pre reformation roots of the protestant ethic we hypothesize that cultural appreciation of hard work and thrift the protestant ethic according to max weber had a pre reformation origin the proximate source of these values was according to the proposed theory the catholic order of cistercians in support we rst document an impact from the order on growth within the epicenter of the industrial revolution english counties that were more exposed to cistercian monasteries experienced faster productivity growth from the 13th century onwards consistent with a cultural in uence this impact is also found after the monasteries were dissolved in the 1530s second we nd that the values emphasized by weber are relatively more pervasive in european regions where cistercian monasteries were located historically and that the legacy of the cistercians can be detected in present day employment rates across european sub regions

religiosity and earnings management international evidence from the banking industry using an international sample of banks we study how differences in religiosity across countries affect earnings management given that religiosity is a major source of morality and ethical behavior it may reduce excessive risk taking and act as deterrence for earnings manipulations therefore we predict lower earnings management in societies that have higher religiosity consistent with expectations our cross country analysis indicates that religiosity is negatively related to income increasing earnings management for loss avoidance and just meeting or beating prior year s earnings we also find that religiosity reduces income increasing earnings management through abnormal loan loss provisions in additional tests we document that religiosity increases the information value of bank earnings with both earnings persistence and cash flow predictability being enhanced by higher religiosity for the crisis period analysis i e 2007 2009 our evidence shows that banks in countries with higher religiosity exhibit lower probability of reporting asset deterioration and lower probability of having poor performance

content protection resource allocation and variable labour supply a three sector general equilibrium model is used to study the implications of an increase in content protection under the assumption of variable labor supply the role of variable labor supply is highlighted in the paper an increase in domestic content requirements increases the equilibrium labor supply which magnifies the policy effects on the output levels of agricultural manufacturing and intermediate goods and the imports of foreign intermediates furthermore the policy change may increase the national income of the economy while the national welfare is decreased

pricing free bank notes abstract during the pre civil war period us banks issued distinct private monies called bank notes a bank note is a perpetual risky non interest bearing debt claim with the right to redeem on demand at par in specie this paper investigates the pricing of this private money taking into account the enormous changes in technology during the period namely the introduction and rapid diffusion of the railroad a contingent claims pricing model for bank notes is proposed and tested using monthly bank note prices for all banks in north america together with indices of the durations and costs of trips back to issuing banks constructed from pre civil war travelers guides evidence is produced that market participants properly priced the risks inherent in these securities suggesting that wildcat banking was not common because of market discipline

islamic rule and the empowerment of the poor and pious does islamic political control affect women s empowerment several countries have recently experienced islamic parties coming to power through democratic elections due to strong support among religious conservatives constituencies with islamic rule often tend to exhibit poor women s rights whether this reflects a causal relationship or a spurious one has so far gone unexplored i provide the first piece of evidence using a new and unique data set of turkish municipalities in 1994 an islamic party won multiple municipal mayor seats across the country using a regression discontinuity rd design i compare municipalities where this islamic party barely won or lost elections despite negative raw correlations the rd results reveal that over a period of six years islamic rule increased female secular high school education corresponding effects for men are systematically smaller and less precise in the longer run the effect on female education remained persistent up to 17 years after and also reduced adolescent marriages an analysis of long run political effects of islamic rule shows increased female political participation and an overall decrease in islamic political preferences the results are consistent with an explanation that emphasizes the islamic party s effectiveness in overcoming barriers to female entry for the poor and pious

the theory of domestic content protection and content preference this paper investigates the resource reallocation effected by content protection and content preference schemes under alternative assumptions regarding the definition of domestic content the number of intermediate goods and the market structure of the domestic intermediate good industry content protection is shown to be equivalent to a combination of more familiar commercial policies however the extent of application of these policies is determined endogenously by parameters of the production functions for intermediate and final goods a number of anomalous and undesirable outcomes that may result from content protection and content preference are discussed

the impact of milton friedman on modern monetary economics setting the record straight on paul krugman s who was milton friedman abstract paul krugman s essay who was milton friedman seriously mischaracterizes friedman s economics and his legacy in this paper we provide a rejoinder to krugman on these issues in the course of setting the record straight we provide a self contained guide to milton friedman s impact on modern monetary economics and on today s central banks we also refute the conclusions that krugman draws about monetary policy from the experiences of the united states in the 1930s and of japan in the 1990s

beliefs about the determinants of success and employment protection abstract we show that part of the international variation in employment laws is due to different beliefs about the impact of hard work as opposed to luck and connections on success in societies where a greater proportion of people relate their life prospects to chance and connections stronger employment protection is in place the prevalence of such beliefs is likely to hamper labor market reforms

the effect of education on religion evidence from compulsory schooling laws abstract for over a century social scientists have debated how educational attainment impacts religious belief in this paper i use canadian compulsory schooling laws to identify the relationship between completed schooling and later religiosity i find that higher levels of education lead to lower levels of religious affiliation later in life an additional year of education leads to a 4 percentage point decline in the likelihood that an individual identifies with any religious tradition this is a reasonably large effect extrapolating the results to the broader population would suggest that increases in schooling could explain most of the large rise in non affiliation in canada in recent decades

content protection and oligopolistic interactions in oligopolistic situations content protection can have unexpected effects as it changes the nature of interactions between input suppliers with a duopoly it does so in a manner that makes the foreign firm wish to match price increases and decreases of the domestic firm domestic input suppliers can therefore lose from such policies even when set at free trade levels the relation between input demands the form of protection and the degree of substitution between inputs is shown to define the effects of content protection and to provide the basis for understanding who might lobby for protection in different environments

not the opium of the people income and secularization in a panel of prussian counties the interplay between religion and the economy has occupied social scientists for a long time we construct a unique panel of income and protestant church attendance for 175 prussian counties in 1886 1911 the data reveal a marked decline in church attendance secularization coinciding with increasing income the cross section also shows a negative association between income and church attendance but the association disappears when using the panel structure in first differenced models of the 1886 1911 change counties with larger increases in income did not see significantly larger reductions in church attendance in panel models with county and time fixed effects counties with earlier increases in income than others did not see earlier reductions in church attendance and in panel granger causality tests initial income is not related to lower subsequent church attendance or vice versa these findings cast doubt on causal interpretations of the religion economy nexus during this important phase of secularization in prussia i concepts

