Economic Freedom and Religion: An Empirical Investigation

35 Pages Posted: 25 Aug 2016

See all articles by Arye L. Hillman

Arye L. Hillman

Bar-Ilan University - Department of Economics; Centre for Economic Policy Research (CEPR)

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: July 2016

Abstract

There has been much study of the consequences of economic freedom but, outside of the role of political institutions, there has been little study of the determinants of economic freedom. We investigate whether religion affects economic freedom. Our cross-sectional dataset includes 137 countries averaged over the period 2001-2010. Simple correlations show that Protestantism is associated with economic freedom, Islam is not, with Catholicism in between. The Protestant ethic requires economic freedom. Our empirical estimates, which include religiosity, political institutions, and other explanatory variables, confirm that Protestantism is most conducive to economic freedom.

Keywords: economic freedom, protestant ethic, religion, religiosity, Catholicism, Islam, democracy, autocracy

JEL Classification: D630, I390, J160, O110, Z120

Suggested Citation

Hillman, Arye L. and Potrafke, Niklas, Economic Freedom and Religion: An Empirical Investigation (July 2016). CESifo Working Paper Series No. 6017. Available at SSRN: https://ssrn.com/abstract=2829299

Arye L. Hillman

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+97 29 774 6424 (Phone)
+97 29 771 5628 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Niklas Potrafke (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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