Religion and Economic Growth across Countries

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Religion and Economic Growth across Countries

• Robert J. Barro and Rachel M. McClearyPresented
  byErita Narhetali and Luke Emeka Okafor
• Development Economics, Warsaw UniversityOctober
  2007

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Outline

• INTRODUCTION
• THEORIES ECONOMIC DEVELOPMENT VERSUS RELIGION
• DATA
• CROSS COUNTRY FINDINGS
• EXTENSIONS AUTHORS PERSPECTIVE
• APPRAISAL OF THE STUDY
• CONCLUSIONS

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INTRODUCTION

• Motivations of the study
• previous studies neglect the influence of culture
• need for incorporation of social and political
  variables
• then....
• They investigated the effects of church
  attendance and religious beliefs on economic
  growth

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INTRODUCTION....(Contd)

• The Instrumental Variables are
• the presence of state religion
• regulation of the religion market
• the composition of religious adherence
• An indicator of religious pluralism

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THEORIES ECONOMIC DEVELOPMENT VERSUS RELIGION

• Secularization hypothesis
• Market or supply side forces hypothesis
• greater state regulation of religion may decrease
  the efficiency of religion providers
• stimulates religious activities
• subsidy suppression (opposite!!)

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DATA

• Data sources
• Penn World Tables
• World Development Indicators of the World Bank
• International data on education
• Others....
• World Values Survey (WVS),
• International Social Survey Programme (ISSP),
• Gallup Millennium Survey (GMS)

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CROSS COUNTRY FINDINGS

• The panel system estimations yields a set of
  partial correlations between the measures of
  religiosity and selected economic variables
• Applied the use of SUR approach in the estimation

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Result...?!?

• ? For given religous belief, increases in church
  attendance tend to growth
• ? For given levels of church attendance, belief
  in hell, heaven, and an afterlife tend to
  growth

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Result...?!?

• ? For given religous belief, increases in church
  attendance tend to growth
• ? For given levels of church attendance, belief
  in hell, heaven, and an afterlife tend to
  growth

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EXTENSIONS OF THE STUDY Authors Perspectives

• The relationship between religious beliefs and
  individual behaviours or values
• The influence of church attendance on religious
  beliefs

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Our Appraisal.....
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Problems on basic assumption
RELIGION personal traits i.e. honesty,
ethics, openness to stranger CULTURE
Economic outcomes!?!
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Problems on methodology

• UNCLEAR relationship between
• Religiousity and Personal Traits they are not
  always correlated!
• Religious-driven Personal Traits and
  productivity
• Previous work by Weber (1904)
• Some cases Islam in Indonesia and CPI index ---

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Problems on methodology...(contd)

• The notion of hell is not same for some world
  religions
• Productive workforce is a product of many factors
• job security and satisfaction
• wages and salaries
• Education
• Training
• well-being
• security, surveillance and binding contracts etc

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Problems on methodology...(contd)

• The religious variables DO NOT explain human
  motivation in decision making process, i.e.
• Religious-driven consumption behaviour,
• insurances,
• banking system,
• business network, etc

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Problems on Econometrics

• Sample selection bias (????)

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Problems on Econometrics...(contd)

• The exogeneity of the instrumental variables to
  economic variables raises some doubts
• subsidies
• favourable tax policy
• religious bodies do not pay tax in some countries
• the difference between the state and the
  religious authorities in some countries are
  unclear

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Some interesting stuffs to discuss...?
FEAR OF HELL MIGHT FIRE UP THE ECONOMY?
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A FAITHFUL WORLD, BELIEVE IT OR NOT
Gallup International Millennium Survey
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A FAITHFUL WORLD, BELIEVE IT OR NOT (contd)
ATTEND RELIGIOUS SERVICES REGULARLY(More than
once a weekOnce a week)
Gallup International Millennium Survey
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Some recommendations

• Examine the relationship between religious values
  and decision making process, especially in
  economic related activities!

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Conclusions

• Religion on average is a two-edged sword
• contributes towards moral sound society in some
  sense
• contributes towards economic backwardness if
  handled improperly
• Religious beliefs may influence individuals to
  behave morally
• The link between religious beliefs and productive
  work attitudes is uncertain and need further
  investigation.

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Thank you.....?