religious freedom indexes, cultural dimensions and ...

RELIGIOUS FREEDOM INDEXES, CULTURAL DIMENSIONS AND WELFARE IN EUROPE Aurelian-Petruș Plopeanu, Tiberiu Brăilean, Mircea Arsene Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, Iași (ROMANIA) [email protected], [email protected], [email protected]

Abstract In this paper we aim to verify the existence of a relationship between GDP per capita, expressed in PPP, different religious freedom indexes and some of Hofstede cultural dimensions. The considered religious freedom indexes are Government Regulation of Religion Index (GRI), Social Regulation of Religion Index (SRI) and Government Favoritism of Religion Index (GFI). The Hofstede cultural dimensions used in the present study are Power Distance Index (PDI), Individualism versus collectivism Index (IDV) and Uncertainty avoidance Index (UAI). We analyse a sample of 26 European countries, the sample being observed by countries’ adherence to world major religions and confessions. We draw the profile of the countries by the major religious denominations (orthodox, catholic, protestant countries) based on cultural dimensions according to Hofstede’s studies. Then, we verify the hypothesis that countries recording high scores of religious freedom indexes (religious monopoly or highly regulated religion by the state) experience low levels of general wealth. Also, using multivariate statistical analysis, we verify the hypothesis that countries with a specific religious profile, with powerful regulation of religion are included in a certain way in the profile given by cultural dimensions of Hofstede. We aim to figure out if the mixed religious countries – “mix minorities” - (less than 50% for orthodox, catholic, protestant religious confessions) from our sample (Czech Republic, United Kingdom, Estonia, Germany, Switzerland and the Netherlands) are less regulated by the state, while these societies experienced high individualist profile, low distance to power and low to medium preference for avoiding uncertainty. Keywords: Religion, freedom, culture, wealth per capita.

1

INTRODUCTION

The complex effects of regulating religion are emphasized on a small number of papers and a low volume of data (Finke 1990, 1997; Finke and Stark 1992, 2005; Gill 1998; Iannaccone 1991; Iannaccone, Finke, and Stark 1997; North and Gwin 2004; Stark and Finke 2000, 2002; Yang 2006). [1]  The research has its starting point in the assumption that the religious ethics and dogmas and especially the socio-economic influence of religion institution, manifested in terms of religious freedom indexes, lead to specific national cultural differences with impact on human action and growth. Certain attitudes, behaviors, institutions, even economic systems developed through the cohabitation between religion and state, are extremely important to notice here. Geert Hofstede defines culture as a hierarchy of individuals’ preferences for two cultural goods wealth and power - in a human community. [2] A similar approach is conducted by Paul Fudulu (2009). In his theory, he rejects the Weberian model based only on absolute wealth as mega-good. Instead, a new model that adds a new direction, the second mega-good called the relative power, is the upgrade. “If culture and institutions are defined in terms of the same comprehensive mega-goods – absolute wealth and relative power, their inclusion to the core of economic theory of growth can be rather easily accomplished.” [3] Paul Fudulu (2009) considers the more the preference for absolute wealth is and less oriented to relative power, the more the process of economic growth is stimulated. In some human communities, where the power distance between societal strata is low (or a high preference for absolute power), we can see that the process of cooperation between individuals and institutions have positive impact towards society. Instead, in countries with high power distance, these interactions are not fruitful, the effects are considerably

Proceedings of EDULEARN12 Conference. 2nd-4th July 2012, Barcelona, Spain.

1875

ISBN: 978-84-695-3491-5

diminished. [4] Countries inclined towards power are not equally compatible with economic growth. For example, in Romania, it is considered that Christian-Orthodoxy encourages high levels of power [5], detrimental to wealth per capita. We can emphasize the idea that the process of economic growth is directly linked with religion in terms of ethical values’ encapsulation derived from its substance. When a religion describes values that encourage individuals towards the preeminence of relative power or high power distance in Hofstede’s terms, than the process of economic growth is weak. In general, it is considered that societies that record high civil liberties often tend to stress religious liberties. And those countries which experience high levels of religious freedom have greater economic liberty. More economic freedom is the road to prosperity. Competition between religious denominations creates the conditions for economic competition and growth.