religion and income heterogeneity between countries this paper tests whether the behaviour of households in different countries is homogeneous with respect to the influence of religion on income the violation of the homogeneity assumption would have two consequences first results based on country studies might not be applicable to other countries second one should be careful when pooling cross country data in this type of research data at household level from the european and world values survey are pooled for 25 western countries we estimate simultaneously an income and a religion equation to correct for the endogeneity of religiousness we find that estimation outcomes are different for low and high income countries whereas church membership is found to have a positive effect on income for high income countries this effect is negative for low income countries this result is robust to denominational distribution participation effects and alternative measures of religiousness

instruments randomization and learning about development there is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development there is skepticism about the ability of econometric analysis to resolve these issues or of development agencies to learn from their own experience in response there is increasing use in development economics of randomized controlled trials rcts to accumulate credible knowledge of what works without overreliance on questionable theory or statistical methods when rcts are not possible the proponents of these methods advocate quasirandomization through instrumental variable iv techniques or natural experiments i argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding two key issues are the misunderstanding of exogeneity and the handling of heterogeneity i illustrate from the literature on aid and growth actual randomization faces similar problems as does quasi randomization notwithstanding rhetoric to the contrary i argue that experiments have no special ability to produce more credible knowledge than other methods and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority i illustrate using prominent experiments in development and elsewhere as with iv methods rct based evaluation of projects without guidance from an understanding of underlying mechanisms is unlikely to lead to scientific progress in the understanding of economic development i welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms jel c21 f35 o19

god insures those who pay formal insurance and religious offerings in ghana this article provides experimental support for the hypothesis that insurance can be a motive for religious donations we randomize enrollment of members of a pentecostal church in ghana into a commercial funeral insurance policy then church members allocate money between themselves and a set of religious goods in a series of dictator games with significant stakes members enrolled in insurance give significantly less money to their own church compared with members who only receive information about the insurance enrollment also reduces giving toward other spiritual goods we set up a model exploring different channels of religiously based insurance the implications of the model and the results from the dictator games suggest that adherents perceive the church as a source of insurance and that this insurance is derived from beliefs in an interventionist god survey results suggest that material insurance from the church community is also important and we hypothesize that these two insurance channels exist in parallel

free entry and efficient rent seeking this paper concerns rent seeking and the extent to which rents are dissipated under various circumstances gordon tullock s 1967 insight that expenditures made to capture an artificially created transfer represent a social waste suggested that the cost to the economy of monopoly and regulation is greater than the simple harberger 1954 deadweight loss indeed under tullock s original formulation and in the extensions of his work by krueger 1974 and posner 1975 rents are exactly dissipated at the social level 1 is spent to capture 1 so that the total welfare loss from such activities is equal to the harberger triangle plus the rectangle of monopoly profits

content protection and tariffs under monopoly and competition abstract this paper compares the relative efficiency of local content schemes and tariffs as alternative means of achieving certain non economic distributional objectives the efficiency comparison is made under the alternative assumptions that an intermediate good component is produced a competitively and b by a single firm the paper shows how the ranking of tariffs and content schemes i is sensitive to these assumptions and ii depends on the local content ratio and the elasticity of demand for components the possible implications of vertical integration in the production process and rent revenue seeking behaviour are also considered insofar as they affect the ranking of policies

religion and work micro evidence from contemporary germany abstract using micro data from contemporary germany this paper studies the connection between protestantism and modern day labor market outcomes to address the endogeneity in self declared religion i exploit a provision in a sixteenth century peace treaty which determined the geographic distribution of catholics and protestants reduced form and instrumental variable estimates provide no evidence of an effect of protestantism on hourly wages however relative to their catholic counterparts protestants do appear to work longer hours the patterns in the data are difficult to reconcile with explanations based on institutional factors or religious differences in human capital acquisition religious differences in individuals values however can account for most of the estimated effects

september 11th and the earnings of muslims in germany the moderating role of education and firm size abstract while available evidence suggests that the events of september 11th negatively influenced the relative earnings of employees with arab background in the us it is not clear that they had similar effects in other countries our study for germany provides evidence that the events also affected the relative earnings of muslims outside the us however the results show that there was no uniform effect on all types of muslims across all types of firms accounting for moderating factors a significantly negative effect can primarily be found for low skilled muslims employed in small and medium sized firms this conforms to theoretical expectations moreover we demonstrate that defining appropriate treatment and control groups is crucial for identifying the effects

religious competition and reallocation using novel microdata we document an important unintended consequence of the protestant reformation a reallocation of resources from religious to secular purposes to understand this process we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources consistent with our framework religious competition changed the balance of power between secular and religious elites secular authorities acquired enormous amounts of wealth from monasteries closed during the reformation particularly in protestant regions this transfer of resources had significant consequences first it shifted the allocation of upper tail human capital graduates of protestant universities increasingly took secular especially administrative occupations protestant university students increasingly studied secular subjects especially degrees that prepared students for public sector jobs rather than church sector specific theology second it affected the sectoral composition of fixed investment particularly in protestant regions new construction shifted from religious toward secular purposes especially the building of palaces and administrative buildings which reflected the increased wealth and power of secular lords reallocation was not driven by preexisting economic or cultural differences our findings indicate that the reformation played an important causal role in the secularization of the west

human capital and the supply of religion abstract we study the role of labor inputs in religious attendance using data on oklahoma methodist congregations from 1961 to 2003 pastors play a significant role in church growth replacing a 25th percentile pastor with a 75th percentile one increases annual attendance growth by 3 a pastor s performance in his or her first church largely the result of random assignment predicts future performance suggesting a causal effect of pastors on growth the deployment of pastors by the church indicates efficient use of labor low performing pastors are more likely to be rotated or exit the sample and high performing pastors are moved to larger congregations

