Religion, Corruption, and the Rule of Law

Abstract

Existing research has found that economic growth is higher in countries where (1) certain religious beliefs are stronger and (2) the rule of law is stronger and corruption is lower. This paper examines whether religion is correlated with the rule of law and the level of corruption, thereby providing a partial explanation of the correlation between religion and economic growth. We find that the strength of the rule of law and the level of corruption are both associated with a country’s religious heritage, as measured by the country’s largest religious group in 1900. In addition, we find that our results sometimes differ when we control for variables where we lack data for all countries in the sample, but that these differences are attributable to changes in sample composition rather than inclusion of the control variables. Our results suggest that researchers should take great care to distinguish between the effects of adding a control variable and the resulting sample composition effects when doing cross-country analysis.

JEL Classification: Z12, N10, O4