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Beyond religion and culture: The economic consequences of the institutionalization of sharia law

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  • Lattanzio, Gabriele

Abstract

Religious and cultural practices have major implications for a Country's economic performance. However, it is not clear if the formal institutionalization of these social norms within a country's legal system causes material economic effects. In this study I show this to be the case. By employing the synthetic control methodology to mitigate endogeneity concerns, I show that the institutionalization of Sharia Law within a Muslim-majority country's legal system causes material economic costs. Results hold in different settings, confirming that the governmental enforcement of existing social norms constrain individuals' social and economic freedom, ultimately resulting in worsened economic outcomes.

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  • Lattanzio, Gabriele, 2022. "Beyond religion and culture: The economic consequences of the institutionalization of sharia law," Emerging Markets Review, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:ememar:v:52:y:2022:i:c:s1566014122000358
    DOI: 10.1016/j.ememar.2022.100918
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    More about this item

    Keywords

    Law and economics; Islamic economics and finance; Synthetic control;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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