Religion-related developments deeply influence Indian politics. Can religion be a determining factor in growth? It can work both ways—diverting resources of the state to unproductive areas or cultivating a culture of honesty and perseverance. Mint explores the relationship.

Is religion a variable in economic growth?

Economic development involves patterns of change in various variables. Explanations for growth, it is argued, must be broadened to include cultural determinants. Culture influences economic outcomes by affecting personal traits such as honesty, willingness to work hard, and openness to strangers. In a 2003 paper, Harvard economics professor Robert J. Barro and his colleague, Rachel McCleary, showed how church attendance and religious beliefs can affect growth positively and negatively. They used international survey data between 1981 and 1999 on religiosity for 41 countries, including India.

How does religiosity affect growth?

The researchers found that for given religious beliefs, increases in church attendance reduce economic growth. This is because it reflects greater diversion of resources to the religion sector, leaving less for allocation for other purposes. The growth reduction is tempered by the extent to which church attendance leads to greater religious beliefs which encourage economic growth. The net effect on growth depends on the resources diverted to the religion sector, the social-capital aspect, and the influence of organized religion on laws and regulations that affect economic behaviour.

Putting faith in God
Putting faith in God

What is the direction of the causation?

The estimates of the researchers reflected causal influences from religion to economic growth, and not vice versa. They found regions having firm belief in heaven and hell, measured relative to the time spent in religious activities, tend to be more productive and experience faster growth. Using a measure of belief in God produced much weaker results.

What happens if there is a state religion?

The paper finds that the presence of a state religion is positively related to religiosity. Subsidies to the established religions represent diversion of economic resources. The opposite of subsidy is suppression of religion. The paper concludes religiosity is negatively linked with government regulation of the religion market, and with religious oppression. Oppression lowers church attendance and religious beliefs. The determinants of religiosity assume that demand and supply forces together affect religious participation and beliefs.

Is growth affected by religious plurality?

Greater diversity of religions is linked with higher attendance at a religious place and stronger religious beliefs. The extent of religious diversity and competition depends on how state regulates religion. A state church, as was the case in Sacndinavia, can be a source of low degree of pluralism. Greater diversity of religions promotes competition, leading to better quality religion product and greater participation.

Puja Mehra is a Delhi-based journalist.

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