Tuesday, November 17, 2009

Religion as an Economic Institution

Regular readers of this blog know one of my interests is the impact of economic institutions (the rules and organizations of a system) on our decision-making. Among the effects I find most interesting are those that are rooted in what I call "informal rules." These include beliefs and personal codes of conduct that we are exposed to by family, friends and other affiliations, including any religious upbringing. They are not "formal" in the sense that they are mandated by an authoritarian organization (government) with the power to provide and enforce incentives.

Not only do these beliefs affect our decision-making, but they can impact how we view the larger world around us. To this end, they are important. And they are often slow to change.

This brings us to two articles (HT to Arts & Letters Daily) that caught my eye this morning. The first is from The American, the online journal of the American Enterprise Institute - an ideologically conservative think-tank. The other is from an ideologically more liberal newspaper, The Boston Globe.

As I read them, they both seem to conclude that societies that tend towards religious freedom (including freedom from religion) tend to be more economically successful. This reinforces one of the themes in my Global Economics class: that trade can have a positive effect on and is positively affected by the open exchange of ideas.

The studies cited in both do not imply a causal relationship, merely a correlation that indicates a need for further study. Take this excerpt from the end of The Boston Globe piece.

McCleary (a researcher at Harvard) says the lesson of their results isn't that governments should boost religion, but simply that they should recognize that it has some value, and avoid regulating it too heavily.
I would welcome your observations on these articles.

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