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Religious origins of democracies and dictatorships

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  • Grigoriadis, Theocharis

Abstract

In 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 Info

Paper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2013/16.

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Date of creation: 2013
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Handle: RePEc:zbw:fubsbe:201316

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Keywords: democracy; dictatorship; collectivism; individualism; modernization; Orthodoxy; Judaism;

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  1. Cremer, Helmuth & Pestieau, Pierre, 2002. "Social Insurance Competition between Bismark and Beveridge," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 141, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2003.
  2. Bradley J. Ruffle & Richard H. Sosis, 2003. "Cooperation and the In-Group-Out-Group Bias: A Field Test on Israeli Kibbutz Members and City Residents," Experimental, EconWPA 0310002, EconWPA.
  3. repec:cup:cbooks:9780521855266 is not listed on IDEAS
  4. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 123(3), pages 1111-1159, August.
  5. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods And Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1243-1284, November.
  6. Daron Acemoglu, 2002. "Why Not a Political Coase Theorem? Social Conflict, Commitment and Politics," NBER Working Papers 9377, National Bureau of Economic Research, Inc.
  7. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," Discussion Papers, Stanford Institute for Economic Policy Research 07-048, Stanford Institute for Economic Policy Research.
  8. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(5), pages 912-50, October.
  9. Maskin, Eric & Tirole, Jean, 2001. "Markov Perfect Equilibrium: I. Observable Actions," Journal of Economic Theory, Elsevier, Elsevier, vol. 100(2), pages 191-219, October.
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