The polymath Max Weber wrote about how religion aided the development of capitalism and highlighted some advantages that followed from this. Among these were increased entrepreneurial activities of the masses, increased savings, and greater literacy. His essay, The Protestant Ethic and the Spirit of Capitalism, provides a foundation for assessing the links between religion and development, with a particular focus on the role of the Christian Protestant faith. Historical evidence and recent research findings provide further insight into this interaction.
Protestantism & Capitalism
The Protestant notion of a 'worldly calling' allowed Protestant Christians to pursue economic activity as a means of sustenance and also as a way of practising piety in their daily life. This was was an apparent deviation from the Catholic focus on monastic life and asceticism, and seems to have given Protestants a slight economic advantage. As this paper points out, from the start of the eighteenth century to the mid-part of the twentieth century, Protestant regions in Europe had higher income levels than Catholic ones. And the difference seems to have persisted beyond then. Further research found that Catholic countries and former Catholic colonies were on average economically worse off than their Protestant counterparts.
Currently a key indicator of development, education was another advantage that accrued to protestant regions, aside from higher incomes. Protestantism encouraged reading so that people could understand the Holy Scriptures for themselves. This move provided an opportunity for people, at least those interested, to increase their knowledge base by reading outside holy scriptures. Perhaps the process of learning [to read] wasn't as organised as it is today, what we do know is that till this day an educated/learned workforce is essential for the development of any society.
Suited for Development
The historical evidence suggests that religion, through beliefs, and often through laws and ethics, can spur economic development. However, some of this research is questionable – one paper collected data from as far back as the year 1500. Moreover, contrary evidence exists. For example, Protestants, who constitute the largest religious group in the U.S., have been found to be poorer than other groups, and even poorer than Catholics.
But are some religions more suitable for economic development? Under the prevailing capitalist system, the answer may be yes. Looking at Islam and Christianity, the two most popular religions in Nigeria, Christianity has been a better fit for the current economic system. There is no simple answer as to why this is, but even within Nigeria, there are glaring disparities between the largely Muslim North and Christian South, even after accounting for natural resource endowments. For instance, the youth literacy rate in the South is higher than in the North.
We know that Islamic states (from Egypt to Iraq and the Arabian Gulf) have previously thrived as commercial centres serving both Eastern and Western hemispheres. According to this author, accumulation, through trade, hastened economic progress in these regions. Even a variant of interest-based lending (what he refers to as financial capitalism) was an ongoing practice in Mecca. These states were financially buoyant and bustling with commercial activity; however, such is currently not the case. How have they fallen behind? Author and scholar Timur Kuran, argues that growth and development in Islamic states lagged because Islamic institutions became a hindrance to the development of features that allowed for growth within the new Western-shaped economic landscape. Kuran cites the Sharia laws on partnerships, inheritance, interests, and welfare foundations (waqf) as some of the factors that have stalled development in Islamic states.
As convincing as Kuran is at times, one cannot ignore the success of Indonesia, currently the largest Muslim nation in the world. The country has the largest economy in South East Asia and the 10th largest in the world in purchasing power parity terms. Indonesia clearly defies the notion that Muslim societies are less suited to economic development at this time. An exploration of how it has done so would undoubtedly shed more light on the dynamic relationship between religion and economic development.
No Obvious Truth
So where does this leave religion and economic development? I think that data presented here and otherwise, provide interesting links between religion and economic development. These links are often not direct and as such can be grossly misinterpreted. Naturally, religious differences alone are unable to sufficiently explain why some economies thrive more than others. Other factors such as politics, natural resources, and institutions also affect national development. The extent to which religion plays a role will depend on which country is being analysed and the peculiarities that exist therein.
It is also interesting to observe the inverse – how economic development affects religion. It seems that the poorer a nation, the more religious its inhabitants are. This study compares what it calls a ‘religiosity index’ (the percentage of the population who self-describe as religious) with the national income of countries. The findings (pg. 14) show that countries that score high on religiosity index generally have lower national incomes, often less than $5000 per person. Does this mean that the more development a country experiences, the less religious it becomes? This set of findings suggests as much.
If you are familiar with a segment of Aljazeera’s Upfront called ‘Reality Check’ then you probably saw an episode that aired in 2016 where the presenter, Mehdi Hasan, claimed that religion wasn't going anywhere soon. Even in developing countries. Hasan cited a 2015 study by Pew Research Center which projected that Muslims would increase by 73% in the year 2050. The study also expected that Christians would increase, albeit at a slower pace than Islam, by 35%. Both religions are set to experience much of their growth in sub-Saharan Africa. If greater development does manifest in lower religiosity, then Nigeria may be caught in an unlikely dilemma: having to choose between earthly progress and the promise of a better life after death.