Religious origins of democracies and dictatorships
AbstractIn this paper, I argue that religion matters for the emergence of democracies and dictatorships. Religion is defined as a stochastically set demand for public goods. Different types of religious collectives reflect different tradeoffs between centralized resource distribution and market rewards. Religions are defined as collectivist, when their respective collectives facilitate the hierarchical provision of common pool resources toward their members at the expense of market incentives. Religions are defined as individualist, when their respective collectives recruit and preserve their members on the basis of market incentives. Islam, Orthodoxy and Catholicism are treated as collectivist religions, whereas Judaism and Protestantism as individualist ones. I provide a historical overview that designates the Jewish kibbutz as the collective of democracy and the Russian-Orthodox monastery as the collective of dictatorship. Assuming a collectivist economy, I solve the radical government and modernization stochastic games. I find that modernization occurs in a collectivist economy when the threat of a radical government is imminent and when the leader has high extraction rents over the economy. In order to stay in power, the leader credibly commits to provide more public goods in the future, and thus modernization occurs. Underdevelopment occurs at intermediate levels of state enforcement, modernization at low levels and centralization at high levels of state enforcement. The emergence of a radical government is more likely in a collectivist rather than in an individualist economy. --
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Bibliographic InfoPaper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2013/16.
Date of creation: 2013
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democracy; dictatorship; collectivism; individualism; modernization; Orthodoxy; Judaism;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
- P32 - Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
- Z12 - Other Special Topics - - Cultural Economics - - - Religion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-14 (All new papers)
- NEP-CDM-2013-11-14 (Collective Decision-Making)
- NEP-CIS-2013-11-14 (Confederation of Independent States)
- NEP-CUL-2013-11-14 (Cultural Economics)
- NEP-HIS-2013-11-14 (Business, Economic & Financial History)
- NEP-PBE-2013-11-14 (Public Economics)
- NEP-POL-2013-11-14 (Positive Political Economics)
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