Socioeconomic Impact of Religious Freedom

Social dynamics are complex and causal mechanism are multifaceted, and religious freedom is not a silver bullet or secret solution to the world’s ills. Nevertheless, the role of religious freedom – and its manifestations in interfaith and intercultural understanding and cooperation – are often overlooked contributors to positive socio-economic outcomes and sustainable development.

Article 18 of the Universal Declaration of Human Rights defines Freedom of Religion or Belief (FoRB) as follows: “Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship and observance.”

So, what might be the impact of freedom of religion or belief (FoRB) on society, business and the economy? The following research summary indicates that religious freedom contributes to human flourishing and sustainable development – and their underlying socioeconomic foundations – in at least seven ways:

(1) Fosters respect for differing faiths and beliefs, including people with no particular faith

First, religious freedom fosters respect by protecting something that more than eight-in-ten people worldwide, 84 percent according to a recent Pew Research study, identify with a religious faith – and this figure is growing. Indeed, according to a 2015 global study published in Demographic Research, social scientists were wrong to predict the demise of religion. The study and its related Pew Research Center report show that people who are religiously unaffiliated (including self-identifying atheists, agnostics and those who say their religion is “nothing in particular”) will drop to 13% of the world’s population in 2050, down from 16% in 2010. These are both significantly lower than the peak in the 1970s under communism when nearly one-in-five people were religiously unaffiliated.

(2) Helps to reduce corruption by allowing faith-based ethics to be voiced

Second, religious freedom reduces corruption, one of the key ingredients of sustainable economic development. For instance, research finds that laws and practices burdening religion are related to higher levels of corruption. This is borne out by simple comparison between the Pew Research Center’s 2011 Government Restrictions on Religion Index with the 2011 Corruption Perceptions Index. Eight of the ten most corrupt countries have high or very high governmental restrictions on religious liberty.

Religious freedom also implies that business people can draw on religious values and moral teachings in their businesses. The attempt to force businesses to act as secular, neutral, value-free organizations may be one contributing factor to the corruption, greed and short-sighted decisions that lead to the global economic collapse of 2008 that still affects many people and nations today. Allowing religion to inform business ethnics certainly is an underused activity implied by religious freedom.

Research spotlight: The Weekly Number. Governments with very high levels of restrictions on religious freedom also have higher levels of corruption (median of 7.1 on a 10-point scale) compared with countries with low restrictions on religious freedom (5.3).

While this does not establish a causal link between religious freedom and lower corruption, it does suggest that religious freedom may one of the contributing factors to a less corrupt society.

This connection may be seen in countries such as China that simultaneously try to crack down on corruption as well as those who fight for freedom, including freedom from corruption.

(3) Engendering peace by defusing religious tensions thereby reducing religion-related violence and conflict

Third, research clearly demonstrates that religious freedom engenders peace by reducing religion-related violence and conflict. Conversely, when religious freedom is not respected and protected, the result is often violence and conflicts that disrupt normal economic activities. 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 regulations and hostilities in Egypt, which has adversely impacted the tourism industry.

More generally, religious freedom is a key ingredient to peace and stability, which 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.

Research Spotlight: The Price of Freedom Denies: Religious Persecution and Conflict in the 21st Century (Brian Grim & Roger Finke, 2011, Cambridge University Press). The Price of Freedom Denied shows that, contrary to popular opinion, ensuring religious freedom for all reduces violent religious persecution and conflict. Others have suggested that restrictions on religion are necessary to maintain order or preserve a peaceful religious homogeneity.

Brian J. Grim and Roger Finke show that restricting religious freedoms is associated with higher levels of violent persecution. Relying on a new source of coded data for nearly 200 countries and case studies of six countries, the book offers a global profile of religious freedom and religious persecution. Grim and Finke report that persecution is evident in all regions and is standard fare for many. They also find that religious freedoms are routinely denied and that government and the society at large serve to restrict these freedoms. They conclude that the price of freedom denied is high indeed.

