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The Religious Transition. A Long-run Perspective


  • Erich Gundlach
  • Martin Paldam


We use the largest common factor in 14 items reported in the World Values Surveys as a robust measure of religiosity. This measure is held to identify the importance of religion in all aspects of people's life. The level of religiosity differs by about 50 percentage points between rich and poor countries. We interpret the change in religiosity in terms of demand and supply. Most components of the demand for religion are reduced by rising levels of per capita income. Rising per capita income also reduces the role of religious institutions as suppliers of core collective goods. Aspects of demand and supply are integrated in a CES production function framework that explains the direction of causality in the observed negative correlation between the level of per capita income and religiosity.

Suggested Citation

  • Erich Gundlach & Martin Paldam, 2010. "The Religious Transition. A Long-run Perspective," DEGIT Conference Papers c015_039, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c015_039

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    References listed on IDEAS

    1. Gundlach, Erich & Paldam, Martin, 2009. "The transition of corruption: From poverty to honesty," Economics Letters, Elsevier, vol. 103(3), pages 146-148, June.
    2. Opfinger, Matthias, 2011. "Religious Market Theory vs. Secularization: The Role of Religious Diversity Revisited," Hannover Economic Papers (HEP) dp-475, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Krueger, Anne O, 1996. "Political Economy of Agricultural Policy," Public Choice, Springer, vol. 87(1-2), pages 163-175, April.
    4. Robert B. Ekelund Jr. & Robert F. Hebert & Robert D. Tollison, 2008. "The Marketplace of Christianity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550717, July.
    5. Gundlach, Erich & Paldam, Martin, 2009. "A farewell to critical junctures: Sorting out long-run causality of income and democracy," European Journal of Political Economy, Elsevier, vol. 25(3), pages 340-354, September.
    6. Rachel M. McCleary & Robert J. Barro, 2006. "Religion and Economy," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 49-72, Spring.
    7. Martin Paldam & Erich Gundlach, 2008. "Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions," Kyklos, Wiley Blackwell, vol. 61(1), pages 65-100, February.
    8. Masters, William A & McMillan, Margaret S, 2001. "Climate and Scale in Economic Growth," Journal of Economic Growth, Springer, vol. 6(3), pages 167-186, September.
    9. 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.
    10. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
    11. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May.
    12. Lipford, Jody & McCormick, Robert E. & Tollison, Robert D., 1993. "Preaching matters," Journal of Economic Behavior & Organization, Elsevier, vol. 21(3), pages 235-250, August.
    13. Laurence R. Iannaccone, 1998. "Corrigenda [Introduction to the Economics of Religion]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
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    Cited by:

    1. Moamen Gouda & Sang-Min Park, 2014. "Religious Loyalty and Acceptance of Corruption," Working Papers 855, Economic Research Forum, revised Nov 2014.
    2. Gouda Moamen & Park Sang-Min, 2015. "Religious Loyalty and Acceptance of Corruption," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(2), pages 184-206, April.
    3. Holger Strulik, 2016. "Secularization And Long-Run Economic Growth," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 177-200, January.
    4. Opfinger, Matthias & Gundlach, Erich, 2011. "Religiosity as a determinant of happiness," Open Access Publications from Kiel Institute for the World Economy 48360, Kiel Institute for the World Economy (IfW).
    5. Kenneth Harttgen & Matthias Opfinger, 2014. "National Identity and Religious Diversity," Kyklos, Wiley Blackwell, vol. 67(3), pages 346-367, August.
    6. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0455-7 is not listed on IDEAS
    7. Erich Gundlach & Martin Paldam, 2016. "Socioeconomic transitions as common dynamic processes," Economics Working Papers 2016-06, Department of Economics and Business Economics, Aarhus University.
    8. repec:kap:jecgro:v:22:y:2017:i:3:d:10.1007_s10887-017-9142-2 is not listed on IDEAS

    More about this item


    Religiosity; economic development; transition; collective goods; biogeography;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion


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