Religion has, for a long time, played a crucial role in the development of laws, public policies and the demographics of people around the world. It involves several dimensions such as commitment to the religion, participation in religious related activities, and the strength of their religious beliefs. The influence can be evaluated individually or as a congregation. It is through the same influence of religious practices, beliefs, and morals that shapes the economic behaviors of the congregation. Religious politics, for instance, played a role at the end of slavery which directly affected the economic activities of plantation owners in the affected territories. Religion can be likened to a culture which is a collective programming of people’s values and how they perform their duties as a group.
Religious activities can also affect the market forces of supply and demand of commodities driven by the faith-based politics and religious traditions that either support certain commodities, movement of people. The cost of commitment paid by a congregation. The centralized leadership of any religious group has the power to cause a social revolution through collective actions in realizing the religious goals. Economic growth is the ultimate target when shaping the economic behavior. There are numerous non-material items that shape the consumption and production behavior of people such as education, poverty alienation, and charity.
There are several ways in which religion can influence the society. This The first is through religious activities done by the congregants such as church attendance. Such meetings can be equated to other fundamental social gatherings such as political parties and club meetings. It is in such meetings that useful networks that could be utilized in conducting economic activities are established. These networks can be as big as international trading relations from people sharing the same religion. This is a stimulant to economic growth. On the contrary, religious meetings cost time which can be used to develop other economic activities. This leads to a reduced economic output from the congregation.
The second way is through the influence brought about by the adherent values and moral obligations that shape the society’s behaviors and way of life. Different religions have different views of good and evil. These values have shaped various historical events and institutionalized structures including the debate over slavery and the civil war. The dominance of a single religion in a country will also result in a rise in economic activities favored by the values of the religion while depressing those not favored. Also, religious affiliations are salient and activate neural connections in individuals dealing with a variety of things in a way that they are not conscious with.
Religious leaders are also significantly positioned in the society with powerful influence towards a change of attitude in the economic growth. Scriptures in holy books are used to define many modern days situations through which the clergy use to criticize various government activities and policies such as over taxation and exploitation of the poor or the capitalistic nature of exploitation of the employees to maximize on profits. Politics and religion are mutually exclusive with both developing an economy of hatred towards particular aspects and attitudes of life. Notably, religion emphasizes on hell, heaven and an afterlife which tend to increase people’s productivity. This is by building on the culture of capitalism by fostering positive individual traits such as work ethics, honesty, hard work, and thrift. The reinforcement of this character traits can act as compensators of other religious rewards such as the afterlife. Therefore, congregants are more motivated to cultivate virtuous behaviors such as donations to charity which is achievable if one works hard enough and earn enough economical merit.
Religion can be considered as a source of social capital. This is through the steering different faith-based programs which bring about the socioeconomic view of religious activities. Taking a look at the market forces, religion influences the rational choice of commodities by consumers. The structure of religious organizations creates a focus on the supply force brought about by the goods produced by such organizations. On the other hand, the demand force is influenced by the preferences of religious economies by believers.
Salient religious forces and externalities also contribute to individual’s social welfare and social behaviors. This can be through the change of people’s environment of operation directly affecting the utility of goods and choices. As a social capital, religion can be expounded in the aspects of a social network, development, and adherence to social norms and the placement of sanctions from the deviation from set norms. Judaism, for instance, highly emphasized on education to both the men and women. The greater percent of educated women, in turn, led to lower fertility rates and hence smaller families. The smaller the family was, the more the parental investment on the children’s needs and education which in the long last meant a better human capital force. On the contrary, some religions insist on increased investment in education. There is a greater incentive to the congregants willing to invest more in education. However, if economically analyzed this has a low rate of return because of the diminishing marginal returns to the invested money.
There are various macro and micro-economic consequences brought about by religion that affect production and output. They include; the utilization of technology and human capital. Religion impacts positively on the human capital and especially to the less developed and developing countries through education. Some religions are also keen on health matters as a way of improving the human capital. some even go to an extra step to offer health insurances. Historically, some health policies and debates have been influenced by religious entities such the case of abortion. Such factors make religion a center of concern in economic development.
Religious entities also bring about a collective action from the followers of the religion. Collective action is a set of behaviors engaged in by a significantly large number of people. This often happens as a result of influence. Such behavior can be spontaneous, relatively unstructured or organized. Some religion’s collective behavior is, however, more spontaneous and unstructured or planed than others. Focusing of the Islamic and Judaism religion, their way of eradicating poverty among themselves can be a great boost to a country’s economy such as the emergence of Islamic banks that are keen on financing and regulating interest rates for their people. The Islamic religion can be seen as less spontaneous and structured and, in most cases, it is organized with the state. This can also apply to the contrary through market restrictions for access to credit and insurance. The collective action can also translate to transformative power in apolitical context. For instance, a religion can start an economic revolution or movement against a government based on their economic ideologies. Religion can also offer a rigid voting block and mobilization to a political party based on the economic strategies the party is offering to the people.
The time spent in religious gathering also plays a major role in the economic growth. While a certain amount of time spent in church is positive, excessive time spent in religious activities negatively affect economic growth. Many developed countries show a low religious attendance but a high level of beliefs. Religious affiliations also have a number of interrelated economic decisions made in a person’s life cycle. For instance, in cases of married couples, their engagement and household activities are greatly influenced by their religious affiliations. Certain religious events and the adherence to the different religion’s calendars such as the Islamic Ramadhan cause disruptions in the economic flow of activities in any specific locality that is densely populated by Muslims. Longer fasting periods reduces economic output while also causing a reduction in the productivity of labor. Labor supply choices brought about by religious occupational preferences negatively implicate the economic performance of a country too.
Political religion is a large, coordinated and mobilized institution cannot be ignored when assessing the large-scale fundamental change brought about by entrepreneurship. There is a link between evangelical activities and entrepreneurship. Religious expressions of different affiliations offer support to specific businesses while demeaning others. Given the collective actions related to religion, there is a cost of commitment to entrepreneurs affiliated with the religion. This is by either being discouraged against certain investments or motivation towards certain ventures with equal measure in a bid to realizing the faith-based goals. While this can, in a larger scale context lead to stagnated economic growth or alternatively boos the economy of a specific location.
Affiliations to religious institutions also help individuals to insure themselves from idiosyncratic income shocks and vulnerability as compared to non-religious people or households. This is similar to the overall subjective well-being of people who attend religious services which fluctuates less than those who are not affiliated with any religious institution. Various religions have different incentives for enhancing work efforts and the accumulation of wealth hence contributing to economic success. To some, there is an emphasis on mutual aid and charity in order to ensure the survival of the community and lower the uncertainties of life. Religions that believe more in divine punishments are more likely to give donations too.
Conclusion
The collective action of religious institutions is heterogeneous and encompasses various aspects affecting the social phenomena of economics. Religious politics is a fundamental tool in major transformations as evidenced by the slavery debate and their role in the civil war. Economically, demand is more likely to be shifted by faith-based decisions either from a decentralized perspective or a centralized one. The adherence to religious teachings also enhances the development of important behavioral traits such as hard work, honesty, work ethics and thrift which to a great extent boost the economic production. The belief of charity and generosity in giving donations has two effects. One is by assisting the economically vulnerable back on their feet as well as boosting the demand forces when purchasing the donations. This can also be termed as the cost of commitment. There is also an inclination in the choice preferences of work and also preferred businesses or products championed by a particular religion. Finally, some religions practice business which is a great support to the followers such as the Islamic banks.
