Growth Effects of Religion Dependent Social Capital: An Empirical Evidence

There is an imperceptible laxity in literature in finding socio economic effects of social capital by integrating role of religion. However, international surveys data on religiosity concentrating on religious belief and practices, reveal the religion dependent behaviors of individuals of a society. Therefore, we include trust i.e., social capital as a product of religious sector instigating from individual towards community and state, named it as religion dependent social capital (RDSC). This study proposes a model to investigate relation of RDSC with economic growth based on some key propositions: RDSC is linked with freedom of religion and rule of law provided by the Government. (a) If individuals of the society have high fraction of beliefs B along with optimum practicing with level of trust T in the period t, then the optimal level of economic benefits in the period t are achieved. (b) Disequilibrium in amount of belief and practice lead to delayed convergence in achieving economic incentives. These propositions are validated by employing Markov process. USA being a religious economy achieve convergence in fewer iterations showing a positive and significant influence of RDSC on economic growth. Contrary with that China lacking in RDSC achieve convergence after 5 times more iteration than USA. Accordingly, the economic benefits of RDSC are more visible in a religious economy as compared to non-religious economy. A policy implications regarding improvement in reducing convergence period of economic growth for a society having lowest level of religiosity are also suggested.