And now for something completely different: the relationship between religion and economic performance. It’s a well-known fact that some regions have a stronger, more vibrant business community, like the Nordics (I’m totally unbiased, of course). It’s also been a standard discussion point for at least 120 years that religion may play an important role, whether it’s about fostering a particularly productive work ethic or spiritual encouragement of self-reliance.
This is not a topic that lends itself well to econometrics, or so it seemed for a long time. Now, with more and better data available, there’s a rising number of studies and fascinating angles. For instance, an Italian economist found that areas in France with higher religiosity in revolutionary times developed more slowly during the second industrial revolution, but not before. Apparently, religion hampered the appropriation and adoption of new technology.
And now, going further back … or maybe not: While many of you will associate the Spanish inquisition with medieval times, torture and Tomás de Torquemada (or perhaps Monty Python’s iconic sketch), it actually imprinted itself deeply on Spanish society for more than 350 years, operating across a large number of municipalities in Spain. Incidentally, this has provided a rich material for research.
In an article in the Proceedings of the National Academy of Sciences, the authors report having examined more than 67,500 trials conducted by the Spanish Inquisition from 1478 to 1834, combining this information with a host of other data. Let’s cut to the chase:
“In municipalities where the Spanish Inquisition persecuted more citizens, incomes are lower, trust is lower, and education is markedly lower than in other comparable towns and cities.”
Magnitudes are large, they conclude: “Our estimates imply that had Spain not suffered from the Inquisition, its annual national production today would be 4.1% higher” (a reference to GDP per capita). The estimated difference within municipalities at each end is about twice this figure. And this is not a consequence of different religions; it’s just about the different religious practices within one and the same religion.
The article on the Spanish Inquisition is but one example of a growing number of studies on religion and economic growth. A logical taxonomy of possible links can be found in this recent VoxEU article. In a separate article, two of the authors also question German sociologist Max Weber’s postulate from 1905 that the Protestant work ethic fostered growth. In their view, prosperity in Protestant areas was instead due to higher literacy, as Protestants were encouraged to read the Bible themselves. Cue Protestant, then, though not a particular work ethic.
In the now largely secular Nordic countries, incomes are among the highest in the world, as are financial returns over the past 50 years. Let’s pray it stays that way.
On second thought, let’s just work hard instead.
