Devilish Incentives

“Religion and Economic Growth Across Countries” by Robert J. Barro and Rachel M. McCleary, in American Sociological Review (Oct. 2003), 1307 New York Ave. N.W., Ste. 700, Washington, D.C. 20005–4701.

The “Protestant ethic” may have spurred the rise of capitalism, as sociologist Max Weber argued more than 70 years ago, but what about religion’s role in keeping economies growing? Apparently, it’s helpful to be a God-fearing country, but not so God-fearing that people attend religious services on a regular basis. Think Scandinavia.

Countries with large numbers of religious believers—no matter what their faith—tend to prosper more than others. But if those believers are regular participants in services, economic growth is retarded, according to Barro, an economist at Harvard University, and McCleary, director of Harvard’s Religion, Political Econ­omy, and Society Project. They analyzed data on 41 countries around the world from the 1980s and 1990s.

What’s wrong with a country’s citizens’ regularly attending religious services? Not only does it take time and attention away from earthly concerns, the authors speculate, but when a lot of people attend, it may be a sign that organized religion in that country strongly influences “laws and regulations that affect economic incentives,” such as those governing credit and insurance markets.

But just having a lot of citizens who profess a belief in God while still heading off to work on holy days doesn’t light a country’s economic fire. It’s a belief in an afterlife that matters most. Barro and McCleary think that’s what encourages the capitalist virtues, such as honesty, thrift, and a strong work ethic. But not just any afterlife, they note: “There is some indication that the fear of hell is more potent for economic growth than is the prospect of heaven.”