alternative quota and ver allocation schemes a welfare comparison the authors employ a three country equilibrium framework to compare the welfare effects of alternative methods of allocating import quotas or voluntary export restraints among sources of supply they compare a scheme of allocating the quota or the voluntary expor t restraint in proportion to the preexisting free trade market shares with a tariff equivalent quota or voluntary export restraint allocat ion a complete welfare ranking of alternative allocation schemes for eac h of the three countries is obtained copyright 1992 by the london school of economics and political science

religiosity and the cost of debt abstract in a cross country setting we document that stronger religiosity is associated with lower loan interest spread in addition we show that this negative association is more pronounced in countries with weaker creditor rights suggesting that religious values play a more significant role in constraining opportunistic behavior in a weaker legal environment our analysis reveals that stronger religiosity is also related to other favorable terms in loan contracting such as larger facility amount use of accounting based performance pricing and lower upfront fee corroborating our cross country findings we also show that in the u s setting firms in regions with stronger religiosity enjoy lower loan interest spread our study contributes to understanding the important role religiosity plays in debt financing

on pareto improving voluntary export restraints abstract this paper develops the argument that binding voluntary export restraints vers may raise the profits of all firms and the welfare of all trading partners this possibility is shown to arise in a model of cournot oligopoly and is consistent with the theory of the second best vers benefit unconstrained firms if the favorable effect due to the increase in domestic import price outweighs the adverse effect due to a loss in market share then vers will also benefit constrained firms vers will improve the importing country s welfare if they raise the profits of domestic firms more than they reduce domestic consumer surplus the paper synthesizes these findings and derives conditions for vers to be pareto improving

economic and security consequences of supreme values islamic societies have in contemporary times lagged western societies in income growth and human development indicators the supreme values of radical islam further de prioritize economic achievement and impose self deprivation on own populations this paper investigates the reasons for economic outcomes under islam contemporary illustrations are also provided of the self deprivation predicted from pursuit of the supreme value objectives of radical islam the self deprivation is placed in a rent seeking context

increasing financial inclusion in the muslim world evidence from an islamic finance marketing experiment low utilization of household credit in developing countries may be partially due to religious considerations in a randomized marketing experiment in jordan this paper estimates the effect of sharia compliant loan features on demand for credit to comply with islamic law the sharia compliant product uses a bank fee rather than an interest payment structure while keeping the rest of the product features very similar sharia compliance increased the application rate for loans from 18 percent to 22 percent an increase in demand that is equivalent to a 10 percent decrease in interest rates this study also randomly varied the price of the sharia compliant loan and finds that less religious individuals are twice as elastic with respect to price as the more religious by comparing reasons for refusal across treatment groups this paper estimates that survey measures that try to assess the importance of religious objections to conventional credit overestimate the importance of this type of objection by a third

religion religiosity and educational attainment evidence from the compulsory education system in england this paper investigates the effect of religion on the educational attainment of pupils in their final year of compulsory education in england the results show that pupils that identify with any re

quantitative restrictions and tariffs with endogenous firm behavior abstract this paper considers a foreign oligopoly which dominates an importing country s market with its exports of differentiated products it constructs a model where firm behavior is endogenously determined in an infinitely repeated game and it analyzes the impact of trade policies on market conduct and welfare optimal tariffs optimal quotas and optimal tariff quotas are characterized and compared one result is that quotas can enhance competition and increase welfare another result is that quotas can be superior to tariffs finally optimal tariff quotas are welfare superior to either tariffs or quotas alone

values and marginal preferences in international business in a recent paper in this journal maseland and van hoorn argued that values surveys tend to conflate values and marginal preferences this assertion has been challenged by brewer and venaik who claim that the wording of most survey items does not suggest that these elicit marginal preferences this commentary responds to their claim and restates our original argument we stress that the distinction between values and marginal preferences is a conceptual rather than a semantic issue conflation of the two is a problem of stated preferences methods in general regardless of question formats what is more we argue that support for the marginal preferences interpretation of values survey data does not come from the specific wording of questions used in surveys but from a growing number of paradoxical relations between values ratings and outcomes in values research implications are twofold first we argue that in order to measure values we need to look at alternatives to the stated preferences approach such as revealed preferences and experienced preferences of which the latter seems most promising second we find that values surveys eliciting marginal preferences are useful for understanding and predicting differences in behavior in a given context

the effects of a content requirement on a foreign duopsonist abstract this paper considers the operation of a local content requirement in a duopsony between domestic and foreign firms and demonstrates its consequences for the domestic producer of a final good it is shown that content protection may have perverse effects on a foreign firm s profits and may be welfare improving overall shifting profits from the domestic firm to both the foreign firm and domestic input producers

export quota allocations export earnings and market diversification countries facing voluntary export restraints vers often adopt a two tier allocation system for export licenses to the restricted market 1 a basic allocation related to export shares to the restricted market and 2 an open allocation based on export shares to the nonrestricted market such a two tier allocation system increases exports to the nonrestricted market beyond the levels which would exist under a single quota allocation system and has an efficiency cost as it results in some sales being made at less than marginal cost the history of ver negotiations provides a rationale for such a policy and suggests that the recent increase in antidumping cases may be partly associated with the adoption of two tier quota allocation systems nontariff barriers ntbs present a growing threat to a liberal world trading system and slow the relocation of mature industries from developed to developing countries among ntbs voluntary export restraints vers are proliferating and constitute a major element of the new protectionism besides measuring the incidence of ntbs research has concentrated on three aspects of vers the welfare cost to the imposing country their attraction for both exporters and importers and their inefficacy analysis of the first issue has shown that because the exporting country operates the ver there is a rent transfer from the importing country to the exporting country which is often larger than the distortionary costs associated with an equivalent tariff second research indicates that vers have endured because exporting countries receive the rent transfer whereas for importing countries vers can be imposed quickly and lack transparency and therefore attract fewer objections than outright subsidies to the industries seeking protection see for example bhagwati 1986