2

DATA AND METHODOLOGY

For a sample of 26 European countries, which range from major Orthodox confession, Protestantism and Catholicism to “mix-minorities”, we observed a series of religious freedom indexes and national cultural dimensions for the analysis used in the scientific literature. These countries are Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland and United Kingdom. A macroeconomic dimension of growth [6], GDP per capita expressed in Purchasing Power Parity (current international dollars per capita), was taken from International Monetary Fund (IMF) database. The Hofstede’s national cultural dimensions are provided by author’s official website, while the latest religious freedom indexes are given by the Association of Religion Data Archives (ARDA) using Grim and Finke’s methodology.

2.1

Methodology

In order to study the relationship between GDP per capita (PPP) and indexes of religion freedom we have used the correlation analysis. [7] The correlation analysis is used to highlight the link between the intensity of considered variables. It is a measure of intensity of the connection between these kinds of variables. The statistical connections, depending on the type variables, can express either associations or correlations for numerical variables. Our correlation analysis was measured by Pearson correlation ratio. To identify the main determinants and mechanisms of our analysed process, we applied Principal Components Analysis (PCA) for summarizing the specific indicators. Its objective is to reduce a large set of variables to a small set containing the most information from the initial set, called main components. [8] PCA requires the identification of the main k components (factorial axes) which are linear and uncorrelated combinations of the original variables. Fk = a1kX1 + a2kX2 + … + apkXp , where Xj are the initial variables, with j = 1, p. These main components are designed to interpret the dependencies that exist between variables and to examine the links that can exist between individuals. [9]

2.2

National Cultural dimensions

According to Geert Hofstede, the cultural differences between regions and countries are analyzed using the national cultural dimensions scores. These values are given new perspectives about the interpretation of differences between countries. These values are grouped into five clusters which are called the dimensions of national culture. The content of the clusters of cultural dimensions is listed below, stating that we have used in our analysis only three cultural differentiation criteria: •

Power Distance (PDI);

•

Individualism versus Collectivism (IDV);

•

Uncertainty Avoidance (UAI).

The first cultural dimension, Power Distance (PDI), is defined as the extent to which members in society that have less power in the institutions and organizations, expect and accept that power is

1876

unevenly distributed. In other way, it is considered that PDI expresses also the dependence of relationships between individuals in a country. The hierarchy is not an obstacle between the subordinates and superiors, even when there is an important difference in education. In such societies, the hierarchical system is not a given, it is merely an organic adaptation and transformation depending external and internal circumstances. One of the most important characteristic of such societal cultures is that such hierarchies are as flat as possible due to a decentralized organization and a low degree of supervision. Also, a high level of trust between all involved actors is important. The interdependence between them causes each person to be important, it could be involved in decision-making policies, also narrow differences between the salaries in institutions and companies are expected. The second characteristic, Individualism versus Collectivism (IDV) is considered to be relevant in this case. Individualism is “the opposite of collectivism; together they form on the dimensions of national cultures. Individualism stands for a society in which the ties between individuals are loose: everyone is expected to look after himself or herself and his or her immediate family only.” [10] Collectivism “stands for a society in which people from birth onwards are integrated into strong cohesive in-groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty.” [11] The difference may be, in simplified form, between “I” and “We”. Uncertainty Avoidance (UAI) is the third cultural dimension we take into account in our analysis. Uncertainty is “the extent to which the members of a culture fell threatened by uncertain or unknown situations.” [12] This kind of ambiguity deals with the deficit that individuals tolerate unclear situations and real manifestations when there is a lack of formal rules. Different duties, internal and external rights, rules and regulations are created in order to avoid these situations and to place instead a high degree of certainty.

2.3

International indexes of religion freedom

The religious freedom indexes are Government Regulation of Religion Index (GRI), Social Regulation of Religion Index (SRI) and Government Favoritism of Religion Index (GFI). They measure the regulation of religion, the restrictions placed on religion by social and cultural forces beyond the state and the state’s subsidy policy. The Government Regulation of Religion Index (GRI) is the most present form of regulation, which is not derived only from the formal laws of one specific country. Grim and Finke (2006) define this index as “the restrictions placed on the practice, profession, or selection of religion by the official laws, policies, or administrative actions of the state.” [13] The second index is the Social Regulation of Religion Index (SRI) that defines “the restrictions placed on the practice, profession, or selection of religion by other religious groups, associations, or the culture at large.” [14] In this case, the barriers placed on religion are others than only the etatist laws, policies, and administrative measures. The third index, Government Favoritism of Religion Index (GFI), is composed by different “subsidies, privileges, support, or favorable sanctions provided by the state to a select religion or a small group of religions.” [15] This index covers many dimensions, like different constitutional privileges or special monetary subsidies that directly support the religious institutions.

