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Abstract
This research empirically analyzes the relationship between religion distribution and economic performance for a number of Latin American countries. The econometric results using time-series cross-sectional data yield consistent yet relatively mild estimates. Religion as a conduit for modifying values, behaviors, and outcomes does influence aggregate rates of per-capita economic growth and total factor productivity ratios in the region. However, once broken down by religious beliefs, the Catholic religion plays by far the largest role, rendering other well-known religious affiliations less important.
Key words: religion; religious affiliations; growth; Latin America
JEL classification: F43; O47; O54
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1. Introduction
Recent economic literature often regards specialization, diversification, and liberalization schemes as the engine of growth for Latin America (Ellner, 2006). Despite these policy recommendations, the overall economic performance of the region has exhibited mixed results over the last three decades. Countries like Brazil, Chile, and Mexico have achieved sustained economic growth, while others such as Colombia and Costa Rica have recorded less encouraging results, and still others such as Uruguay and Argentina have been left well behind. A raw comparison of these countries would be unfair since they differ greatly in their economic sizes. Models that assume national differentiation, monopolistic competition, or vertical integration have been used to predict how larger economies grow more than smaller ones (Hummels and Klenow, 2005). None of these models integrate other processes to allow for making convergent predictions regarding changes in the economic growth associated with, for instance, religion-driven effects.
The seminal work of Glahe and Vohries (1989) on the economics of religion, followed by the works of Iannaccone (1998), Sacerdote and Glaeser (2001), and Montgomery (2003) on specific religious traditions, support the claim that faith in supernatural forces cannot be neglected as a rational economic response to a diverse set of changes. However, empirical research on the sources of economic growth in Latin America has omitted the impact of religion. A fairly comprehensive social, legal, economic, political, and technological framework has been proposed to draw qualitative inference about trends in economic growth as a result of regional integration (Ortiz and Tajes, 2009). Undoubtedly, these studies have helped to highlight certain methodological approaches that in turn have underscored the important consequences of omitting key explanatory...