Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/45807 
Year of Publication: 
2011
Series/Report no.: 
ZEW Discussion Papers No. 11-038
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
Religion is increasingly acknowledged to be a cultural dimension which affects economic outcomes in different regards. This contribution focuses on religion's possible impact on the shadow economy. Different dimensions of the religious markets are taken into account. These dimensions refer to the overall degree of religiosity, the specific impact of different religions, religious competition or the proximity between religion and the state. The empirical test makes use of the largest available cross-section on the size of the shadow economy and matches this dataset with numerous religious indicators. Summary measures of general religiosity or indicators of religious competition do not have a measurable impact. However, robust differences emerge across religions. Countries dominated by Islam or Eastern religions are associated with smaller shadow economies compared to Christian countries. Furthermore, the proximity between state and religion matters. Close ties between both are typical for smaller shadow economies. This is in line with the view that religion uses its normative influence to protect state interests if there is a mutually beneficial relationship.
Subjects: 
Economics of religion
tax morale
shadow economy
JEL: 
O17
O57
Z12
H26
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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