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Government regulation of religion and investments in human and physical capital

Author

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  • Giuseppina Autiero
  • Concetto Paolo Vinci

Abstract

Purpose - The purpose of this paper is to analyze the causal link between government regulation of religion and the choice of investing in human and physical capital. Design/methodology/approach - The paper uses an analytical model with a government setting the output quota to transfer to religious activities. This depends on the extent to which it is an ideological government that uses religion either for legitimacy aims or for the ideological control of population. Workers and entrepreneurs observe the quota and simultaneously choose the investment in human and physical capital, which may trigger,àlaAcemoglu, social increasing returns. Findings - Directing resources to religious activities may be detrimental to output performance. This may occur if an ideological government sets the optimal quota above the quotas preferred by private agents. This negatively affects the investment in physical and human capital and output performance. Originality/value - Despite the importance of government regulation of religion in the literature, its effect on output performance has not been thoroughly analyzed yet. In this respect, the paper aims to further investigate the causal links between religion regulation related to government type and the investments in human and physical capital and the output level.

Suggested Citation

  • Giuseppina Autiero & Concetto Paolo Vinci, 2010. "Government regulation of religion and investments in human and physical capital," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(2), pages 119-135, January.
    • Handle: RePEc:eme:ijsepp:v:37:y:2010:i:2:p:119-135
    DOI: 10.1108/03068291011007246
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    References listed on IDEAS

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    1. Robert J. Barro & Rachel M. McCleary, 2005. "Which Countries Have State Religions?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1331-1370.
    2. Schlicht, Ekkehart, . "Economic Analysis and Organised Religion," Chapters in Economics,, University of Munich, Department of Economics.
    3. Azzi, Corry & Ehrenberg, Ronald G, 1975. "Household Allocation of Time and Church Attendance," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 27-56, February.
    4. McCleary, Rachel & Barro, Robert, 2002. "Religion and Political Economy in an International Panel," Scholarly Articles 3221170, Harvard University Department of Economics.
    5. Lehrer, Evelyn L., 2005. "Young Women's Religious Affiliation and Participation as Determinants of High School Completion," IZA Discussion Papers 1818, Institute of Labor Economics (IZA).
    6. Pahlavani, Mosayeb & Wilson, Ed & Valadkhani, Abbas, 2005. "Structural Changes in the Iranian Economy: An Empirical Analysis with Endogenously Determined Breaks," Economics Working Papers wp05-05, School of Economics, University of Wollongong, NSW, Australia.
    7. Sander, William, 2002. "Religion and human capital," Economics Letters, Elsevier, vol. 75(3), pages 303-307, May.
    8. Daron Acemoglu, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 779-804.
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    Cited by:

    1. Chen, Yangyang & Murgulov, Zoltan & Rhee, S. Ghon & Veeraraghavan, Madhu, 2016. "Religious beliefs and local government financing, investment, and cash holding decisions," Journal of Empirical Finance, Elsevier, vol. 38(PA), pages 258-271.

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