rules of origin as commercial policy instruments this article examines the role of rules of origin as a commercial policy instrument that targets the input composition of imports using a three country partial equilibrium structure we demonstrate conditions under which the imposition of a binding rule will be welfare improving for an importer facing competitive export suppliers we further show that employing rules of origin in this way would be complementary to rather than a substitute for conventional optimal tariffs copyright economics department of the university of pennsylvania and the osaka university institute of social and economic research association

does religion mitigate tunneling evidence from chinese buddhism in the chinese stock market controlling shareholders often use inter corporate loans to expropriate a great amount of cash from listed firms through a process called tunneling using a sample of 10 170 firm year observations from the chinese stock market for the period of 2001 2010 i examine whether and how buddhism china s most influential religion can mitigate tunneling in particular using firm level buddhism data measured as the number of buddhist monasteries within a certain radius around chinese listed firms registered addresses this study provides strong evidence that buddhism intensity is significantly negatively associated with tunneling this finding is consistent with the view that buddhism has important influence on corporate behavior and can serve as a set of social norms and or an alternative mechanism to mitigate controlling shareholders unethical tunneling behavior in addition my findings also reveal that the negative association between buddhism intensity and tunneling is attenuated for firms that have high analyst coverage the results are robust to various measures of buddhism intensity and a variety of sensitivity tests

has government any role in money abstract recent interest in monetary reform has been sparked by the emergence of a world irredeemable paper money system in light of this interest we review the current validity of four good reasons friedman advanced in 1960 to rationalize government intervention we conclude that the forces that produced government involvement in the past will persist deregulation of financial intermediaries is desirable on grounds of market efficiency though it is an open question whether government should continue as lender of last resort we expect that the present world fiat money standard will neither degenerate into hyperinflation nor revert to a commodity standard

the intergenerational transmission of risk and trust attitudes recent theories endogenize the attitude endowments of individuals assuming that they are shaped by the attitudes of parents and other role models this paper tests empirically for the relevance of three aspects of the attitude transmission process highlighted in this theoretical literature 1 transmission of attitudes from parents to children 2 an impact of prevailing attitudes in the local environment on child attitudes and 3 positive assortative mating of parents which enhances the ability of a parent to pass on his or her attitudes to the child we focus on two fundamentally important attitudes willingness to take risks and willingness to trust others we find empirical support for all three aspects providing an empirical underpinning for the literature an investigation of underlying mechanisms shows that socialization is important in the transmission process various parental characteristics and aspects of family structure are found to strengthen the socialization process with implications for modeling the socialization production function and for policies focused on affecting children s non cognitive skills the paper also provides evidence that the transmission of risk and trust attitudes affects a wide variety of child outcomes implying a potentially large total effect on children s economic situation

on the origins of gender roles women and the plough the study examines the historical origins of existing cross cultural differences in beliefs and values regarding the appropriate role of women in society we test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender norms we find that consistent with existing hypotheses the descendants of societies that traditionally practiced plough agriculture today have less equal gender norms measured using reported gender role attitudes and female participation in the workplace politics and entrepreneurial activities our results hold looking across countries across districts within countries and across ethnicities within districts to test for the importance of cultural persistence we examine the children of immigrants living in europe and the united states we find that even among these individuals all born and raised in the same country those with a heritage of traditional plough use exhibit less equal beliefs about gender roles today jel codes d03 j16 n30 copyright 2013 oxford university press

the religious transition a long run perspective we use factor analysis to derive a robust measure of religiosity from items reported in five waves of the world value survey our measure of religiosity is negatively correlated with per capita income development apparently causes religiosity to fall to about half its pre modern level most components of the demand for religion are reduced by development the supply of religion declines once churches lose control over the institutions providing collective goods like education health and social security these goods used to be supplied by churches jointly with religious services but tend to be supplied by the state with rising levels of development aspects of supply and demand are integrated in a ces production function framework that can explain the direction of causality in the observed negative correlation between income and religiosity

religion and economy religion has a two way interaction with political economy with religion viewed as a dependent variable a central question is how economic development and political institutions affect religious participation and beliefs with religion viewed as an independent variable a key issue is how religiosity affects individual characteristics such as work ethic honesty and thrift and thereby influences economic performance in this paper we sketch previous studies of this two way interaction but focus on our ongoing quantitative research with international data

wheat agriculture and family ties abstract several recent contributions to the literature have suggested that the strength of family ties is related to various economic and social outcomes for example alesina and giuliano 2014 highlight that the strength of family ties is strongly correlated with lower gdp and lower quality of institutions however the forces shaping family ties remain relatively unexplored in the literature this paper proposes and tests the hypothesis that the agricultural legacy of a country matters for shaping the strength of its family ties using data from the world values survey and the european values study the results show that societies with a legacy of cultivating wheat tend to have weaker family ties analysis at the sub national level us data and the country level corroborate these findings the estimations allow for alternative hypotheses which propose that pathogen stress and climatic variation can potentially also give rise to the formation of family ties the results suggest that the suitability of land for wheat production is the most influential factor in explaining the variation in the strength of family ties across societies and countries

