Afraid of God or afraid of man: How religion shapes attitudes toward free riding and fraud

In the Theory of Moral Sentiments, Adam Smith captured the key elements of a theory -later developed by many others – of why religion matters for behavior: self-interest, belief prevailing over belonging and a religion with an image of god as omnipotent, all-seeing and judging. The goal of this paper is to test this theory empirically by investigating how religion constrains people’s willingness to engage in free riding and fraud, i.e. cheating on taxes, falsely claiming government benefits, free riding on public transport and accepting a bribe. The most recent wave of the World Values Survey (2005-2008) is used to look into whether religion might be a factor shaping people’s attitudes toward free riding, and to what extent belief or participation make a difference. Results show that religion effectively exerts an influence mainly through belief in god. This effect was only found significant in those country groups that share an image of god as an active, punishing and judging being in contrast to an abstract and distant transcendental essence. This corresponds to previous literature where the conjecture is that fear of an all-seeing and punishing god alters the costs and benefits associated with fraudulent or immoral behavior making it less attractive.