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Religious Institutions and the Creation of Economic Societies

42 Pages Posted: 11 Oct 2010 Last revised: 27 Jul 2013

Manuel Mueller-Frank

University of Navarra, IESE Business School

Date Written: July 20, 2013

Abstract

This paper studies an anarchic society with a production technology where the allocation of goods is governed by strength. I establish the following results. First, the anarchic society is inefficient as no widespread adoption of the production technology occurs. Second, wide-scale production, and thus efficiency, is generally not achievable through a punishment mechanism that requires punishers to be stronger than the to be punished. Third, efficiency can be enforced on the other hand through a religious system with a supernatural punishment mechanism if it is sufficiently credible. This paper makes a new point regarding the crucial role that religious institutions with a doctrine of salvation and damnation could play in the transition from anarchic societies to those with enforceable property rights that enable production and subsequent economic development.

Keywords: Property Rights, Anarchy, Supernatural Punishment, Religion, Religious Beliefs, Institutions, Neolithic Revolution, Partition Function Form Games, Dynamci Equilibrium

Suggested Citation

Mueller-Frank, Manuel, Religious Institutions and the Creation of Economic Societies (July 20, 2013). Available at SSRN: https://ssrn.com/abstract=1684638 or http://dx.doi.org/10.2139/ssrn.1684638

Manuel Mueller-Frank (Contact Author)

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

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