Religion, Corruption, and the Rule of Law

36 Pages Posted: 24 Jan 2013  

Charles M. North

Baylor University Department of Economics

Wafa Hakim Orman

University of Alabama in Huntsville - College of Business Administration

Carl R. Gwin

Pepperdine University

Date Written: June 22, 2012

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

Suggested Citation

North, Charles M. and Orman, Wafa Hakim and Gwin, Carl R., Religion, Corruption, and the Rule of Law (June 22, 2012). Available at SSRN: https://ssrn.com/abstract=2205971 or http://dx.doi.org/10.2139/ssrn.2205971

Charles M. North (Contact Author)

Baylor University Department of Economics ( email )

One Bear Place # 98003
Waco, TX 76798-8003
United States

Wafa Hakim Orman

University of Alabama in Huntsville - College of Business Administration ( email )

United States

Carl R. Gwin

Pepperdine University ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States
310-506-7352 (Phone)

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