Economic theory does not exist in a vacuum. In every society the dynamics of politics, religion and economy influence each other even if it is always challenging to measure to what extent one effects the other.
The effect of religion on economic growth has often come under the scrutiny of economists and sociologists, although the latter seem to be more interested in the subject. An important seminal work on this topic is The Protestant Ethic and the Spirit of Capitalism published by Max Weber in 1930. The main conclusion of Weber was that “the Protestant work ethic is what made America and Europe rich”.
Many sociologists and economists argue that Weber’s conclusion is too simplistic, although few have completely written off this theory. More recently, Niall Ferguson, a British historian who works in New York, stated that “today’s economic stagnation in Germany and the north of Europe is the result of the decline in religious belief and practice in the last forty years”. He goes further and states that the Protestant work ethic no longer exists.
If we could explain the present economic stagnation in Europe through the decline of religious practice, I am sure that our political leaders would urge us to go more frequently to church – and they would lead by example. Reality is, of course, more complex.
Sociologists and economists normally tend to agree that when the level of education increases in a particular society one usually sees a decline in religious practice. It is also generally accepted that those who live in rural areas practise their religion more than those who live in towns. Another reality is that religious practice in the US seems to be increasing, while it is declining in Europe. More controversially, many sociologists believe that countries where the practice of the Catholic religion prevails suffer from lower economic growth.
In 2003, Robert Barro and Rachel McCleary, professors at the Harvard University, conducted a study entitled Religion and Economic Growth. They wanted to establish whether there was any connection between religious practice and economic growth in selected countries. They gathered statistics from 59 countries between 1980 and 1999. They asked people whether they believed in God, in heaven, in hell, and whether they went to church at least once a month. They had to resolve a difficult dilemma: does religious practice lead to GDP growth, or does growth in GDP influence religious practice?
Countries where the practice of the Catholic religion prevails suffer from lower economic growth
The conclusions of the Barro and McCleary study are astonishing. According to these researchers “belief in an afterlife has the highest correlation with economic growth” and, to be more specific, belief that hell truly exists is what drives most people to be more industrious and productive. Maybe this is why some politicians threaten the electorate with fire and brimstone if they do not follow their advice.
So, if religious belief rather than religious practice affects people’s attitude to work and indirectly to economic growth, why is it that China – where most people are atheists – is experiencing such impressive economic growth? After World War II, Japan – where apparently people do not fear hell fire – experienced impressive economic growth, while in the Philippines, where the Catholic faith predominates economic growth, has been much less impressive.
Another interesting study was that of Robin Grier, assistant professor of economics at the University of Tulane in New Orleans. In 1997, Grier published a study entitled The Effect of Religion on Economic Development: A Cross National Study of 63 former Colonies. He was curious to know why former Spanish and French colonies were experiencing lower economic growth than former British colonies. More specifically, Grier asked himself whether the predominance of the Catholic faith in South America was the cause of stagnant economic growth in this sub-continent.
Grier’s conclusions were in some ways similar to those of Weber, even if there are important exceptions that are still unexplained. It seems that the Protestant work ethic has indeed induced better economic growth in ex-British colonies, while ex-Spanish and French colonies showed more sluggish growth because of the characteristics of the Catholic religion.
Yet the region of Catholic Bavaria usually experiences the best economic growth in Germany. Moreover, some Catholic religious orders like the Jesuits, Benedictines and Franciscans promote the ethics of work in their pastoral mission.
Greeks living in America seem to be as devoutly religious as those living in Greece. But they are much richer and successful economically. No one so far has explained why.
johncassarwhtie@yahoo.com