Bernardo, Social Justice: A Jewish Perspective, Jerusalem; Gefen Publishing

House, 2003.

Sacerdote B & Glaeser E L. Education and Religion, National Bureau of

Economic Research, working paper no. 8080, January, 2001.

Weber M, The Protestant Ethic and the Spirit of Capitalism, London, Allen &

Unwin, 1930.