Economic Development Needs Religious Freedom

In our increasingly religious world, religious freedom is important because it shapes the lives and sufferings of hundreds of millions of people. But increasing empirical evidence, including the recently released Heritage Foundation-Wall Street Journal Index of economic freedom, also suggests that it is an avenue to many other human benefits, including most notably, economic ones. Consequently, hard nosed politicians, economists and businesspeople need to take it more seriously.

Our current survey of a hundred countries and territories finds that religious freedom correlates strongly and significantly with Freedom House’s civil liberty index (.862) and political liberties index (.822), with Reporters Without Borders’ press freedom index (.804), with the longevity of democracy (.646), and the Heritage/WSJ scale of freedom from corruption (.608).

Some of the most striking relations are with economic wellbeing. The countries with the worst religious freedom records — Burma, China-Tibet, Eritrea, Iran, Iraq, the Maldives, North Korea, Saudi Arabia, Sudan, Turkmenistan, Uzbekistan usually have terrible economic records, though Saudi Arabia has oil. A similar relation holds at high levels of freedom, and for those in the middle.

This also holds for economic freedom. In statistical terms, our religious freedom scores have a correlation of .656 with the 2008 Economic Freedom Index. Also, the level of earned income for females, measured in purchasing power parity dollars, goes down as government restrictions on religious freedom go up (– .565), and the same is true for males, though to a slightly lesser degree (– .535). Economic wellbeing, as measured by human development indices, is also inversely related to such restrictions, as is having fewer physicians (– .251), higher infant mortality (.437), and a higher percentage of underweight children (.293). Brian Grim, of the Pew Forum on Religion and Public Life, who did these calculations, found more than one hundred statistically significant relations.

These measures are, of course, merely correlations and do not establish that one causes the other. However, the scores reflect more than the intuitively plausible idea that different freedoms often go together: there are good indications that religious freedom contributes to good economic outcomes.

In a recent American Sociological Review article, Grim, together with Roger Finke, conclude that their data show that “while governments typically view religious regulation as a necessity to maintain order and reduce potential violence, the irony is that more regulation leads to increased persecution, which means less order and more violence.” Since disorder and violence are known to be bad for economic growth and wellbeing, then religious repression is also.

Economists Robert Barro and Rachel McCleary, have examined relations between religious beliefs and attitudes to cooperation, government, working women, legal rules, thriftiness, and the market economy, and found that many religious beliefs are closely associated with good economic attitudes, where ‘good’ is defined as conducive to higher per capita income and growth. They also find that religion has a demonstrable effect on economic development by fostering religious beliefs that influence thrift, a work ethic, honesty, and openness to strangers. In turn, religious freedom highlights personal responsibility for religious commitments, so increasing the degree to which individuals actively accept their core ideas, concepts, worldviews, habits, virtues, social engagements, and behaviors. In doing so it fosters what economists are now calling “spiritual capital.”

The evidence is that closed religious systems hamper personal responsibility and therefore economic development. This means that, if we want prosperity, then we should promote religious freedom. If we want economic growth and development, we need to allow religious groups and people to follow their beliefs. Companies and other economic actors should realize the importance of religious freedom, and seek to do business that builds and reinforces it.

This is also important for negotiations with religiously repressive regimes. Some, like Mugabe’s Zimbabwe, care not a whit about their population’s wellbeing but others, such as China and Vietnam, desperately want strong economic growth, not least because their legitimacy depends on it. If they can be shown that their religious repression actually hampers their development goals they might be persuaded to do something even a good bit more about it.

Of course, China might respond that it needs no lessons from anybody in how to promote growth. But China is a poor country, with a per capita income about two thirds that of Botswana’s: it’s just that when you have 1.3 billion capita then you have a colossus of a demoninator. Mainland China is far outpaced by religiously free Taiwan and Hong Kong. Areas within China, such as Tibet, that are worse in religious freedom are correspondingly, worse economically.

Tom Farr, previously the Director of the State Department’s Office of International Religious Freedom, describes in his forthcoming World of Faith and Freedom the continuing “strong diplomatic distaste for understanding religion as a policy matter.” This distaste needs to be overcome. Religious freedom needs to be moved from the fringes of diplomacy, and economics and business, and given a centrality that reflects its growing importance; otherwise we will be ill equipped to face a modern world in which religion increasingly shapes political and economic actors.

Paul Marshall is Senior Fellow at Hudson Institute’s Center for Religious Freedom and editor of the Center’s just released Religious Freedom in the World. Survey rankings are available at And Theodore Roosevelt Malloch Chairman and Founder, Spiritual Enterprise Institute

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