adaptive learning and the transition to fiat money this article explores some implications of adaptive learning for monetary evolution using a search theoretic framework that allows for media of exchange network effects adaptive learning precludes any voluntary transition to a fiat standard from a non monetary state of nature and can account for the historically observed tendency for fiat monetary standards to emerge only following the prior appearance of commodity money and the widespread employment of redeemable banknotes adaptive learning can also account for governments frequent resort to coercive measures to force a switch to fiat money and for their ability to affect such a switch even when doing so is not pareto optimal exchange media fall into the general category of products for which the utility that a user of the good derives from use of the good increases with the number of other agents using the good katz and shapiro 1985 p 424 there are two reasons for these positive network effects 1 indirect the more agents who employ a particular medium of exchange the more likely it is that prices will be quoted in terms of that medium of exchange i e that the medium of exchange will also serve as the economy s principle medium of account the costs of exchange are less for a medium of exchange that trades at par this indirect external effect is analogous to one encountered in computer hardware the more purchasers of a particular kind of hardware the more likely manufacturers of software are to supply compatible products 2 direct the more persons who use a particular exchange medium the better its quality or performance this direct network effect is analogous to one encountered in communications technologies such as telephones the analogy is especially close for fiat money which is useless to an isolated individual this article examines some ways in which media of exchange network effects influence the evolution of monetary standards and especially their role in determining both when and how a transition may occur from barter or commodity money to fiat money the approach taken here emphasises the role of adaptive learning where agents select exchange strategies that reflect static expectations concerning other agents preferred strategies although the exchange game agents play generally has multiple nash equilibria including one in which all agents accept fiat money adaptive learning precludes a spontaneous transition from barter to a fiat monetary standard even where a fiat standard would be welfare enhancing yet such learning does not rule out the spontaneous evolution of a commodity money standard or the eventual substitution of redeemable banknotes for commodity money readers familiar with the literature on network effects will recognise this

identifying the causal effect of income on religiosity using the earned income tax credit abstract how do economic conditions income and the generosity of social insurance affect religious behavior this paper provides novel evidence for the united states using variation in earned income tax credit benefits across states over time and by number of children in the raw data income and religiosity have a trivial relationship in contrast the instrumental variables strategy shows that increases in income from the eitc are found to sizably reduce religious attendance among low income individuals among individuals who attend the results indicate that an additional 1000 in annual income is associated with a decrease of roughly 1 service per year as compared to an average of 16 services per year the effect arises mainly along the intensive margin decreasing devout behavior and increasing more marginal attendance but having little impact on whether an individual participates at all or on beliefs there are also minimal effects on the occurrence and amount of contributions to religious organizations the results extend our understanding of the determinants of religiosity the relationship between governmental income support and religious behavior and the social effects of the earned income tax credit

the economics of special interest politics the case of the tariff this paper investigates the interaction of politicians and special interest lobbies the goal is to model the equilibrium levels of redistributive policies such as taxes subsidies tariffs and regulatory decisions the model is applied throughout to the setting of tariffs by contributing to political campaigns special interest lobbies generate economic returns higher tariffs generate revenue for import competing industries through higher product prices higher milk support prices raise dairy farm income and so forth the lobby invests to maximize these net economic returns in evaluating their chances of election politicians weigh the favorable effects of special interest money against the unfavorable association with the lobby and the social cost of the redistributive policy section i explores the lobby s problem it describes a formalization of mancur olson s discussion of the voluntary provision of public goods and optimal contributions by lobbies to political campaigns section ii describes determination of the equilibrium tariff positions of each politician in a political campaign

religiosity and income a panel cointegration and causality analysis abstractin this article we examine the long run relationship between religiosity and income using retrospective data on church attendance rates for a panel of countries from 1930 to 1990 we employ panel cointegration and causality techniques to control for omitted variable and endogeneity bias and test for the direction of causality we show that there exists a negative long run relationship between the level of religiosity measured by church attendance and the level of income measured by the log of gdp per capita the result is robust to alternative estimation methods potential outliers different samples different measures of church attendance and alternative specifications of the income variable long run causality runs in both directions higher income leads to declining religiosity and declining religiosity leads to higher income

the impact of bad writing in economics we find significant style differences between articles written by economists for their professional journals and articles by the same economists in the wall street journal we find no evidence that style influences the professional success of economists which suggests that the private rewards to improving the quality of writing are low indeed each community of scholars has probably adopted a professionally correct writing style from which its members diverge little however scholars do alter their rhetorical style to communicate effectively with audiences other than the professional community this suggests that intra and inter group written communication by economists is efficient

national culture the missing country level determinant of corporate governance it is well known that firm level corporate governance practices vary mainly between rather than within countries but country level factors such as legal and financial institutions explain less than 50 of this cross country variation in this article we show that two dimensions of national culture individualism and uncertainty avoidance capture about 90 of the country fixed effects and outperform the country level explanatory variables used in prior literature we argue that culture works through a tradeoff between managerial expertise and certainty of control a tradeoff largely overlooked by prior literature that captures a country s preference for the anglo saxon approach versus the direct control approach for governance consistent with this argument we find that the effect of culture on corporate governance varies across firms with different needs for managerial expertise and certainty of control we also find that culture interacts with other factors to determine firm level governance

the bicausal relation between religion and income in this article the relation between religion and income is investigated using a micro dataset for the netherlands religion is measured by religious membership and by participation instead of estimating a religion equation and an income equation separately joint regression is preferred since this generally yields more efficient estimates following the single equation approach both religious measures are found to decrease income significantly and income is found to affect religion negatively however these cross effects become insignificant once the equations are estimated simultaneously in contrast the effects of socio economic characteristics on religion and income hardly differ between the approaches

quota licenses for imported capital equipment could bureaucrats ever do better than the market abstract despite valid criticisms many developing countries have issued non transferable import licenses to a limited number of final good producers so as to restrict imports of an input such as capital equipment this paper demonstrates that for a given import quota such licensing restrictions can actually increase domestic production of both the input and the final product but at the cost of reduced quota rents under pure competition domestic welfare falls relative to the use of marketable quota licenses but if foreigners would get the quota rents or if external economies cause decreasing costs then bureaucratic allocation can dominate

why did the netherlands develop so early the legacy of the brethren of the common life this research establishes a link between the brethren of the common life bcl a religious community founded by geert groote in deventer in the late fourteenth century and the early economic development of the netherlands the bcl stimulated human capital accumulation the historical analyses show that the bcl contributed to the high rates of literacy to the high level of book production and to city growth in the netherlands these findings are supported by a set of ols regressions and further corroborated by 2sls estimates that use distance from deventer as an instrument for the presence of the bcl

