RELIGION, CULTURE, AND ECONOMIC PERFORMANCE Marcus Noland Senior Fellow Institute for International Economics Abstract The hypothesis that the coefficients on variables of religious affiliation are jointly equal to zero can frequently be rejected at conventional levels of statistical significance (i.e., religion matters), but no robust relationship between adherence to major world religions and national economic performance is uncovered, using both cross-national and subnational data. The results with respect to Islam do not support the notion that it is inimical to growth. On the contrary, virtually every statistically significant coefficient on Muslim population shares reported in this paper—in both cross-country and within-country statistical analyses—is positive. If anything, Islam promotes growth. JEL codes: O40, Z12 Keywords: economic growth, convergence, religion, Islam, India, Malaysia, Ghana Author’s note: I would like to thank Scott Holladay, Paul Karner, and Josh Catlin for essential research assistance. Fred Bergsten, Jari Eloranta, Howard Pack, Dave Richardson, and seminar participants at the Korea Development Institute, the East Asia Economics Association meeting in Kuala Lumpur, Middle East Technical University, and the Institute for International Economics offered helpful comments on an earlier draft. Email address:
[email protected] INTRODUCTION Abundant evidence affirms that religious belief affects a wide range of behavioral outcomes (Iannaccone 1998), and religious activity can affect economic performance at the level