The Role of Supernatural Punishment in the Creation of Economic Societies

Abstract:     
This paper studies an anarchic society with a production technology where the allocation of goods is governed by strength. The anarchic society is inefficient as no widespread adoption of the production technology occurs due to its lack of property rights. Property rights are shown not to be enforceable through an ex-post punishment mechanism that requires punishers to be stronger. Property rights can be enforced on the other hand through a supernatural punishment mechanism if it is sufficiently credible. On the margin, for minimal religious beliefs that achieve enforceable property rights, agents with lower beliefs have higher consumption rights. This paper makes a new point regarding the crucial role that religious systems with a doctrine of salvation and damnation can play in the transition from anarchic societies to those with enforceable property rights that enable production and subsequent economic development.

Number of Pages in PDF File: 23

Keywords: Property Rights, Anarchy, Supernatural Punishment, Religion, State of Nature

working papers series