earthquakes religion and transition to self government in italian cities this article presents a unique historical experiment to explore the dynamics of institutional change in the middle ages we have assembled a novel data set where information on political institutions for northern central italian cities between 1000 and 1300 is matched with detailed information on the earthquakes that occurred in the area and period of interest exploiting the panel structure of the data we document that the occurrence of an earthquake retarded institutional transition from autocratic regimes to self government the commune in cities where the political and the religious leaders were the same person episcopal see cities but not in cities where political and religious powers were distinct non episcopal see cities such differential effect holds for destructive seismic episodes and for events that were felt by the population but did not cause any material damage to persons or objects ancillary results show that seismic events provoked a positive and statistically significant differential effect on the construction and further ornamentation of religious buildings between episcopal and non episcopal see cities our findings are consistent with the idea that earthquakes interpreted in the middle ages as manifestation of the will and outrage of god represented a shock to people s religious beliefs and as a consequence enhanced the ability of political religious leaders to restore social order after a crisis relative to the emerging communal institutions this interpretation is supported by historical evidence

a note on proportionally distributed quotas traditional theory has usually condemned trade restriction as an irrational or misguided interference with efficient resource allocation the two notable exceptions have been the optimum tariff and the infant industry argument for protection more recently however trade theorists have begun to investigate the possibility that tariffs are used to achieve certain noneconomic objectives that is ones reflecting considerations not captured by individual private consumption their work has evaluated the relative efficiency of tariffs production subsidies and consumption taxes as instruments for implementing such objectives as a given increase in domestic production or restraint of imports below the free trade level 2 this note seeks to extend the analysis by comparing a tariff or equivalent quota with a commonly used protective arrangement which we term a proportionally distributed quota as alternative means of pursuing various objectives of trade restriction we do not intend to de emphasize the cost even when minimized of achieving certain objectives through protection rather to the extent that these objectives are the end result of a process of political bargaining they may be difficult to alter merely through demonstration of their welfare cost to the economy as a whole of course calculation and promulgation of this cost makes it harder for special interest groups to obtain economic privileges at the expense of the majority however we should not overlook the possibility that certain noneconomic objectives are truly public goods which provide sufficient collective utility to the majority to justify their cost in terms of foregone consumption in either case it is desirable to provide the least cost method of achieving the objective for purposes of this paper noneconomic can best be understood as outside the model it is well known that any protective goal can be achieved through some combination of a consumption tax and a production subsidy however tariffs and quotas are employed much more frequently than direct subsidies probably for reasons of political feasibility in this paper we use a familiar model to show that a proportionally distributed quota implies a smaller tax and larger subsidy than a tariff or conventional quota and thus provides a more economically efficient but equally practical means of achieving some objectives as long as markets remain competitive import quotas distributed in most of the usual ways are analytically equivalent to tariffs since they will acquire a premium value in the market reflecting the domestic scarcity of the importable good 4 the only difference is in the distribution of the proceeds in fact the import licenses can be auctioned to the public in which case assuming again that markets remain competitive and in particular that the supply of licenses is not monopolized the distribution of the proceeds is also equivalent since the auction should yield the same revenue as would be produced by a tariff we designate this type of restriction below as a tariff quota in contrast the proportionally distributed quota is a system in which import rights are assigned to producers or consumers in proportion to their individual production or consumption of the restricted good we show below that which group receives the licenses is irrelevant to the resulting equilibrium for a given objective of protection again markets remnaining competitive this is analogous to the fact that the economic incidence

respect responsibility and development abstract we develop a theory that explains how two core values respect for others and responsibility affect productivity the accumulation of capital and output per worker using data from the world values survey we empirically test the model using a panel dataset that includes 82 countries over six distinct years we find that these two core values are important to production and that their impact is substantial we also show that respect and responsibility reduce the influence of trust and mitigate the negative macroeconomic effects associated with fractionalized societies our results are robust to various treatments for endogeneity and under alternative samples

secularization and long run economic growth in a consumer culture the consumer not christ is king skye jethani i introduction this paper proposes a novel theory of identity choice and endogenous economic growth in which secularization is both cause and consequence of successful economic development it contributes to the literature on the fundamentals of economic growth acemoglu 2009 by proposing a theory of how culture driven by economic change may change rapidly and where cultural change in turn drives further economic development the core idea is that through abandoning their religious identity their strife for salvation from the dire situation on earth individuals are able to derive more pleasure from material possessions and consumption activities the prospect of pleasure in this world motivates them to work harder and save more for future consumption increasing labor supply and capital accumulation induces technological progress and income growth which entices further individuals to abandon religion in order to derive more pleasure from material possessions which motivates them to supply more labor and capital etc through this feedback loop the economy takes off when religiosity declines and industrialization is observed in conjunction with secularization following the literature i define religious as believing in a god or a group of gods and following the rules of a religion mckendrick brewer and plumb 1982 although the proposed theory is perhaps more general the paper focuses on economic and religious developments of the western world which means it focuses on christian beliefs i define as the core creed of christian religion that through belief in and acceptance of the death and resurrection of jesus christ sinful humans can be reconciled with god and thereby are offered salvation and the promise of eternal life metzger and coogan 1993 the christian church is the agent specialized in promoting the desire for these immaterial heavenly values and goals ekelund et al 1997 i define as religious identity the self identification with christian religious values in section ii i argue that individuals identify with either immaterial self transcendence values religion or with material self enhancement values materialism i argue that individuals using individual possessions or consumption activities as identity fixers have chosen a secular materialistic identity i define as secularization the decline in the social significance of religion manifested by the decline in the number of religious people individuals identifying with religion measured by declining church attendance bruce 2011 most scholars of religion agree that for christians church attendance is a good measure of religiosity brierley 1999 bruce 2011 warner 2010 attending the sunday service was obligatory for protestants of most denominations as well as for members of the anglican church and deliberate failure to attend sunday mass is still considered to be a grave sin according to catholic canon law in the economists language church attendance is a revealed preference because church is the only place where sins can be forgiven not attending shows a loss of interest in salvation and eternal life the main goods offered by the church attendance is strongly but not perfectly correlated with adherence in particular attendance declines before membership declines bruce 2011 moreover there exists a temporary phase of fuzzy fidelity in which many individuals claim that while religion is not important in their life they continue to consider themselves christians and occasionally appear in church voas 2008 this temporary state is not explicitly taken into account in the theory below but considered to be best described by a secular identity as industrialization secularization is a general phenomenon observed throughout the western world the first data point however is only observed in 1851 for england when church attendance was about 60 brierley 1999

