Behavior, religion, and socio-economic development: a synthesized theoretical framework

The relationship between religion and economic performance has been a topic of debate since Adam Smith and Max Weber. While Smith highlighted the economic aspects of religious organizations, Weber's Protestant Ethic focused on the impact of religious beliefs on the rise of capitalism. However, most existing literature examining this relationship suffers from theoretical shortcomings. It fails to differentiate between religion itself and the behavior of its constituents, often focusing narrowly on economic well-being and struggling with endogeneity issues. This paper aims to address these limitations by proposing a new framework that allows for a more comprehensive and nuanced analysis of how religion influences socio-economic development. The framework will adopt a causal research design to investigate the relationship between religion, behavior, and development, going beyond previous limitations by considering both quantitative and qualitative methodologies.

Existing research on the relationship between religion and economic well-being largely stems from Weber's work. Studies fall into three categories: those examining Weber's thesis, those testing its validity, and those applying it to test the religion-economy link. Studies like Barro and McCleary (2003) found negative associations between certain religions and income growth. Guiso et al. (2003) linked religious beliefs to economic attitudes. Alesina et al. (2003) and Sala-i-Martin et al. (2004) investigated the role of religious fractionalization in economic growth, yielding mixed results. Noland (2005) found that religion matters, but lacked a robust pattern for specific religions. Kuran (2018) and Karaçuka (2018) argued that institutional factors, rather than Islam itself, primarily explain underdevelopment in Muslim countries. Pryor (2007) found Islam's influence to be minimal, while Platteau (2008) critiqued the limitations of cross-country studies, advocating for a historical approach. Hoffmann (2013) and Basedau et al. (2018) surveyed the existing literature, highlighting methodological flaws such as the use of population shares as a proxy for religious influence and the lack of comparability across religious groups. Mgaloblishvili (2018) studied the disparity between Georgia and Estonia, linking economic differences to religious factors. Essien (2021) pointed out the lack of a theoretical core in many studies. The author highlights the limitations of existing studies, such as the failure to distinguish between religion and the behavior of its followers, the narrow focus on economic well-being, and the endogeneity problem.

To overcome limitations in existing frameworks, this study employs a causal research design, focusing on asymmetrical causal relationships between religion, behavior, and development. The synthesized theoretical framework combines four theories: Max Weber's Protestant Ethic, Adam Smith's Theory of Moral Sentiments, Ibn Khaldun's Theory of Development, and a religion-specific theory (Maqasid of Shariah for Islam). The methodology utilizes both inductive and deductive approaches. Inductively, a composite index is created, operationalizing concepts from religious frameworks and Smith's 'worthless fellow' to quantify development-hindering behaviors. Deductively, content and keyword analysis of religious texts identifies teachings that promote or deter such behaviors. This dual approach aims to differentiate between religious doctrine and the actions of its followers, addressing the endogeneity problem. The Maqasid of Shariah, focusing on the prevention of 'Mafsada' (harm), is used to identify proxies for development-hindering behaviors, complemented by evidence from the Quran and Hadith. Ibn Khaldun's theory offers a broader perspective on the multi-dimensional factors influencing development. Adam Smith's concept of the 'worthless fellow' provides a framework for measuring adherence to principles promoting societal well-being. The combination of these quantitative and qualitative approaches produces a more comprehensive and nuanced understanding of the complex interplay between religion, behavior, and development.

The study doesn't present empirical findings as no data was generated or analyzed. The core contribution is the proposed framework itself. The framework suggests that the impact of religion on development isn't solely determined by religious affiliation or doctrine, but also significantly influenced by the behavior of religious adherents. The Maqasid of Shariah, operationalized through a composite index measuring ‘Mafsada’ (public harm), is proposed as a more accurate gauge of how religious principles manifest in societal behavior. The framework further integrates Ibn Khaldun’s Theory of Development, adding contextual depth to understanding the various internal and external factors at play in societal development. The ‘worthless fellow’ concept from Adam Smith’s Theory of Moral Sentiments allows for a quantitative measure of development-hindering behaviors, thereby helping to separate religious doctrine from the actual behavior of individuals. The tables presented in the paper illustrate how specific proxies for development-hindering behaviors are linked to the Maqasid of Shariah and supported by religious texts, suggesting a potential mechanism to study the influence of religion on societal development.

The synthesized framework addresses significant gaps in existing research by explicitly incorporating the crucial role of behavior. This helps to disentangle the complex relationship between religion and development, accounting for potential discrepancies between religious teachings and the actual practices of individuals. The framework’s multi-disciplinary approach provides a more holistic and nuanced understanding of socio-economic development, moving beyond simplistic correlations between religious affiliation and economic indicators. By combining quantitative and qualitative methods, the framework offers a more rigorous and robust approach to studying the complex interplay between religion, behavior, and development. The framework also suggests avenues for future research to test its propositions empirically.

This paper presents a novel synthesized framework that offers a more comprehensive and nuanced approach to understanding the influence of religion on socio-economic development. It bridges the gap between religion and behavior, incorporating both doctrinal analysis and behavioral measures to address the long-standing endogeneity problem. The framework suggests that behavioral factors are crucial in mediating the relationship between religion and development, offering a more complex and holistic understanding than previous models. Future research can now test the proposed framework empirically, applying it to various religious contexts and further refining its operationalization.

The paper's primary limitation is the absence of empirical testing. The framework is a theoretical contribution, and its validity and effectiveness need to be evaluated through future empirical studies. The selection of proxies for the composite index, while theoretically grounded, may also be subject to debate and require further refinement based on empirical data. Additionally, the framework's applicability might vary across different religious contexts, requiring adaptations and adjustments for specific cultural and historical settings.