The Impact of Christian Theology on Economic Outcomes

Religion, spiritual practices, and faith are easily observable factors in the daily lives of people almost anywhere in the world. This leads many to speculate and theorize about the role of religion in driving economic and social outcomes. Positive correlations abound between religiosity and a host of factors that may influence economic success. Correlation, however, does not imply causation and pinning down the real causal relationship is complicated by the fact that people tend to choose their religion. Therefore, observing that people of faith experience different economic outcomes fails to account for the fact that unobservable personal characteristics may cause both religiosity and economic outcomes.

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The Effect of Income on Religiousness

A majority of the world’s population claim adherence to a religion. But while there is a growing literature on the effects of religiousness on economic behaviour, we know very little about how economic factors affect religiousness. How income affects religious behaviour and affiliation is an especially important question for developing countries experiencing a rise in the average incomes of poor and lower middle class households. Whether these families will become more or less religious (or even change their religion) as they grow richer will have an impact on the way their societies develop.

That’s the opening paragraph of a new paper recently published in the July edition of the American Economic Journal: Applied Economics. Interestingly they found “significant effects of income on religiousness. Households that earn more go to church more often. Households that earn more are also more likely to be members of an evangelical community rather than of the mainstream catholic church.”

This outcome is contrary to my priors. My experience has made me think that the less money people have the more religious they tend to be. The explanation (in my mind) is that the less money you have the less capable you are to do things on your own. You need constant help from others and you are giving constant help to others. This sort of behavior breeds humility and orients an individual well towards a healthy spiritual relationship with God. On the flip side, more money breads a certain kind of hubris a “I can do it on my own” kind of attitude. 

The study uses a regression discontinuity design to establish a causal relationship between income and several measures of religiosity. For those unfamiliar with regression discontinuity, let me briefly explain (as it is quite a neat tool). In Ecuador there is a cash transfer program that gives poor households a monthly transfer of $35. What a regression discontinuity empirical strategy does is exploits the cut-off point where eligibility for the cash transfer program is determined. The purpose is quite intuitive: households on either side of the cut-off point are quite similar save for eligibility in the cash transfer program. Therefore any difference between households, on average, can be interpreted as an average treatment effect. See the figure below for the results of this study.

Screen Shot 2015-06-29 at 4.17.28 PM

Of course, the usual caveats exist: This experiment was carried out in Ecuador, and the results may not hold everywhere. The results are likely very sensitive to definitions of “religiousness”. It’s not clear these effects will persist (in magnitude or direction) at higher levels of income. Nevertheless, here’s the last paragraph of this interesting paper:

Sociologists have long adhered to the so-called secularisation theory which posits that societies become less religious as they develop. This theory has come up for criticism, not least because of the continuing importance of religion in the US. Our results show that it is far from clear that higher income leads to lower religious participation. We should therefore not automatically expect other societies to follow the European example and become more secular as they grow richer. Rather, church membership and attendance seem to be similar to membership and participation in social clubs. They are costly in terms of time and money and, for the households in our sample, have a positive income elasticity.

HT: Bruce Wydick

The Poor are Poor because…

Tim Hoiland, a fellow theology/development/general stuff blogger, posted a piece last week entitled, “The Church Among the Poor“. In it he quotes Jayakumar Christian (Christian development scholar) who says, “The poor are poor because someone else is trying to play God in their life”.

Now, there are a lot of so-called axioms that start with “the poor are poor…” To list a few (in no particular order):

“The poor are poor because they lack capital (money).”
“The poor are poor because of a lack of human rights.”
“The poor are poor because they are dependent on the rich.”
“The poor are poor because of the rich.”
“The poor are poor because poverty traps.”
“The poor are poor because of a lack of foreign assistance.”
“The poor are poor because of foreign assistance.”
“The poor are poor because of political corruption.”
“The poor are poor because of extractive political and economic institutions.”
“The poor are poor because they are unlucky.”
“The poor are poor because they make bad decisions.”
“The poor are poor because they are lazy.”
“The poor are poor because they have poor soil productivity.”
“The poor are poor because there are no markets.”
“The poor are poor because of geography.”
“The poor are poor because of a lack of freedom.”
“The poor are poor because they are discouraged.”
“The poor are poor because of misguided policies.”
“The poor are poor because of mal-investment.”
“The poor are poor because they hyperbolically discount the future.”
“The poor are poor because of culture.”
“The poor are poor because of colonialism.”
“The poor are poor because of capitalism.”
“The poor are poor because of a lack of labor specialization.”
“The poor are poor because of a lack of technology adoption.”

