LONDON — For decades, the standard story of economic growth has run on a tidy formula: invest in machinery, educate workers, build roads, and the numbers will follow. Religion was background noise. A new review from RFBerlin, published in May, argues that formula has been missing a central character.
The paper, written by economists Sascha Becker of the University of Warwick, Jared Rubin of Chapman University, and Ludger Woessmann of the University of Munich, pulls together decades of research to make a blunt case. Religious institutions did not just sit alongside economic development.
They helped build the scaffolding for it. Take education. The Protestant Reformation, driven by Martin Luther’s insistence that believers read the Bible themselves, triggered a wave of school-building across Protestant Europe.
By the 1800s, Protestant regions of Prussia had literacy rates far above their Catholic neighbors. That gap in reading and writing translated directly into a gap in economic output.
The study calls this a clear example of religion shaping the human capital that economists love to measure. The finding does not kill Max Weber’s old argument about a “Protestant work ethic.” It sidesteps it. Weber, writing in 1905, tied Protestant prosperity to a psychological shift — a drive to work hard and save.
The new research points instead to institutions: schools, financial rules, family structures, political systems. Religion, the authors argue, changed the rules of the game, not just the minds of the players. That distinction matters.
If religion operates through institutions, its effects are structural and long-lived. They do not fade when people stop believing.
The Catholic Church’s historic ban on usury, for instance, shaped European banking for centuries. Islamic financial principles continue to influence lending in the Middle East and parts of Asia. Protestant regions, by breaking from Rome, also broke from those constraints.
The paper is a review, not a single new dataset. It synthesizes studies from multiple fields — economic history, sociology, political science — that have often talked past each other.
The authors argue that conventional economics has treated religion as a cultural leftover, something to control for rather than to study. Their work suggests that ignoring religion means ignoring how norms around work, family size, and authority actually get built. Family size itself is a case in point.
Religious teachings on contraception and marriage directly affect fertility rates, which in turn affect labor supply, savings, and investment. Regions with high fertility and young populations face different economic pressures than those with low fertility and aging workforces. Those pressures do not come from nowhere.
The study lands at a moment when religion’s public role is contested in many wealthy countries. Secularization is real in Western Europe and parts of North America.
Yet globally, religious affiliation remains high, and in many developing economies, religious institutions are among the most trusted organizations. The paper implies that development policy that ignores this reality is building on incomplete maps. None of this means religion is a simple lever for growth.
The same institutions that built schools in Prussia also enforced hierarchies that limited economic participation for women and religious minorities. The paper is not an endorsement.
It is an argument for taking the force seriously. For economists trained to look at capital and technology, this is an uncomfortable addition. The RFBerlin review suggests the discomfort is overdue.
Religion, the authors conclude, affects growth not through individual piety alone, but by shaping the fundamental institutions and norms that govern society. That is a long way from a tidy formula. It is also closer to how the world actually works.
