Over the past 20 years, economists have come to realize that religion is linked inextricably to their subject matter, from fertility choices in the household, to risk-sharing schemes in a village, to large-scale political movements, and to economic growth. A deeper understanding of religion is perhaps now more important than ever before.
The International Economic Association (IEA) Roundtable on the Economics of Religion was held at St Catharineâs College, Cambridge, on 10â11 July 2017 to take stock of developments to date in the economics of religion and to chart new directions for the field. Organized by Sriya Iyer (Cambridge), Jared Rubin (Chapman), and Jean-Paul Carvalho (UC Irvine), the Roundtable brought together some of the worldâs most distinguished economists and other scholars to debate and discuss the role of religion in society today.
The IEA Roundtable began with an opening address by Bishop Marcelo SĂĄnchez Sorondo, Chancellor of the Pontifical Academies of Sciences and Social Sciences from the Vatican, who spoke about key points from the Laudato si, the Papal Encyclical document on environmental protection and climate change, highlighting the need for effective action in these areas. The highlight was a panel discussion on the role of state religion, religious freedoms, institutions, and growth featuring Robert Barro, Timur Kuran, Tim Besley, and Sascha Becker and a second panel on how religion had shaped the world with Partha Dasgupta, Rachel McCleary, David Maxwell, Larry Iannaccone, and Michael McBride. The first panel explored questions such as religion and innovation, religious education, the role of women, findings on religious participation and economic growth, the role of state religion, the debates about the clash of civilizations, and the role of Islamic and Christian fundamentalism in the world today. The second panel keenly discussed Pentecostalism in Africa and Latin America, how to think about definitions of religion, the relationship between religion and the natural world, and how this relates to economic development. The individual sessions ranged from exploring economic theory and religion, history and religion, religious giving, and reformations and religious freedoms. To that end, the dialogue about religion at the Roundtable was truly wide-ranging and inter-disciplinary.
In order to bring together and to consolidate the many interesting debates and lively discussions at the Roundtable, and more widely, this volume documents the tremendous growth in research on religion in economics. The aim is to provide an introduction to the economics of religion for academics, professionals, and students and to chart and to possibly shape the rapidly expanding frontiers of the field.
Although Adam Smith devoted an entire chapter to religious organizations in his foundational work, The Wealth of Nations, the economic analysis of religion was largely neglected for nearly two centuries. This began to change in the late 1980s. As with many movements, the growth in the economics of religion is due to both personal and impersonal forces. In personal terms, the field owes an immense debt to Larry Iannaccone for his seminal contributions (e.g. Iannaccone 1988, 1990, 1992), most importantly his canonical model of religious clubs, as well as his organizational work and tireless advocacy for the field. Larry was brave enough to venture into this territory when it was considered unfashionable and unprofitable to do so. He can rightly be called the father of the economics of religion.
By 1998, there were enough papers in religion written by social scientists to warrant a review piece, Iannacconeâs âIntroduction to the Economics of Religionâ in the Journal of Economic Literature. Most work in the field up to that pointâinspired by Iannaccone as well as sociologists Rodney Stark and Roger Finkeâattempted to explain religious phenomena via the rational choice framework. This framework proved extremely flexible, permitting social scientists to explore a variety of religious phenomena such as church attendance (Azzi and Ehrenberg 1975), medieval Church doctrine (Ekelund et al. 1989, 1996), religious markets (Finke and Stark 1992; Montgomery 1996; Iannaccone et al. 1997), religious organizations (Iannaccone 1992, 1994), religious practice (Finke and Stark 1988; Iannaccone 1990), and the underpinnings of church and sect (Iannaccone 1988).
The two decades following Iannacconeâs 1998 survey have seen a vast acceleration in the quantity and quality of articles in the field. The current state of research in the field was brought up-to-date by Sriya Iyerâs Journal of Economic Literature survey on the new economics of religion in 2016 (Iyer 2016). There have been edited volumes by leading scholars in the field (McCleary 2011). There are also major research monographs that focus on the Middle East and on South Asia (Berman 2009; Kuran 2011; Iyigun 2015; Rubin 2017; Platteau 2017; Iyer 2018). Other works that have attempted to review the literature are a survey on Islam and contemporary performance (Kuran forthcoming) and recent social scientific work on the Reformation (Becker et al. 2016). Articles aside, one important pathway for disseminating research in this field has been the growth of the ASREC (Association for the Study of Religion, Economics, and Culture) Annual Conference, which is now an important event in the field.