3

STATISITICAL ANALYSIS. MAIN FINDINGS

In our case, for all 26 analysed countries, the value of Power Distance Index (PDI) ranges from the lowest level (11) to the highest one (104). The smaller the score is in different countries the more willing to work together and cooperate with each other between individuals inside institutions and organizations. The lowest scores for Power Distance Index are recorded for Austria (11), Denmark (18), Ireland (28), Norway and Sweden (31), Finland (33), Switzerland (34) and Germany, Czech Republic and United Kingdom (35). It is not a surprise that almost all are developed countries, with high standards of living and development. Also, some of them are majority Protestant (4) or Catholic (2). On the contrary, Slovakia (104), Russia (93) or Romania (90) record large levels of distance to power. It means that the relation between the layers of power structures is strictly ruled, regulated and dependent on the decisions coming from the top. Also, it stresses an institutional architecture which is highly centralized,

1877

even non-functional bureaucratic status. Inequalities in payment terms and societal positions are expected and considered even a given. In our study, the scores for Individualism versus collectivism Index (IDV) vary from the lowest (27) to the highest (89). The bigger the score is, the more individualistic society is considered. From this perspective, using Hofstede’s data for our panel of countries, individualistic cultures are considered the following: United Kingdom (the score is 89, the highest), the Netherlands (80), Hungary (80), Italy (76) or Belgium (75). The collectivist countries are especially Orthodox ones, like Bulgaria (30), Romania (30), Greece (35) and Russia (39), while one is Catholic, Portugal (27, the lowest score). The individualistic countries are considered to follow the features of a specific cultural model. The individual goals are the most important characteristic of the social framework, emphasizing on private success, while the preeminence of “I” instead of “We” is remarkable. Our panel of countries with low degree of uncertainty avoidance (Denmark – 23, Sweden – 29, United Kingdom and Ireland – 35) is open to rapid and structural changes and present no special anxiety about the future. Instead, the highest degree of UAI in countries like Greece (the score is 112, the highest in our panel), Portugal (104), Malta (96), Russia (95), Belgium (94), Poland (93) or Romania (90) maintain rigid codes of belief and ethics. In an extremely low degree, it is considered they are tolerant with unorthodox behaviour and ideas. We draw the profile of the countries by their major religious denominations (orthodox, protestant, catholic countries) based on cultural dimensions according to Hofstede’s studies. The fourth group includes those countries with no major religion, but with a mix of religious denominations (each with less than 50% in total population). In this case, we can include in this cluster the Czech Republic, Estonia, Germany, the Netherlands, United Kingdom and Switzerland. Among the four groups of countries defined according to the major religious denominations, the highest average scores for Power Distance Index (PDI) and Uncertainty Avoidance Index (UAI) are observed for the orthodox countries, while the countries with the lowest scores for these two dimensions are the protestant countries. The latter idea is consistent, from the point of view of the level of obedience to mundane power’s institution, with the hierarchy designed by Paul Fudulu (2009). [16] Although, the Orthodox countries in East Europe and Balkan region which experienced historical links to the Ottoman empire, the Russian influence and many decades of communism, offer an explanation about their high power distance and bureaucratic hierarchy and low religion freedom. Regarding the Individualism versus collectivism Index, the protestant countries and those with different religious minorities have the highest average score, while the orthodox ones record the lowest average score. Using also empirical evidence, Gorodnichenko and Roland (2010) stress that individualist based countries, compared with the collectivist cultural ones, develop more innovation and higher levels of total factor productivity (TFP), conducting on the long-run term to higher economic growth rates. [17] The results obtained through ANOVA show significant differences among the four groups of countries according to the cultural dimensions (see Fig. 1): -

For Power Distance Index (PDI), there are significant differences between the orthodox and protestant groups, also between the orthodox and “mix-minorities”;

-

For Individualism versus Collectivism Index (IDV), there are important differences between the orthodox and each of other three groups of countries;

-

For Uncertainty Avoidance Index (UAI), there are significant differences between the protestant countries and the catholic ones, as well as between protestant and orthodox countries; there are also differences between orthodox countries and “mix-minorities” cluster.

