economics and religion
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Economics and religion. Religion and Economy (Mc Cleary and Barrow) . Religion interacts with economic activity is can be views as both Dependent variable And Independent variable. Religion as dependent variable Secularization model Extreme view: religious beliefs reflect fear:. - PowerPoint PPT PresentationTRANSCRIPT
Economics and religion
Religion and Economy (Mc Cleary and Barrow)
Religion interacts with economic activity is can be views as both Dependent variable And Independent variable.
Religion as dependent variable Secularization model Extreme view: religious beliefs reflect fear:
והיה, אם שמוע תשמעו אל-מצוותיי, אשר אנוכי מצווה אתכם, היום לאהבה את יגונתתי מטר-ארצכם בעיתו, יד. ה' אלוהיכם, ולעובדו, בכל לבבכם, ובכל-נפשכם
ונתתי עשב בשדך, לבהמתך; טו. יורה ומלקוש; ואספת דגנך, ותירושך ויצהרךהישמרו לכם, פן יפתה לבבכם; וסרתם, ועבדתם אלוהים טז. ואכלת, ושבעת
וחרה אף ה' בכם, ועצר את-השמיים ולא-יהיה מטר, יז. אחרים, והשתחוויתם, להםוהאדמה, לא תיתן את-יבולה; ואבדתם מהרה, מעל הארץ הטובה, אשר ה', נותן
. לכםדברים י"א: י"ג-י"ז.
Climate Fluctuations and Witch Hunt in Geneva (1520-1770)
Religion as dependent variable
Rational maximization models (Azzi and Ehrenberg, 1975) Material utility in current world, unearthly utility in
the next world / salvation. Practicing religion is a time intensive. Wage
increase reduces practicing. Time discount: older people will spend more time
on practicing because the next world is looming.
Religion as a dependent variable Religion Market Model: Finke and Stark (1992)
Focus on supply of religious services. State religion lead to monopoly that supplies low
quality and high price services. No formal state religion leads to competition in this
market and opens the door for religious entrepreneurs.
The contest between the US and Europe. High religious participation rate in the US and activity “fits
the market.” Where does ME stand in this model?
Orthodox vs. Sufi approaches.
Negative association with GDP.
Positive association with state religion.
Pluralism related to participation in ceremonies but not with personal belief.
Muslims tend to believe in hell and afterlife
Religion as an Independent variable
Some religions induce work ethics / literacy Weber (1905): the protestant Ethics. Becker and Woessmann (2007). Was Weber
Wrong? A Human Capital Theory of Protestant Economic History
Botticini and Eckstein (2005). Judaism stresses learning of holy scripts, and thus gave Jews competitive advantage in urban trades, and induced them to abandon agriculture.
Religion as an Independent variable Social capital perspective
Networking during regular religious activities provide information.
enforcement mechanisms such as excommunication Affects the behavior / utility of the believers
Social services – e.g charity (zakat) one of the Islam. According to some views a Muslim must
contribute 2.5% of his wealth every year. Charity is particularly important in volatile economies e.g.
Rural economies that depend on climate. So becoming a member in a “club” with insurance could the a rational choice not the result of fear and ignorance.
Religion as an Independent variable Belief in hell
is positively associated with growth.
Attendance negatively associated with growth.
Fits Weber and not the networking approach
In col. 3 Islam has no impact, adverse impact only when controlling for religious vars.
End of Introduction
To what extent these models relevant for Islam? Islam, like Judaism, are based not only on
beliefs and practicing. They provide a framework that govern many
aspects of human activity. Christianity was established under Roman Empire' Islam as a state and religion at the same time. No
separation between “state” and “church”. They also include laws that govern economic
activities.
Why is the ME Economically UnderdevelopedTimur Kuran
Main argument Around 1000 AD the Middle East was a developed
region. Yet, it failed to undergo the institutional development
that Europe did. At 1800 AD Islamic commercial institutions were similar to those eight centuries earlier.
This paper points on institutions that hindered economic development, including:
Islamic law of inheritance. Lack of corporations in sharia. The waqf (pious foundation).
Initially these institutions were not obstacles for economic development. Later on, these institutions had an adverse role.
Background: Path Dependence Past decisions affect the trajectory of the
economy and create a lock-in situation. Lock-in situations occur when
there is a large fixed cost and increasing returns to scale /positive externalities, which make a switch to more efficient trajectory un-profitable.
Some pressure groups block efficient changes because of their private interests.
Common dimension of path-dependency: Technology. Institutions.
Technological Path Dependence
Communication signals (cellular etc.) Mac vs. PC Typing technology: the keyboard (QWERTY)
Fitted the old typing machines. Not efficient for computer typing Switching costs are large because people are used
to the previous system.
Institutional Path Dependence
Institutions are rules / equilibria. Switching rules / equilibria
should be coordinated. Likely to be costly. May harm some players.
Therefore, some economies may be locked-in an inefficient equilibrium.
Institutional Features of the Islamic ME
Egalitarian inheritance system. No long living corporations. Partnerships
were practically limited in scope and to a single mission.
No banks, only dubiously legal money lending between individuals.
Weak property rights and arbitrary taxation.
Provision of public goods by funds privately endowed for eternity to Waqfs.
Legal Pluralism, and minorities' ability to choose legal system.
Difficult to pool resources for large scale long term enterprises
Weak incentives
Inflexibility of supplied PG
Advantage of minorities
Comparison to the “West” Unequal inheritance laws facilitated accumulation of
lands and capital. The Catholic Church and Christian orders, cities,
universities were incorporated from the High Middle Ages onwards.
Provisioned secular and religious public goods. Starting from the 16th century commercial corporations
were based in this legal concept but opt to make profits.
Long Political struggle for limiting ruller's ability to abuse property rights (e.g. The glorious revolution, 1688)