Chapter 13: Christianity and the Economy: Empirical Investigation

Religion is one of the important aspects of societal life. In most economies, religion is related to almost every aspect of societal institutions and functions. Religion determines how an individual interacts with his/her surroundings, what type of work to engage in, how to raise children in a family and how some institutions are organized and functions in a given economy. Many contemporary economic issues have a significant overlap with many teachings of different religions. These economic variables that intersect with religion include economic growth, poverty, income inequality, total factor productivity, and bilateral and/or multilateral relationships through trade and investment.

Although in most of the modern world, the state and religion are claimed to be independent of each other, yet due to its historical influence and close association with the state politics, religion and the teachings of religion have provided the foundations for various government economic policies. Thus, economics and religion, in many countries including the United States, are closer than what many might believe. Some studies argue that part of the reasons for the fundamental reforms in United States’ economic policies, including unemployment insurance and child labor laws is due to religious influence (Bateman & Kapstein 1999). Others such as Iannaccone (1998) have introduced economics of religion as a new field of economic research. Religion and economics are expected to influence each other in a sense that economic activities and outcomes can have ethical and moral consequences in a similar way that religion influences the nation’s economic and noneconomic policies. This implies that religion can be considered as both dependent and independent variables in empirical studies. In this paper, religion is used as the latter. Other studies have argued that there should be enough attention paid to understand the relationship between the evolution of markets and the changes in morals, culture, and institutions (Bowles, 1998; Friedman 2008). Without venturing into individual’s religions and their teachings, the economics of religion focuses on the demand and supply side of decisions by religious consumers and organizations.