the multidimensional effects of religion on socioeconomic development a review of the empirical literature religion plays a fundamental role in most people s lives with profound implications for socioeconomic development this survey provides a comprehensive and systematic overview of the causal mechanisms between religion and development discussed and tested in the economics literature and reviews quantitative empirical evidence on the actual effects of religion on economic and social dimensions of development we start by disaggregating the concept of religion into four religious dimensions and propose a framework to conceptualize causal mechanisms numerous mechanisms are possible but only a few uncontested findings exist religion is ambivalent vis a vis development although religious ideas can foster certain forms of human capital acquisition and labor market participation scholars have found a negative relationship between religious dimensions and both income and gender equality as well as innovation activities religious identity is also a source of labor market discrimination and has ambivalent effects on economic growth and social cohesion methodological challenges refer to the availability of fine grained data especially for developing countries the use of concepts and definitions and the lack of causal inference

the impact of rules of origin on trade flows a great deal of post war trade liberalization resulted from regional preferential trade agreements preferential trade agreements cut tariffs on goods originating only in those nations that have signed the agreement therefore they need rules of origin to determine which goods benefit from the tariff cut rules of origin have long been ignored for two good reasons they are dauntingly complex and at first sight appear mind numbingly dull the third standard reason for ignoring them the assertion that they do not matter much turns out to be wrong we show that rules of origin are important barriers to trade moreover such rules are emerging as an important trade issue for three additional reasons first preferential trade deals are proliferating worldwide second the global fragmentation of production implies complex international supply chains which are particularly constrained and distorted by rules of origin third the extent to which regionalism challenges the wto based trading system depends in part on incompatibilities and rigidities built into rules of origin our empirical results exploit a natural experiment that was created by technical changes to europe s lattice of rules of origin roos in 1997 this change known as diagonal cumulation relaxed the restrictiveness of rules of origin on trade among the eu s free trade agreement fta partners without changing the degree of tariff preference our analysis allows us to establish a lower bound and upper bound estimate of trade impact of roos reduced trade among the eu s trade partners the lower bound we find is something like 10 while the upper bound is around 70 the second part of the paper draws the policy lessons that arise from considering the implications of our empirical findings the most direct lessons are for fta writers we argue that europe s implementation of cumulation is a good way of reducing the welfare reducing impact of overlapping rules of origin without gutting their fraud fighting ability we also suggest a three part procedure for establishing a more multilateral framework for rules of origin which would be more transparent flexible administratively feasible and negotiable patricia augier michael gasiorek and charles lai tong

which countries have state religions among 188 countries 72 had no state religion in 2000 1970 and 1900 58 had a state religion throughout and 58 had 1 or 2 transitions we use a hotelling spatial competition model to analyze the likelihood that the religion market would be monopolized similar forces influence a government s decision to establish a state religion consistent with the model the probability of state religion in 1970 and 2000 is increasing with the adherence rate to the main religion has a nonlinear relation with population and has little relation with per capita gdp the probability of state religion decreases sharply under communism but lagged communism has only a weak effect with costly adjustment for institutions the probability of state religion in 1970 or 2000 depends substantially on the status in 1900 this persistence is much stronger for countries with no major regime change than for countries with such a change

the welfare consequences of directly unproductive profit seeking dup lobbying activities price versus quantity distortions abstract this paper is a contribution to the growing literature on the theory of what bhagwati 1982 has christened the theory of dup activities these are activities that use up real resources in making profits i e income without producing directly or indirectly a good they result therefore in the contraction of the availability set defined on goods for one generic subset of such dup activities namely distortion triggered lobbying activities the paper establishes asymmetrical propositions on the possibility of such dup lobbying resulting in a paradoxical improvement of welfare

more on the non equivalence of voluntary export restraints abstract this note demonstrates that vers limiting exporters to a percentage of the domestic market are not equivalent to other trade restrictions and that they can be inferior to equivalent import quotas even when the quota rents accrue to foreign exporters

diffusing knowledge while spreading god s message protestantism and economic prosperity in china 1840 1920 we provide an account of how protestantism promoted economic prosperity in china a country in which protestant missionaries penetrated far and wide during 1840 1920 but only a tiny fraction of the population had converted to christianity by exploiting the spatial variation in the missionaries retreat due to the boxer uprising to identify the diusion of protestantism we

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

do women supply more public goods than men preliminary experimental evidence from matrilineal and patriarchal societies francine d blau cornell university janet m currie columbia university charles a holt university of virginia steffen andersen porcelaeenshaven 16 a 1 dk 2000 frederiksberg tel 45 3815 2591 fax 45 3815 2576 e mail sa eco cbs dk erwin bulte warandelaan 2 5037 ab tilburg the netherlands tel 31 13 466 2707 erwin bulte wur nl uri gneezy otterson hall room 4s136 9500 gilman dr 0553 la jolla ca 92093 0553 phone 858 534 4312 fax 858 534 0745 ugneezy ucsd edu john a list corresponding author 1126 east 59

economic institutions and comparative economic development a post colonial perspective summary existing literature suggests that either colonial settlement conditions or the identity of colonizer were influential in shaping the post colonial institutional environment which in turn has impacted long run economic development these two potential identification strategies have been treated as substitutes we argue that the two factors should instead be treated as complementary and develop an alternative and unified iv approach that simultaneously accounts for both settlement conditions and colonizer identity to estimate the potential causal impact of a broad cluster of economic institutions on log real gdp per capita for a sample of former colonies using population density in 1500 as a proxy for settlement conditions we find that the impact of settlement conditions on institutional development is much stronger among former british colonies than colonies of the other major european colonizers conditioning on several geographic factors and ethno linguistic fractionalization our baseline 2sls estimates suggest that a standard deviation increase in economic institutions is associated with a three fourth standard deviation increase in economic development our results are robust to a number of additional control variables country subsample exclusions and alternative measures of institutions gdp and colonizer classifications we also find evidence that geography exerts both an indirect and direct effect on economic development

