Religious faiths, particularly Protestantism, Catholicism, Asian Ethnoreligion, and Hinduism, have a positive effect on a nation’s respect for the rule of law and level of corruption, according to a Baylor University research paper.
The paper, “Religion, Corruption, and the Rule of Law,” compares predominant world religions and discusses what role the faiths play in shaping a nation’s economic and social outcomes. It was originally published in July.
Charles North, associate professor of economics at Baylor and coauthor of the paper, concluded that religions, especially faiths with a strong conception of morality, produce a society that is more lawful and less corrupt.
Corruption levels and respect for the rule of law are critical issues “because they help determine whether a government will stagnate or grow,” North said during a recent lecture at Campbell University’s Lundy-Fetterman School of Business. He added that countries “are more productive and have a higher level of economic development if they abide by the rule of law and take care of public corruption.”
Respect for the rule of law creates better societal institutions, which in turn mitigate macroeconomic shocks, North said. A well-functioning economy also “requires clearly defined property rights” so that legitimate bargaining can occur.
The rule of law also helps economies grow by fostering impersonal exchange, he said. In order to grow, an economy must allow its agents to engage in specialization and then grant the freedom to trade in order to gain the benefits that are the hallmark of developed countries, North said. Establishing respect for the rule of law will also help alleviate poverty in developing nations, he said.
North explained the role religion plays in fostering economic vitality, concluding “that religion is statistically correlated to economic growth.” He referenced Max Weber’s seminal work on the connection between religion and the economy, entitled The Protestant Ethic and the Spirit of Capitalism, which concluded that the Protestant work ethic was central to the conception of the spirit of capitalism.
But North argued that Weber’s premise has been refuted theologically and empirically in recent years. “Many early Protestants were strongly anti-greed in their teachings,” he said. “They did not teach that you could be saved through wealth.” Additionally, North pointed out that many capitalistic institutions were already in place when the Protestant Reformation jumped onto the world stage in 1517.
At the same time, North referred to contemporary research that has found a causal relationship between economic success and religion. For example, a research paper published by Harvard University in 2003 and authored by Robert Barro and Rachel McCleary found that economic growth is augmented by strong religious belief, especially in heaven and hell. Another study published by Rodney Stark in the Journal for Scientific Study of Religion concluded that only religions with a strong conception of God or the gods — such as Protestantism, Catholicism, or Hinduism — are able to sustain a moral order, which in turn fosters economic stability.
In addition to tracing the relationship between religion and economic and social strength, North’s study compares changes in the most predominant world religions over a 100-year period. From 1900 to 2000, there was a 2.9 and 8.7 percent increase in the number of majority Protestant and Catholic countries, respectively, while Islam saw a boost of 3.9 percent.
North concluded that a nation’s religious heritage matters in creating positive economic and social results, but that the positive effect is visible over the course of centuries rather than decades.
“There is a direct affect on behavior,” North said. “Religious people comply with the law and moral codes. But there are other indirect effects, such as greater demand for moral enforcement by the government and cheaper law enforcement. A majority of those who subscribe to a morally strong religion will demand that the government reflect that.”
David N. Bass is an editorial intern of Carolina Journal.