1878

Fig. 1. The distribution of Hofstede’s cultural dimensions by main religion Source: Authors’ calculation using SPSS. Table 1. The average scores for Hofstede’s cultural dimensions

Source: Authors’ calculation using SPSS Then, we verify the hypothesis that countries recording high scores of religious freedom indexes (religious monopoly or highly regulated religion by the state) experience low levels of wealth. Two religious freedom indexes, Government Regulation of Religion Index (GRI) and Social Regulation of Religion Index (SRI), are negatively correlated with GDP per capita (PPP), the correlation being significant at 0.05 level. Therefore, countries with low GDP per capita (PPP) will record high values for Government Regulation of Religion Index (GRI) and Social Regulation of Religion Index (SRI). In other words, low levels of religious freedom or highly regulated religious sphere by the state are compatible with low rates of wealth per capita. The religious market model emphasizes the effects of competition as well as of the way government interacts with religious institution. It is considered that a strong competition between religious denominations leads to a fruitful religious market structure. The greater the diversity of religious confessions, the greater the existing competition, the result stresses a greater interaction between them in a competitive markets. In terms of Adam Smith, the markets monopolized by established churches and government regulation lead to a low degree of religious freedom. The effect conducts to a reduced competition and lower church participation. In Table 2 we have presented the correlations between GDP per capita (PPP) and each religion freedom indexes (GRI, SRI and GFI). The Pearson’s r for the correlation between the GDP per capita (PPP) and GRI and SRI is -0.426, repectively -0.396. These values mean that when wealth per capita increases (our first variable), the level of the two variables regarding religion freedom decreases. In

1879

the case of the correlation between GDP per capita (PPP) and GFI index we consider that there is a weak relationship between these two variables (Pearson correlation is 0.075, close to zero). Table 2. Correlations between GDP per capita (PPP) and GRI, SRI and GFI

Source: Authors’ calculation using SPSS. Because the Sig value for GFI Index (0.717) is greater than 0.05, we can conclude that that there is no statistically significant correlation between these variables. That is why, in fig. 2, we draw only the significant relationship between GDP per capita (PPP) and GRI and SRI. It is highly reccommended to stress that the orthodox group of countries (Bulgaria, Romania, Greece and Russia) records high levels of state regulation in religious sphere and low prosperity per capita.

(a)

(b)

Fig. 2. The relationship between GDP per capita and GRI (a) and SRI (b) Source: Authors’ calculation using SPSS. Also, using multivariate statistical analysis, we verify the hypothesis that countries with a specific religious profile, with powerful regulation of religion are included in a certain way in the profile given by cultural dimensions of Hofstede. We apply principal component analysis (PCA) in order to synthesize the information of our six indicators. Using PCA method, our six analysed variables were grouped in two main components, which explain 71.8% from the original variables’ variation. The correlations between these two components and the observed indicators gave us important information about the components’ significance.

1880

Table 3. Rotated Component Matrix

  Source: Authors’ calculation using SPSS. The first component shows a strong positive correlation with Government Favoritism of Religion Index (GFI) and Uncertainty Avoidance Index (UAI), while a negative one with Individualism Index (IDV). The second component stresses a strong positive correlation with Government Regulation of Religion Index (GRI) and Social Regulation of Religion Index (SRI). Our analysed countries are represented on the factorial map of the two principal components (see Fig. 3), thus allowing to identify clusters of countries according to our criteria. The distribution of European countries based on scores for the two main components is presented in clusters of countries differentiated by religion. The first component and the second component distinguish, in particular, between Orthodox states (quadrant I) and Protestant countries (quadrant III). For the first component, called the regulation dimension between religion and state 1, the orthodox group of countries has high values for uncertainty avoidance index(UAI) or high values for uncertain or unknown situations. Also, this group shows low levels for individualism. In contrast, the protestant and “mix-minorities” countries record low UAI and high levels for Individualist behaviours. It is worth noticed that the profile of catholic group is characterized by low homogeneity from the first component perspective. The second component, the regulation dimension between religion and state 2 is interesting. From this point of view, the behaviour between orthodox and several catholic countries (Ireland, Luxembourg, Malta, Portugal) is very different.

