Religion Matters

The results of such studies have consistently found that religious beliefs profoundly influence economic growth. For example, for given levels of church attendance, economic growth rises when certain religious beliefs increase. The beliefs that seem to be growth-promoting are those concerned with hell, heaven, and an afterlife. In contrast, growth is not related to belief in God. Across a broad group of countries, the average fraction of persons expressing belief in God is 80 percent, compared to only 38 percent for hell, 55 percent for heaven, and 58 percent for an afterlife. Thus, it seems that affirmation of belief in God is a reflexive response with little content. In contrast, the survey responses about beliefs in hell, heaven, and an afterlife are less often positive and apparently more indicative of the religious convictions that matter for economic performance. It should be noted, however, that the positive link between religious beliefs and economic growth depends on the nature of religious doctrine. Beliefs are growth-enhancing if the perceived punishments and rewards reinforce good behavior such as honesty and hard work. This relationship, however, would be reversed if the religious doctrine encouraged non-productive behavior such as violence. The generally positive results of the analysis suggest that this “dark side” of religion is atypical.

Another key finding is that, for given religious beliefs, greater participation in organized religious services—gauged by frequency of attendance at houses of worship—reduces economic growth. This result may seem paradoxical, given the earlier conclusion that religious convictions increase economic growth. Convictions such as a belief in heaven or hell might affect individuals by creating perceived punishments and rewards that relate to “good” and “bad” lifetime behavior— which in turn can influence behaviors like thrift, work ethic, and honesty that contribute to economic growth. But these values must come from somewhere in the fi rst place. Thus, if we assume that religious beliefs are fixed—as we do in our empirical work—an increase in attendance at houses of worship signifies that the religion sector is less productive. That is, more resources, in terms of time and goods, are being consumed by the religion sector for given outputs (the religious beliefs). Hence, the negative relationship between attendance at houses of worship and economic growth can be explained by a causal chain whereby attendance at houses of worship affects religious beliefs, which affects individual traits, which in turn affects economic performance. This dynamic can explain the otherwise puzzling result that higher church attendance reduces economic growth.

However, the story is not quite so simple. Attendance at houses of worship may have a beneficial impact on growth by instilling stronger religious beliefs—especially with regard to concepts like heaven, hell, and the afterlife, which are linked to higher economic growth. Thus, to calculate the overall effect, we have to know the extent to which higher religious input (gauged, for example, by church attendance) leads to higher religious output (beliefs). When religious beliefs and church attendance increase together, the response of economic growth is weak. That is, countries that are more religious overall—higher beliefs and higher attendance—tend, other things equal, to grow at about an average rate. By contrast, countries that have high levels of belief and relatively lower levels of attendance at houses of worship—such as the United Kingdom, Japan, and Scandinavian countries—seem to have historically high growth experiences.

The impact of attendance at houses of worship is further complicated by the fact that attendance may actually serve as a proxy for other dynamics at work. For example, it is possible that attendance may be important not because of its impact of religious beliefs, but because it contributes to the building of social networks and social capital through organized religious services. Similarly, the church-attendance variable may actually capture the influence of organized religion on laws and regulations that affect economic behavior. The overall empirical result of greater attendance is to reduce economic growth, but the precise mechanism for this result is still being studied and understood.

Figures 1 and 2 display some of the findings graphically. The horizontal axis in Figure 1 has a measure of the frequency of monthly church attendance in a country. The vertical axis shows the country’s growth rate of per capita GDP over a 10-year interval, which can be 1965-75, 1975- 85, or 1985-95. The variable plotted adjusts the observed growth rate for the effects of all of the explanatory variables other than monthly church attendance. Conceptually, the fitted, downward-sloping line shows how economic growth would fall if monthly attendance at houses of worship were to rise, while the other explanatory variables did not change. One of these explanatory variables is religious belief, in this case, belief in hell. Thus, the negative effect on growth applies when belonging (that is, church attendance) rises for a given level of believing.

Figure 2 is constructed analogously, except that the horizontal axis is a measure of belief in hell. In this case, the upward-sloping line shows how economic growth would rise if belief in hell were to increase, while the other explanatory variables—including monthly church attendance—were held constant. Hence, this positive effect on growth applies when believing (in this case, in hell) rises for given belonging.

Future Research

Studies like this one have yielded other empirical results, many of which are preliminary and require further research. First, there is some indication that the stick from belief in hell is more potent than the carrot from belief in heaven in terms of growth promotion. This assertion still requires greater corroboration from forthcoming data in the 2001 World Values Survey. These data will be particularly useful because they contain far greater representation of Muslim countries, which tend to have high levels of belief in hell and heaven.

Second, there is reason to anticipate that the effects of beliefs in hell and heaven on economic performance would be weaker in religions such as Hinduism and Buddhism, for which hell and heaven do not represent ultimate individual objectives. There is weak support for this proposition in current data, but again the forthcoming 2001 World Values Survey should provide helpful data which includes expanded coverage of countries in which the population adheres primarily to Buddhism or other Eastern religions.