…and so on… some of these are more right than others, some overlap with others, and of course, there are many that have been left out.

It strikes me that Jayakumar’s axiom is probably one of the most-right among this list. (Excluding, of course, Acemoglu and Robinson’s theory, which almost no one argues against.) Jayakumar’s axiom is both nuanced and simple. Razor sharp and remarkably general. The idea that we may be “playing God in someone else’s life” is immediately horrifying for those of us who strive to help others in any sort of capacity, and it’s easy (perhaps natural) to say, “I’m not ‘playing God’ I care about the people I serve”, dismissing the potential tort entirely.

I think, however, we all need to think about what we do and (more importantly) how we do it and ask, “Am I playing God?” Consider the following video of Financial Times journalist and former World Bank economist, Tim Harford:

“Mission Trip” Syllabus

Over the past month or so I’ve received several requests (or invitations) to support various upcoming “Mission Trips” (or voluntourism trips).  Some are weeklong trips over spring break and some are a couple weeks scheduled sometime in the summer months.

Without going on for too long about my opinion of Mission Trips I would like to affirm the clear motivation of all involved to do something to help those in need around the world. This feeling (or calling) to do something good for others is special; do not let anyone diminish it (including me). 

There has been tremendous work done by those trying to understand the impacts of short-term mission trips. Unfortunately there is a problem, very few people who make up the multi-million dollar short-term missions industry have access to (or are even aware of) these resources.

While the overall effect of Mission Trips remains ambiguous, it is clear that those who do the “going” are often the ones who receive the most salient positive benefit. So in an effort to amplify the learning of the “goers”, I present my Mission Trip Syllabus, which focuses on the benefit (or lack there of) to the “receivers”.

[A short disclaimer (and full disclosure) regarding my credentials: I have a bachelor’s degree in economics with a focus on international development from Calvin College. While in college I participated in and (twice) led three Service-Learning trips to Southern Louisiana. I also made two (once as a leader) microfinance and business-consulting trips to Panama. I have traveled to Mexico, South Korea, and spent a semester studying in Ghana. I am currently both a student and a research assistant at the Africa Theological Seminary in Kenya, where I am taking a course on missions and am researching the impacts of a church-based business development program. I also have plans to pursue a graduate degree in economics and development starting the fall of 2014.]

– Lesson 1: Paternalism –

Read two of the following:

When Helping Hurts” by Steve Corbett and Brian Fikkert

Toxic Charity” by Robert Lupton

To Hell with Good Intentions” by Ivan Illich

and

Listen to “Act One” of the following This American Life episode.

(End of high school level requirements)

– Lesson 2: Theological Foundations –

Read/watch two of the following:

Chapter 1 of “Walking with the Poor” by Bryant Myers

What is Justice” by Nicholas Wolterstorff 

Are Short Term Missions Good Stewardship?” A conversation between Kurt Ver Beek and Robert Priest in Christianity Today 

(End of college level requirements)

– Lesson 3: Poverty Alleviation and Development-

Read one of the following:

More Than Good Intentions” by Dean Karlan and Jacob Appel

Poor Economics” by Abhijit Banergee and Ester Duflo

and

Watch this TED Talk video by Ester Duflo on “Social Experiments to Fight Poverty“.

– Lesson 4: Human Behavior –

Read two of the following: 

Nudge” by Richard Thaler and Cass Sunstein

Thinking Fast and Slow” by Daniel Kanneman

Scarcity: Why having Too Little Means so Much” by Sendhil Mullainathan and Eldar Shafir

A Behavioral Economics View of Poverty” by Marianne Bertrand, Sendhil Mullainathan, and Eldar Shafir 

(End of trip leader requirements)

– Lesson 5: Perspectives (Extra Credit) –

Read one of the following: 

The rest of “Walking with the Poor” by Bryant Myers

Development as Freedom” by Amartya Sen

The White Man’s Burden” by Bill Easterly

The End of Poverty” by Jeff Sachs

The Great Escape” by Angus Deaton

The Bottom Billion” by Paul Collier

The Mystery of Capital” by Hernado De Soto

Dead Aid” by Dambisa Moyo

Portfolios of the Poor” by Collins, Morduch, Rutherford, Ruthven

Why Nations Fail” by Daron Acemonglu and James Robinson

Collapse” by Jarrod Diamond

Read Kurt Ver Beek’s essay “The Impact of Short Term Missions”. Integrating themes from Ver Beek write an essay on a topical area of interest (microfinance, education, orphanages, violence and sexual abuse, health, aid, NGOs, access to water, democracy, evangelism, inequality, etc.) and explain the influence or role mission teams have in this area.

