AN ECONOMIC PERSPECTIVE ON RELIGION

A religious group is a group of individuals who share similar beliefs about punishments inflicted by the supernatural when they behave selfishly, and who, by participating in certain costly and observable actions – such as joint rituals – can identify one another. This allows them to both behave more cooperatively towards group members while guarding themselves from non-members who may wish to exploit them.

This is how research by economists Dr Gilat Levy and Dr Ronny Razin describes the nature of religion. Their new study then goes on to examine the properties of such religious organisations – in particular, how they behave towards other religious groups, and how religious entrepreneurs initiate organisations and compete to attract followers.

Religion has fascinated scientists for hundreds of years. Anthropological theories of totem and taboos, sociological theories such as functionalism, evolutionary theories of optimal adaptation or biological investigations of the ‘religious mind’, are just notable examples of the many attempts to understand the origin of religion as well as its prominent existence in essentially every human society.

More recently, scientists have focused on trying to understand whether there is a link between the two most observed aspects of religion, the individual aspect and the social aspect:

  • The individual aspect is usually referred to as beliefs of the individual about the power or abilities of some supernatural entity.
  • The social aspect refers to the observations that most religious rituals are conducted by the collective and not by individuals, and that most religions prescribe how to behave in social interactions.

The objective of this research is to use the tools of economics to study the link between the individual and social aspect. The connection between these two observed attributes of religion is not immediate. If individuals believe in supernatural beings, why do they often celebrate their beliefs in a social gathering? Why do these beliefs in supernatural entities also dictate how human beings should interact with one another?

According to the view of these researchers, religion allows groups of people to achieve more desirable social outcomes as it changes the way individuals behave towards one another. Their main premise is that individuals have different beliefs about the consequences of their actions; for example, some might fear a punishment inflicted by a supernatural entity if they behave selfishly towards others.

Balancing the fear of such punishment and that of exploitation by other humans, these individuals might be willing to behave cooperatively if they know that others will reciprocate. Thus, these individuals would benefit from an institution that would allow them to distinguish which society members share their beliefs about such punishments. Such an institution can increase the overall level of cooperation in society.

A religious group is therefore a group of individuals who share similar beliefs about punishments inflicted by the supernatural when they behave selfishly, and who, by participating in certain costly and observable actions (such as joint rituals) can identify one another.

This allows them to both behave more cooperatively towards group members while guarding themselves from non-members who may wish to exploit them. Thus, religion provides a link between individual beliefs, social rituals and group cohesion.

The research then examines the properties of such religious organisations. Since a market for religion is created, as individuals need to identify one another, it is possible to determine the characteristics of the different religious groups that coexist in equilibrium. For example, to guarantee membership in the group, some groups may demand a higher level of participation in rituals then others and thus may include fewer members.

It is also possible to determine how different religious groups or sects behave towards one another, that is, whether members of one group who cooperate with one another also cooperate with members of other organised groups.

In addition, since individual beliefs may evolve over time (for example, when they observe events that they interpret as a punishment for a selfish behaviour), it is possible analyse how the characteristics of these groups evolve as well.

Finally, the theory can also incorporate the supply side of the market for religion; specifically, the researchers assume that religious entrepreneurs initiate religious organisations and compete to attract followers. Religious leaders tend to be very powerful at directing the actions of their followers. The theory then makes it possible to explore the scope of the power of religious leaders.

ENDS

Notes for editors: ‘Religious Organisation’ by Gilat Levy and Ronny Razin was presented at the Royal Economic Society’s 2007 Annual Conference at the University of Warwick, 11-13 April.

The authors are at the London School of Economics.

For further information: contact Romesh Vaitilingam on 07768-661095 (email: ); or Ronny Razin: