The Economics of Religion

The Economics of Religion. Edited by Robert M. Sauer, 2023. Hackensack, NJ: World Scientific Publishing. ISBN 978-981-12-7313-1. $128.00 (Hardback).

In his 2009 plenary address to the 25th Anniversary Conference of the Association of Christian Economists, Laurence Iannaccone defined the economics of religion as the application of economic methods to the study of religious beliefs, practices, and institutions (Iannaccone, 2010). This loose definition is useful given the varied ways the terms “economics” and “religion” are used colloquially and academically. The term economics, for example, may be used to discuss topics related to economic activity or organization. It also can be used to describe the discipline of economics with its distinct methods and approach. The term “religion” encompasses metaphysical experience, moral systems, and social ethics. It also includes beliefs and practice.

This volume contains chapters that fit within the purview of “economics of religion” as defined above as well as pieces that may be more properly considered “religious thinking about economics” or “religious thinking about economic topics.” For the readers of Faith & Economics though, all the chapters in the present volume will no doubt be of interest; some because of their advancement or survey of important lines of research in the economics of religion, others because of their potential for generating new research ideas.

Chapter Summaries

In Chapter 1, Cultural Transmission and Religion, Alberto Bisin, Jean-Paul Carvalho, and Thierry Verdier review the theoretical literature on cultural transmission and its applications to the diffusion of religious traits. Based on population dynamic models that borrow from evolutionary biology, economic models of cultural transmission treat religious belief and practice as traits that are passed on through parents and others bearing the trait in the population. This contrasts with other theoretical models of religious behavior that focus on religious human capital as a basic building block (Iannaccone, 1998; McBride, 2015). The focus on population dynamics allows for modeling of the spread, growth, and evolution of religious belief and practice. The authors demonstrate this flexibility by first expanding the model to incorporate religious syncretism and next by including a centralized religious authority. This chapter is a valuable read for anyone interested in modeling population level religiosity, or any cultural trait, intertemporally.

Chapter 2, by Jeanette Sinding Bentzen and geologist Eric R. Force, asks whether the frequency of earthquakes influenced the rise of major world religions. First, the authors review a small literature covering the relationship between religiosity and natural disasters. They suggest that the positive relationship found between natural disasters and religious belief is due to religious coping: making sense of traumatic events through supernatural belief and devotion.

The authors provide evidence that the largest religions were all founded near major fault lines and conjecture that the positive relationship between disaster and religiosity could account for global patterns in the emergence of complex religions. Ultimately, the authors do not provide enough support for this conjecture to be convincing. Astute observers, for example, will note that complex societies also originated near fault lines and often predate major religions. This phenomenon also needs an explanation of course, which the authors to their credit acknowledge. However, it would have been useful to see a comparison between religions developed in complex societies near fault lines and those developed further away from fault lines.

The authors’ claim that natural disasters cause increases in religiosity is better argued and better supported by evidence than the argument that earthquakes were a cause for the development of major world religions. Nonetheless, these hypotheses present promising areas for future research. Assuming the proposed mechanism of religious coping is correct, which traditions are best suited for helping individuals and communities deal with natural disasters? What implications does this have for increased occurrences of natural disasters that have been projected from climate models?

Chapter 3, Evaluating the Long-Term Development Impact of Christian Missions by Valeria Rueda surveys recent literature discussing the long-term development effects of Christian missionary efforts. Rueda’s review first focuses on two arenas related to development: health and education outcomes. It then addresses other elements of cultural legacy: liberal democracy, media and publishing, as well as gender and sexual norms. The general finding in the literature is that Christian missions tend to improve education, literacy, and health in the long run. However, Rueda notes that recent work has revealed that missionaries did not choose their locations at random; instead, they often centered their activities in locations with a lower prevalence of malaria and near railroads (Jedwab et al., 2022).

Rueda also argues that the research in this area is more focused on the beneficial effects of development at the expense of investigating potential deleterious impacts. This is a valid critique, though readers of Faith & Economics may find areas of disagreement with Rueda as to what constitutes a deleterious impact. As an example of what Rueda terms “insidious consequences of what was, after all, a movement of cultural imperialism,” traditional Christian sexual ethics are more likely commonly held or enshrined in law in locations with a historic mission presence. This can have quantifiable health effects—abstinence-only sexual education possibly resulted in higher rates of HIV infection in locations surrounding Christian mission settlements. Others impacts, such as decreases in rates of polygamous marriages, inherently involve normative questions about family structure and sexual ethics.

Maleke Fourati, Gabriele Gratton, and Frederico Masera provide a summary of the political economy literature on the interplay between religious social services and the public welfare state in Chapter 4. The models surveyed in this chapter have particular relevance to democratic states in the Muslim world, where religious parties are an important part of the humanitarian and political landscape. In their review, they highlight the conditions for religious parties to gain influence within democratic regimes compared to those necessary for religious parties to gain enough popular support to replace state functions. Most interestingly, the authors use findings from this literature to suggest that the evolution of the welfare state negatively impacts individual religiosity in the long run. While the negative relationship between national social service outlays and individual religiosity has been documented, the authors provide new insight into the dynamic political economy of this relationship.

Chapter 5 is a short piece by Barry R. Chiswick that highlights the remarkable economic success of Jews in America, focusing on the occupational mobility of Jews relative to non-Jews, using census data. Various explanations for this are discussed briefly: the cultural prominence of study and learning as a way to interact with sacred texts, centuries of anti-Semitism refining Jewish ability to recognize market niches, and even selection into and out of Judaism stemming from the high cost of handing down Jewish tradition. This piece does not attempt to evaluate any of these potential explanations, and therefore provides a nice starting point for future work in this area.