I write this totally understanding the reality of the situation. No many (if any) will actually take up the assignments listed here. I can already hear the excuses and I (sort of) understand. “I just don’t have time” or “Well, this isn’t my full time job” or “How much more do you expect from me, I’m already volunteering to go on this trip”.

I’m wondering though if some of you will prove me wrong and actually read through some of the books and articles listed above. I am willing to act as your instructor, so email me your thoughts, questions, and challenges (bloem.jeff@gmail.com). I hope this enhances your mission trip experience. Perhaps it will be the most fun thing you’ll never do again.

I’ll end with a hypothetical a former professor liked to tell.

You are sitting in your house, surrounded by people who care for you and even love you. Suddenly you are stricken with splintering pain in your side. It becomes clear that you are in desperate need of an emergency appendectomy. A family member (who is not a medical doctor by any means) offers to perform the surgery right here right now on the dinning room table; giving the reasoning, “because, as family, we care about you more than anyone else on the planet”. Why do you dial 911 and take an ambulance to the hospital instead?

Can You Come Out and Play?

Soccer, or what it is more commonly known as, football, is the world’s most popular sport. This may, or may not, come to a surprise to those who live in the United States where there are many popular sports to play and to watch. The world enjoys football. The world understands football. That is why the following is so powerful.

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We’ll Thank Each Other Later

It has been a while since my last post. I’ve been busy with school, trying to find a job, and spending time with friends. But I had to break the hiatus to share some thoughts on this topic. Last week Calvin College Philosophy professor James K.A. Smith wrote a fascinating article entitled, “You’ll Thank Me Later”: Paternalism and the Common Good. I suggest you give it a read (you will thank me when you’re done … really). For those who think they know what’s best for themselves and ignore my suggestion here is a quick summary:

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Echad

I was recently asked to speak at faculty devotions held weekly at my former elementary, middle, and high school. I was asked by my mother who teaches first grade at Whitinsville Christian School, and who’s turn to prepare devotions was approaching. The assignment was rigged. Reflect on two passages from scripture: the year long theme verse, Romans 12:5, “…one body, many members…” and the theme verse for December, John 1:14, “The Word became flesh…”, AND share a couple stories from Ghana. Oh yea… there is about a ten minute time limit… The following is about what I said. 

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Christianity in Africa

This past weekend I visited the Akrofi-Christaller Institute of Theology, Mission, and Culture in Akropong, Ghana. This was the final part of the orientation for the semester in Ghana that I am participating in. It was refreshing to get away from the hustle and bustle of the city of Accra and spend some time preparing for the upcoming semester spiritually, physically, and socially.

While we were at the Institute we had the special privilege of hearing lectures from various faculty members of ACI informing us about issues of gospel and culture, language challenges with gospel and culture, encountering primal religions and finally, world Christianity. It was fascinating to hear from scholars in Theology who have been steeped in African culture for most of their lives.

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Destination as Journey

Watch this…

Did you catch it…

“… the journey is the destination.” The punch line of this comercial caught my attention. The comercial seems trivial at first (I mean lets face it, we ran out of creative ideas to sell cars about 10 years ago) but I realized this was scratching the surface of something very profound. Of course the comercial is about vacations and cars but, what if instead of thinking about vacation we thought about vocation?

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Thank God for Evolution

Here is a spoken word poem about slavery, genocide, and hope by Micah Bournes. Micah is a poet and signer from Southern California. He works mostly with the theme of Justice and how that fits in with theology. This video is very thought provoking and well done. In some places it is difficult to hear, so I took the time to transcribe the lyrics.

On a personal note, the slave fortress where most of this video takes place is one of the places I will visit while in Ghana next semester. It will be interesting to see where fellow humans were bought and sold and to contemplate the reality that we have not changed very much at all. But as Christians we can live renewed lives through faith in Christ.

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