Does religion impact economic growth? A study across countries and time.

Abstract: Since the inception of Hinduism some 3500-4300 years ago, religion has been at the forefront of human, cultural, and social development, but how influential has it been on economic growth during the past century? This study examines this intriguing question to find whether or not religion is as prominent in the prosperity and development of modern economies as it once was. Seven carefully selected economic control variables in addition to 3 dummies for religion, natural resources, and freedom, were used in 8 separate regressions spanning over 69 years and 95 countries. On a micro-level, religion could be argued to have a significant role in behavior and values, leading to more or less favorable economic outcomes. However, on a macro-level, previous studies have not been able to find consensus on the matter; some studies imply that religion is significant, others not. We hypothesize that the studies finding religious significance could have found time-specific ones which instead could– and should be explained by macro– political– and socioeconomic variables. The results found in this study suggest that this hypothesis reflects economic growth from a more macroeconomic perspective than its predecessors.