See Reviews of The Price of Freedom Denied 

(4) Encourages broader freedoms

Fourth, religious freedom encourages broader freedoms that contribute to positive socio-economic development. Economist and Nobel laureate Amartya Sen, for instance, argues that societal development requires the removal of sources of “unfreedom.” And restrictions on religious freedom are certainly a source of unfreedom. Removing impediments to religious freedom facilitates freedom of other kinds. And research finds empirical evidence or this relationship. Religious freedom is highly correlated with the presence of other freedoms and a variety of positive social and economic outcomes ranging from better health care to higher incomes for women. While correlations are not causation, the correlations suggest that a more robust future research agenda should focus on better understanding these connections because it appears the freedoms rise or fall together.

Religious freedoms are embedded within a much larger bundle of civil liberties. At the core of religious expression is the freedom of speech and at the core of freedom to worship is the freedom to assemble. To claim freedom of speech without allowing for a freedom to express religious beliefs, quickly erodes freedom of speech in other areas. Likewise, allowing for restrictions on the assembly of religious groups opens the door for curtailing the activities of other groups as well. The denial of religious freedoms is inevitably intertwined with the denial of other freedoms.

Because religious freedoms are intertwined with other civil liberties, the outcomes of these liberties are also closely associated. Harvard economist and Nobel Laureate Amartya Sen argues that human freedom is not just the general opportunity for freedom in the abstract, but the specific processes within a country that result in better lives.

Research spotlight: An analysis from The Price of Freedom Denied of the most recent data on religious freedom shown in the figure to the left graphically displays the relationships religious freedoms hold with other civil liberties and the well-being of residents in countries.

The associations between religious freedoms and other civil liberties, press freedoms, and political freedoms are especially striking. The strong and highly significant correlations (exceeding .6) suggest that that the freedoms are closely intertwined. There is also growing evidence that this group of freedoms, including religious freedom, is associated with the well-being of those in the society. The data in the figure point to a few of these relationships, but additional research confirms these findings.

A recent study of 101 countries conducted by the Hudson Institute’s Center for Religious Freedom – using entirely independent data from Grim & Finke – also found that religious freedom in a country is strongly associated with other freedoms (including civil and political liberty, press freedom, and economic freedom) and with multiple measures of well being. They found that wherever religious freedom is high, there tends to be fewer incidents of armed conflict, better health outcomes, higher levels of earned income, prolonged democracy, and better educational opportunities for women.

Moreover, religious freedom is associated with higher overall human development, as measured by the human development index. Of course, these are correlations and offer no claims on the causal order, but they do suggest that religious freedom is integral part of a “bundled commodity” of human freedoms. Both religious freedoms and this bundle of freedoms are associated with many positive outcomes.

(5) Develops the economy as religious groups play a measurable role in the human and social development of countries

Fifth, religious freedom develops the economy. When religious groups operate in a free and competitive environment, religion can play a measurable role in the human and social development of countries. For instance, sociologist Robert Woodberry finds that the presence of proselytizing Protestant faiths, i.e., faiths competing for adherents, was associated with economic development throughout the world in the previous century. Even before that, Alexis de Tocqueville recognized that such Protestant associations in the early U.S. of these sorts established seminaries, constructed inns, created churches, disseminated books, and founded hospitals, prisons and schools. And these contributions are not just a legacy from the past. Katherine Marshall, former director of the Development Dialogue on Values and Ethics at the World Bank and former director in the World Bank’s Africa and East Asia regions, also recognizes that faith communities not only provide education and health services but they also provide social safety nets for orphans, disabled people and people who fall behind.

Research Spotlight: 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.

The full report, “Is Religious Freedom Good for Business?: A Conceptual and Empirical Analysis,” is available on the website of 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.

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 ten of the twelve 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, Cambridge, 2011). Grim & 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% 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.