Fig. 3. Distribution of countries according to major religious denomination Source: Authors’ calculation using SPSS.

1881

4

CONCLUSION

The architecture of religion institutions, the interactions with the state, their relationships and everyday practices communicate, in explicit or implicit modes, expectations that express underlying national cultural dimensions. Societal adaptation to historical transformations, long-run or short-run religion institutions actions, increasing wealth and other fundamental factors leads to specific and national cultural values. We can emphasize the idea that the process of economic growth is directly linked with religion in terms of freedom. Competition between religious denominations creates the conditions for economic competition and growth. When a religion describes values that encourage individuals towards the preeminence of relative power or high power distance in Hofstede’s terms, than the process of economic growth is weak. Also, high individualist profile and low preference for avoiding uncertainty are other dimensions that stimulate the process of economic development. In general, it is considered that societies that record high civil liberties often tend to stress religious liberties. And those countries which experience high levels of religious freedom have greater economic liberty. And more economic freedom is the road to prosperity.

ACKNOWLEDGEMENTS This paper was written with financial support from the project POSDRU/89/1.5/S/49944 – ‘Dezvoltarea capacitătii de inovare si cresterea impactului cercetării prin programe post-doctorale’ (Developing the Innovation Capacity and Improving the Impact of Research through Post-doctoral Programmes), funded through Programul Opera ional Sectorial Dezvoltarea Resurselor Umane (Human Resources Development Operational Programme), in affiliation with “Alexandru Ioan Cuza” University of Iasi.

REFERENCES [1]

Grim, B., Finke, R. (2006). International Religion Indexes: Government Regulation, Government Favoritism and Social Regulation of Religion, Interdisciplinary Journal of Research on Religion 2(1), p. 3.

[2]

Hofstede, G. (1996). Multicultural management structures, University Publishing House, Bucharest.

[3]

Fudulu, P. (2003). The Weak Institutions Syndrome As The Effect Of The Cultural-Institutional Gap, http://www.indiana.edu/~workshop/papers/fudulu_041703.pdf, p. 2.

[4]

Fudulu, P. (2009). Compatibility with the economic performance of major religions. A decryption economic dogma, University Publishing House, Bucharest, pp. 25-26.

[5]

Fudulu, P. (2007). The economic theory of culture and institutions, University Publishing House, Bucharest, p. 187.

[6]

Barro, R., Sala-i-Martin, X. (2003). Economic Growth, Second edition, The MIT Press.

[7]

Jaba, E. (2002). Statistics. 3rd edition, Economic Publishing House, Bucharest.

[8]

Escofier, B., Pages, J.(1998). Analyses factorielles simple et multiples, Dunod.

[9]

Timm, N. (2002). Applied Multivariate Analysis, Springer text in Statistics, p. 446.

[10]

Hofstede, G. (1994). Cultures and Organizations, Software of the Mind: Intercultural Cooperation and its Importance for Survival, London: HarperCollins, p. 261.

[11]


[12]


[13]

Grim, B., Finke, R. (2006). International Religion Indexes: Government Regulation, Government Favoritism, and Social Regulation of Religion, Interdisciplinary Journal of Research on Religion 2(1), p. 7.

[14]

Grim, B., Finke, R. (2006). International Religion Indexes: Government Regulation, Government Favoritism, and Social Regulation of Religion, Interdisciplinary Journal of Research on Religion 2(1), p. 8;

1882

[15]

Grim, B., Finke, R. (2006). International Religion Indexes: Government Regulation, Government Favoritism, and Social Regulation of Religion, Interdisciplinary Journal of Research on Religion 2(1), p. 8.

[16]

Fudulu, P. (2009). Compatibility with the economic performance of major religions. A decryption economic dogma, University Publishing House, Bucharest, p. 139.

[17]

Gorodnichenko, Y., Roland, G. (2010), Culture, Institutions and the Wealth of Nations, NBER Working Paper No. 16368, http://www.nber.org/papers/w16368.pdf.

1883