the resource cost of irredeemable paper money since 1971 no major currency has a formal link to a commodity for the first time in history every currency is wholly irredeemable not as a temporary expedient but as a permanent matter monetary economists have generally treated irredeemable paper money as involving negligible real resource costs compared with a commodity currency to judge from recent experience that view is clearly false as a result of the decline in long term price predictability a key question for the future is what if any substitute for a commodity standard will emerge as a long term anchor for the price level

a dark side of social capital kinship consumption and savings abstract we explore whether traditional sharing norms in kinship networks affect consumption and accumulation decisions of poor black households in kwazulu natal south africa using a proxy for the number of family dependents our results are consistent with the interpretation that households try to evade their sharing obligations by i accumulating durables that are non sharable at the expense of durables that may be shared and ii reducing savings in liquid assets by attenuating accumulation incentives kinship sharing may come at the expense of income growth if so a culturally induced poverty trap can possibly eventuate we demonstrate tentative evidence that more extensive kinship networks are associated with lower incomes

gender inequality endogenous cultural norms and economic development this research focuses on the role played by cultural norms in the long run persistence of gender inequalities cultural norms about gender roles are considered to be endogenous and can generate gender inequality and low development traps indeed when the gender gap is internalized it leads to inegalitarian views about gender roles due to these inegalitarian beliefs boys receive more education and the initial gender gap is reinforced the existence of gender inequality traps is pointed out by the world bank as a major obstacle for economic development wdr 2006 the present article allows for a better understanding of the persistence of such traps and the means to escape

the mission human capital transmission economic persistence and culture in south america this article examines the long term consequences of a historical human capital intervention the jesuit order founded religious missions in 1609 among the guarani in modern day argentina brazil and paraguay before their expulsion in 1767 missionaries instructed indigenous inhabitants in reading writing and various crafts using archival records as well as data at the individual and municipal level i show that in areas of former jesuit presence within the guarani area educational attainment was higher and remains so by 10 15 250 years later these educational differences have also translated into incomes that are 10 higher today the identification of the positive effect of the guarani jesuit missions emerges after comparing them with abandoned jesuit missions and neighboring franciscan guarani missions the enduring effects observed are consistent with transmission mechanisms of structural transformation occupational specialization and technology adoption in agriculture

from farmers to merchants conversions and diaspora human capital and jewish history from the end of the second century ce judaism enforced a religious norm requiring fathers to educate their sons we present evidence supporting our thesis that this change had a major influence on jewish economic and demographic history first the high individual and community cost of educating children in subsistence farming economies 2nd to 7th centuries prompted voluntary conversions of jews that account for a share of the reduction from 4 5 to 1 2 million second the jewish farmers who invested in education gained the comparative advantage and incentive to enter skilled occupations during the urbanization in the abbasid empire in the near east 8th and 9th centuries and they did select themselves into these occupations third as merchants the jews invested even more in education a precondition for the mailing network and common court system that endowed them with trading skills demanded all over the world fourth the jews generated a voluntary diaspora within the muslim empire and later to western europe fifth the majority of world jewry lived in the near east when the mongol invasions in the 1250s brought this region back to a subsistence farming economy in which many jews found it difficult to enforce the religious norm and hence converted as it had happened centuries earlier jel j1 j2 n3 o1 z12 z13

impact of domestic content requirement on the us tobacco and cigarette industries abstract using a log linear equilibrium displacement model we quantify the impact of the recent domestic tobacco content requirement on us cigarette manufacturing we investigate effects on us growers and manufacturers and competing tobacco imports the policy increased domestic use of us grown tobacco but induced a small negative output effect tobacco imports decreased substantially the paper also discusses the political economic incentives for us manufacturers to comply with such policies the political cooperation between us growers and manufacturers decreases the opposition of the latter to protectionist policies championed by the former

why europe a critique of institutionalist and culturalist economics abstract economists have recently started to discuss the roles of institutions and cultural beliefs in explaining the performance of civilizations this paper investigates two views institutionalist economics and culturalist economics with regard to the question of why europe rose economically a few centuries ago while other regions of the world lagged behind these two views share a common platform raised on two pillars first both regard institutions beliefs as extra economic as primordial entities that ultimately stand independent of economic performance second both regard economic performance as fully determined by institutions beliefs i e normative causality in the sense that institutions beliefs determine performance douglass north s 2005 analysis of economic performance for example is based on both pillars concerning the primordial pillar he attributes the mystery of the rise of europe to primordial beliefs viz christian dogma and english individualism concerning the normative pillar he presumes that such beliefs have almost one to one correspondence with economic performance this paper though maintains that the two pillars primordial analysis and normative causality are rather fragile advocates of the first pillar fail to recognize that institutions beliefs are endogenous advocates of the second pillar fail to recognize that institutions beliefs can give rise to diverse economic performances

religion and earnings is it good to be an atheist with religious parental background abstract using german employee data we find that being raised by two religious parents and having no current religious affiliation is associated with higher earnings this conforms to the hypothesis that people who are raised religiously and reject religion as adults are economically more successful as they combine a strong internalized work ethic with an increased interest in present consumption as opposed to afterlife consumption

efficient rents 2 free entry and efficient rent seeking in the competition for a monopoly right in which the number of bidders is fixed tullock and others have found the value of the resources spent in the aggregate to capture the transfer to be sometimes less than and sometimes greater than the value of the monopoly we think this approach to be incomplete since it leaves unanswered the question of what determines the number of individuals who will vie for the right to be the monopolist it is unsatisfactory to imagine for example that the franchisor sets the number of contestants one could then foresee that rent seeking would arise to influence the permissible number of bidders and this merely moves the rent seeking dissipation question one step back