What role does religion play in whether countries are rich or poor? That was the question addressed by the Rockwool Foundation Berlin, which conducts research into economics and global challenges to inform public debate and policymaking.
In an article titled Religion and Economic Growth: What We Know and Why It Matters, economists Sascha O. Becker, Jared Rubin and Ludger Woessmann note that factors such as natural resources, investment, education and technology help determine a country’s wealth.
But what is often overlooked by economists, they say, is the role of religion.
“This neglect is puzzling,” they write. “Religious teachings influence whether people save or spend, how many children they have, whether they invest in education, and whether they embrace or resist new technologies.”
Religion also shapes financial systems and legal frameworks, they add, noting that while religious conflicts can devastate economies, religious tolerance can spur innovation.
Understanding the role religion plays economically “helps explain why some countries are rich and others remain poor, and reveals how cultural and religious factors interact with economic policies to drive growth,” they state.
It can also inform contemporary policymaking. “Policies that ignore religious considerations may fail or backfire,” they write.
‘Shot through’
Western societies are secular today, but religious norms from the past still persist.
“Even after beliefs change, their influence can remain visible in financial systems, schools, family patterns and innovation,” the authors say. “These long-lasting effects help explain why historical religious differences still shape economic inequality today.”
The article’s findings apply to Canada, says Brian Dijkema, president of Cardus, a Christian think tank based in Canada.
“There is no doubt that Canada’s institutions are shot through with religion,” he said.
“[A]nybody who looks at the history of our country and its economic development, sees that the factors that show up in this article [are present here],” he added.
A prime example for him is the commonplace practice of making contracts.
“We expect people to keep their word when entering into a contract,” he said, noting this is based on the injunction against lying from the Ten Commandments.
“We don’t think of it as religious anymore, but that’s because it’s like we’re goldfish in the water, it’s just everyday life now.”
Religion also shows up in what some call the Protestant work ethic — informed by the idea that God expects people to work hard and practice austerity.
“The ethos that values hard work and austerity and frugality, that helps push economic development,” Dijkema said, adding value this has become part of Canadian culture — and not just for Christians.
“The Sikh culture is highly entrepreneurial, and that comes from their religion,” he said.
Religious liberty also has economic implications. “It’s a clear limitation on the role of the state and its ability to interfere and meddle in people’s affairs,” Dijkema said.
“This leads to the freedom of a competition of ideas, the marketplace of ideas,” he stated. “Liberty in one place, for religion, is replicated into liberty of others … the greatest economic engines of the world today tend to be places where you have the highest degree of religious liberty.”
While acknowledging the contributions of other religions to Canada, Dijkema says Christianity is foundational in Canada.
“There’s a Christian ethos that still undergirds our country, despite the fact that Christianity is no longer the dominant cultural force,” he said. “It shaped the institutions which allow us to be so economically successful today.”
Dijkema acknowledged that religion has not always been a positive force in Canada. It has, for example, been used to justify harming the environment — grounded in the Biblical idea that God wants people to dominate and subdue the earth.
“There’s certainly been plenty of occasions where we’ve neglected the sacredness of the material world,” he said.
But overall, Dijkema sees religion as a positive force underlying “so many unstated assumptions we don’t see because we’re swimming in them.”
