Religious freedom is one of only three factors significantly associated with global economic growth, according to a study by researchers at Georgetown University and Brigham Young University. The study looked at GDP growth for 173 countries in 2011 and controlled for two-dozen different financial, social and regulatory influences.
As the world navigates away from years of poor economic performance, religious freedom may be an unrecognized asset to economic recovery and growth, according to this new study. The study examines and finds a positive relationship between religious freedom and 10 of the 12 pillars of global competitiveness, as measured by the World Economic Forum’s Global Competitiveness Index (see example in chart).
The study, however, goes beyond simple correlations by empirically testing and finding the tandem effects of government restrictions on religion and social hostilities involving religion (as measured by the Pew Research Center) to be detrimental to economic growth while controlling for 23 other theoretical, economic, political, social and demographic factors.
The new study also furthers previous work in the field, including The Price of Freedom Denied, by Brian Grim & Roger Finke. Grim and Finke's research showed that religious freedom is a key ingredient to peace and stability, as measured by the absence of violent religious persecution and conflict. This is particularly important for business because where stability exists, there is more opportunity to invest and conduct normal and predictable business operations, especially in emerging and new markets.
The new study observes that religious hostilities and restrictions create climates that can drive away local and foreign investment, undermine sustainable development, and disrupt huge sectors of economies. Such has occurred in the ongoing cycle of religious regulation and hostilities in Egypt, which has adversely affected the tourism industry, among other sectors. Perhaps most significant for future economic growth, the study notes that young entrepreneurs are pushed to take their talents elsewhere due to the instability associated with high and rising religious restrictions and hostilities.
Religious freedom when respected within a company can also directly benefit the bottom line. This includes both improved morale and lower costs. For instance, the clothing retailer Abercrombie & Fitch fought and lost a religious discrimination case in 2013 related to firing a Muslim stock girl for wearing a scarf in violation of the company’s dress code. The case resulted not only in substantial legal costs but also in negative national publicity.
Moreover, freedom of religion or belief is a human right protected in numerous treaties and agreements, including the UN’s Universal Declaration of Human Rights. The study suggests that businesses may gain a competitive advantage by meeting the expectations of stakeholders who are increasingly demanding that companies play a positive role in addressing issues of social concern and fairness.
The study's findings are timely given the rising tide of restrictions on religious freedom documented by Pew Research, showing that 76 percent of the world's people currently live with high religious restrictions or hostilities. And the findings are especially relevant because the research shows that the largest markets for potential growth are in countries where religious freedom is highly restricted–casting a question mark over the long-term sustainability of growth in countries such as China.
NOTE: The full report, “Is Religious Freedom Good for Business?: A Conceptual and Empirical Analysis,” is available at the Interdisciplinary Journal of Research on Religion (IJRR). The authors of the study are Brian J. Grim, Georgetown University's Berkley Center for Religion, Peace & World Affairs, and Greg Clark and Robert Edward Snyder, Brigham Young University's International Center for Law and Religion Studies.
The article was orginally published here.