Another development of note is the significant increase in the number of articles in the field being published in top economics and political science journals. Publications in top journals encourage graduate students and young scholars to undertake research in the field, seeing it as a fruitful career path. And indeed, within economics and political science alone, the top journals have become much more receptive to research on religion. For instance, between 2000 and 2007 there were a total of 20 articles on religion in the top 8 economics and top 3 political science journals. However, between 2016 and 2018 alone, 31 articles were either published or accepted by these journals (calculations by Rubin). This research covers a wide range of topics related to religion. Fifty-one of the 115 articles published between 2000 and 2018 in top journals take religion as the dependent variable and 64 take religion as the independent variable. Of those that take religion as the dependent variable, important recent findings (since 2012) include the economic and political causes of increased Islamization (Carvalho 2013; Hegghammer 2013; Gould and Klor 2016; Valdez 2016; Binzel and Carvalho 2017; Nellis and Siddiqui 2018; Brooke and Ketchley 2018), economic causes of inter-religion violence (Jha 2013; Mitra and Ray 2014), and the causes of religious change (with much attention focused on the Reformation; Cantoni 2012; Rubin 2014). Of those that take religion as the independent variable, important recent findings include the (sometimes negative, sometimes positive) effect of religion on economic growth (Almond et al. 2015; Campante and Yanagizawa-Drott 2015), the effects of religion on political participation (McKenzie and Rouse 2013; Gaskins et al. 2013a, b; Stegmueller 2013; McClendon and Riedl 2015), the long-run economic and political effects of pre-modern Jewish economic activity and persecutions (Voigtlaender and Voth 2012; Pascali 2016; Anderson et al. 2017; Spenkuch and Tillmann 2018), the long-run effect of Christian missionary activity on economic and political outcomes (Woodberry 2012; CastellĂł-Climent et al. forthcoming), the economic and social effects of the Reformation (Cantoni 2015; Becker and Woessmann 2018; Cantoni et al. 2018), and the effects of religion on the mental health of adolescents (Fruehwirth et al. forthcoming).
There are numerous reasons for these developments. First, social scientific studies in religion have taken full advantage of the âempirical revolutionâ that has pervaded economics and political science since the early 2000s. Techniques such as instrumental variables, regression discontinuity, and natural experiments are perfectly suited for identifying aspects of religion that were considered to be in a âblack boxâ as recently as the 1990s. These techniques take advantage of new sources of data made available through digitization to answer questions previously thought unanswerable (see, e.g. Gruber and Hungerman 2008; Iyigun 2008; Becker and Woessmann 2009; Rubin 2014; Anderson et al. 2017; Cantoni et al. 2018). Second, in large part due to the empirical techniques described above, studies in religion have seen an acute resurgence in two fields: development and economic history. It has become increasingly clear that religion (and culture) plays a critical role in economic developmentâor lack thereofâand understanding the mechanisms through which religion affects underdeveloped economies, and economic growth more generally, has gained first-order importance in the literature (Barro and McCleary 2003; Guiso et al. 2003; Noland 2005; Durlauf et al. 2011; Woodberry 2012; Meyersson 2014; Campante and Yanagizawa-Drott 2015). Meanwhile, economic historians have ârediscoveredâ religion, in the process shedding light on all sorts of issues such as long-run economic divergence (Kuran 2011; Rubin 2017), human capital accumulation (Becker and Woessmann 2009; Botticini and Eckstein 2012; Chaney 2016; Cantoni et al. 2018), and religious/political movements (Iyigun 2008, 2015; Chaney 2013; Rubin 2014; Johnson and Koyama 2019; Michalopoulos et al. forthcoming; Iyer and Shirvastava 2018). Third, developments in game theory, in particular the application and absorption of game theory into microeconomics and new evolutionary models of social norms (e.g. Young 1998), have provided sophisticated tools for modeling religious behavior (Bisin and Verdier 2000; Carvalho 2013; BĂ©nabou et al. 2016; Seror 2018).
The goal then of this volume is to take stock of recent advancements in the economics of religion. This is no small task; as we have already noted, the field is developing rapidly, with advances being made on numerous fronts. This volume focuses on three sets of contributions which we believe covers most of the cutting-edge research in the field. Part I of our volume, titled âTheoretical Advances in the Economics of Religion,â reviews the theoretical foundations of the economics of religion, which was built in the 1990s on models of religious clubs and religious markets. These ânewâ foundations include models of religious belief formation, cultural transmission, and religious extremism. Most of the recent growth in th...