Transcript Paper Review on Religion and Economic Growth across Countries

Religion and Economic Growth
across Countries
Robert J. Barro and Rachel M. McCleary
Presented by
Erita Narhetali
and
Luke Emeka Okafor
Development Economics, Warsaw University
October 2007
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Outline
• INTRODUCTION
• THEORIES: ECONOMIC DEVELOPMENT
VERSUS RELIGION
• DATA
• CROSS COUNTRY FINDINGS
• EXTENSIONS: AUTHOR’S PERSPECTIVE
• APPRAISAL OF THE STUDY
• CONCLUSIONS
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INTRODUCTION
• Motivations of the study:
– previous studies neglect the influence of culture
– need for incorporation of social and political variables
then....
• They investigated the effects of church attendance
and religious beliefs on economic growth
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INTRODUCTION....(Cont’d)
The Instrumental Variables are:
-
the presence of state religion
regulation of the religion market
the composition of religious adherence
An indicator of religious pluralism
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THEORIES:
ECONOMIC DEVELOPMENT VERSUS RELIGION
• Secularization hypothesis
• Market or supply side forces hypothesis
– greater state regulation of religion may decrease
the efficiency of religion providers
– stimulates religious activities
– subsidy
suppression (opposite!!)
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DATA
• Data sources
– Penn World Tables
– World Development Indicators of the World Bank
– International data on education
• Others....
– World Values Survey (WVS),
– International Social Survey Programme (ISSP),
– Gallup Millennium Survey (GMS)
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CROSS COUNTRY FINDINGS
• The panel system estimations yields a set of
partial correlations between the measures of
religiosity and selected economic variables
• Applied the use of SUR approach in the
estimation
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Result...?!?
•  For given religous belief, increases in
church attendance tend to
growth
•  For given levels of church attendance,
belief in hell, heaven, and an afterlife tend
to growth
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Result...?!?
•  For given religous belief, increases in
church attendance tend to
growth
•  For given levels of church attendance,
belief in hell, heaven, and an afterlife tend
to growth
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EXTENSIONS OF THE STUDY:
Author’s Perspectives
• The relationship between religious beliefs and
individual behaviours or values
• The influence of church attendance on religious
beliefs
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Our Appraisal.....
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Problems on basic assumption
RELIGION
personal traits
i.e. honesty, ethics, openness to stranger
CULTURE
Economic outcomes!?!
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Problems on methodology
• UNCLEAR relationship between:
– Religiousity and Personal Traits; they are not
always correlated!
– Religious-driven Personal Traits and
productivity
• Previous work by Weber (1904) +++
• Some cases: Islam in Indonesia and CPI index --13
Problems on methodology...(cont’d)
• The notion of hell is not same for some world
religions
• Productive workforce is a product of many factors
–
–
–
–
–
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job security and satisfaction
wages and salaries
Education
Training
well-being
security, surveillance and binding contracts etc
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Problems on methodology...(cont’d)
• The religious variables DO NOT explain
human motivation in decision making
process, i.e.:
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Religious-driven consumption behaviour,
insurances,
banking system,
business network, etc
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Problems on Econometrics
• Sample selection bias (????)
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Problems on Econometrics...(cont’d)
• The exogeneity of the instrumental variables to
economic variables raises some doubts
–
–
–
–
subsidies
favourable tax policy
religious bodies do not pay tax in some countries
the difference between the state and the religious
authorities in some countries are unclear
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Some interesting stuffs to discuss...
FEAR OF HELL MIGHT FIRE UP THE
ECONOMY?
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A FAITHFUL WORLD, BELIEVE IT OR NOT
Gallup International Millennium Survey
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A FAITHFUL WORLD, BELIEVE IT OR NOT
(cont’d)
ATTEND RELIGIOUS SERVICES REGULARLY
(More than once a week+Once a week)
Gallup International Millennium Survey
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Some recommendations
• Examine the relationship between religious
values and decision making process, especially
in economic related activities!
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Conclusions
• Religion on average is a two-edged sword
– contributes towards moral sound society in some sense
– contributes towards economic backwardness if handled improperly
• Religious beliefs may influence individuals to behave
morally
• The link between religious beliefs and productive work
attitudes is uncertain and need further investigation.
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Thank you.....
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