In Chapter 6, Carmel U. Chiswick briefly compares the religious market structure of Judaism in the United States and Israel. Judaism in Israel is characterized by essentially a religious monopoly with competitive pressure, while the US has a competitive religious marketplace. This piece offers an interesting discussion, and some may recognize similarities between Christian institutions in the US and Europe.

Chapter 7 discusses a case study in which Yael Goldfarb and Shoshana Neuman explore the motivations behind the occupational choices of ultra-orthodox (Haredi) Jewish women participating in an occupational training program in Israel. The authors then make policy recommendations aimed at increasing labor market attachment among Haredi women, primarily through career counseling that takes motivations into account. The focus on impacts of religious belief on motivations for labor market participation is likely a fruitful topic for research. However, the authors’ analysis only compares work motivation between Haredi women who choose different occupational training tracks. In order to discuss the influence of the beliefs particular to Haredi women on motivations, a more appropriate approach would have been to compare differences between Haredi women and non-Haredi women.

In Chapter 8, John Wilson discusses the state of empirical social science investigation of the relationship between religious involvement and volunteering. Religion is strongly correlated with volunteering, a finding that remains pronounced when accounting for age, race, ethnicity, and gender. A leading explanation suggests that religious involvement connects individuals to social networks where volunteer opportunities are discovered, and participation is expected. 

This survey reveals that causally identified work in this area is rare but needed. One may worry that if the trend in the United States of disaffiliation from organized religion continues, the positive correlation between religion and volunteering may spell drastic reductions in volunteering in coming decades. Work uncovering the causal mechanism between religion and volunteering is necessary to understand potentially major changes coming to Western culture.

In Chapter 9, Jonathan Jacobs discusses the ways that Judaism is amenable to liberal democracy and to markets as an organizing economic principle. The Jewish ethics of charity, individual agency, and inherent human worth create a strong foundation for the kind of robust civil society compatible with moral expressions of a market economy. Jacobs also argues that liberal constitutional democracy is well suited to allow Jews to contribute to society and politics.

Chapter 10 is a fascinating history of Anglo–Catholic economic thinking after the Reformation, by A. M. C. Waterman. Especially insightful is a discussion of the ideological alignment of Anglican clergy and the emerging political economists in the aftermath of the French Revolution. This resulted in an economic doctrine that preserved the social and religious status quo while still incorporating insights from “liberal” political economy. The reaction to this alignment resulted in a stream of socialist thought within the Church of England, which in turn led to a moderating stance in Bishop William Temple’s seminal 1942 Christianity and Social Order (Temple, 1942).

Zev Golan argues in Chapter 11 that attempts to characterize twentieth-century Zionism as socialist are incomplete. To do so, Golan profiles several prominent Zionists and highlights their acceptance of market economies, entrepreneurship, and willingness to finance the settlement of Eretz Israel through equity-based investments.

Robert M. Sauer concludes the volume with a piece on the voting tendencies of American Jews. Jews in America support economically progressive positions in the US, not conforming to the typical pattern that net worth correlates with more conservative political preferences. Sauer suggests that this idiosyncrasy is not the necessary result of Jewish social teaching on economics. He sketches a concise set of moral principles related to economics that flow from Judaism’s ethical and theological teachings. This set of principles is more consistent with economic liberalism than with the policy agenda of the American political left, highlighting the puzzle of Jewish political affiliation. While Sauer leaves the solving of the puzzle to future researchers, he suggests that the political alignment has roots in the Age of Enlightenment, when the secular left provided Jews the a political home that was unavailable to them among the religious (Christian) right.

Conclusion

Using the definition from the introduction, the subfield known as the economics of religion is best defined by the application of economic methods to the study of religious beliefs, practices, and institutions. The volume under review, despite its title, The Economics of Religion, is more of a sampling of research on topics related to economics and religion. The collection presents insightful chapters that nonetheless lack a clear organizing theme, many of which would have benefited from robust economic theory or more convincing causal methods. That said, the several pieces on the relationship between Jewish social teaching and economic thinking will provide helpful context for researchers interested in the Jewish political economy. The review articles by Bentzen and Force, Rueda, and Fourati et. al. neatly summarize some active areas of research in the economics of religion, while Bisin et al. and Waterman are themselves worth the price of admission. Readers seeking a primer on the economics of religion should look elsewhere,^[1] [D1] but Sauer’s volume offers several worthwhile contributions to students of the subfield.

Notes

[1] This growing economic subfield is surveyed in a small collection of review literature (Carvalho et al., 2019; Iannaccone, 1998; Iyer, 2016;  McCleary, 2011).

References

Carvalho, Jean-Paul, Iyer, S. and Rubin, J. (Eds). (2019). Advances in the Economics of Religion. International Economic Association Series. New York, NY: Springer.

Iannaccone, Laurence R. (1998). Introduction to the Economics of Religion. Journal of Economic Literature 36 (3): 1465–1495.

_____________________. (2010). The Economics of Religion: Invest Now, Repent Later? Faith & Economics 55 (1): 1–10.

Iyer, Sriya. (2016). The New Economics of Religion. Journal of Economic Literature 54 (2): 395–441.

Jedwab, Remi, Meier Zu Selhausen, F. and Moradi, A. 2022. The Economics of Missionary Expansion: Evidence from Africa and Implications for Development. Journal of Economic Growth 27 (2): 149–192.

McBride, Michael. (2015). Why Churches Need Free-Riders: Religious Capital Formation and Religious Group Survival. Journal of Behavioral and Experimental Economics 58 (C): 77–87.

McCleary, Rachel M. (Ed.) (2011). The Oxford Handbook of the Economics of Religion. Oxford: Oxford University Press.

Temple, William. (1942). Christianity and Social Order. London: Penguin.