(6) Overcomes the over-regulation associated with such things as coercive blasphemy laws

Sixth, religious freedom overcomes over-regulation that accompanies certain types of religious restrictions that directly limit or harm economic activity. A few current examples from the Muslim-majority countries – a set of countries with particularly high religious restrictions – are illustrative of how the lack of religious freedom contributes to worse economic and business outcomes. Religious restrictions among Muslim-majority countries impacting businesses take many forms. One direct religious restriction impacting economic freedom involves Islamic finance. For instance, businesses involved in creating, buying or selling Islamic financial instruments can find the situation that one Islamic law (sharia) board deems a particular instrument acceptable while another board does not, making the instrument’s acceptance on stock exchanges subject to differing interpretations of sharia.

Religious restrictions also include legal barriers for certain import and export industries, such as the halal food market and outright bans of certain blockbusters from the film industry. And, certain government laws and restrictions on religious freedom can stoke religion-related hostilities that disrupt markets throughout the region. Examples range from employment discrimination against women over such things as headscarves to the misuse of anti-blasphemy laws to attack business rivals. And perhaps most significantly for future economic growth, research shows that the instability associated with high and rising religious restrictions and hostilities can influence young entrepreneurs to take their talents elsewhere (See Tarin & Uddin, Brookings).

Research Spotlight: The Weekly Number. Business suffers as religious freedom deteriorates, according to a new report by the US Commission on International Religious Freedom. The report catalogues a series of cases where businesses are targeted as respect for the internationally recognized human right of freedom of religion or belief (FoRB) is not respected.

These cases are concerning but not surprising given research by the Religious Freedom & Business Foundation showing that violations of religious freedom have an adverse impact on a country’s business climate and economy.

The cases outlined in the new report include:

CHINA: Local authorities in parts of Xinjiang also threatened action against Muslim business owners if they declined to sell alcohol and cigarettes based on their religious beliefs and traditions.

ERITREA: Since 1994, Jehovah’s Witnesses have been barred from obtaining government-issued identity and travel documents, government jobs, and business licenses. Eritrean identity cards are required for legal recognition of marriages or land purchases. The State Department reported that some local authorities denied water and gas to Jehovah’s Witnesses.

The lack of fundamental human rights and economic opportunities in Eritrea has led thousands of Eritreans to flee the country to neighboring states and beyond to seek asylum, including in Europe and the United States, according to the report. The UN reported in 2015 that since 2014 an estimated six percent of the population has fled the country.

NORTH KOREA: In part due to ongoing egregious violations of human rights, including the absence of religious freedom, in February, the US Congress approved and President Barack Obama signed into law the North Korea Sanctions Enforcement Act, which imposes both mandatory and discretionary sanctions against individuals conducting certain kinds of business with North Korea. This cuts off important business connections and possibilities for the country to emerge from isolation.

NIGERIA: Since 1999, violence between Christian and Muslim communities in Nigeria, particularly in the Middle Belt states, has resulted in the deaths of more than 18,000 people, displaced hundreds of thousands, and damaged or destroyed thousands of churches, mosques, businesses, homes, and other structures. While this violence usually does not start as a religious conflict, it often takes on religious undertones and is perceived as a religion-based conflict for many involved.

The Nigerian government’s efforts against Boko Haram continue to be primarily military actions. While it has announced multiple initiatives to support Boko Haram’s victims and address the economic and educational issues driving conflict, there have been no concrete actions, according to the report. A December 2015 comprehensive conference for the northeast was delayed indefinitely, and it is unclear who in the Nigerian government is responsible for Northeastern affairs. Further, the Nigerian government is doing little to counter radicalization among potential Boko Haram recruits.

VIETNAM: During 2015, local authorities in some areas continued to harass and question the independent Buddhist faith Hoa Hao in connection with the practice of their religion. For example, worshippers’ homes and businesses in Dong Thap Province were repeatedly vandalized and surveilled, causing significant disruptions to their livelihoods. Khmer Krom Buddhists experienced similar harassment. For example, local authorities in Soc Trang Province have allowed private enterprises to establish commercial businesses on temple grounds, which Khmer Krom Buddhists believe violates the sanctity of the temples. Independent Cao Dai followers in Phu Yen Province protested the local government’s attempts to bulldoze Tuy An Temple where they worship.

TAJIKISTAN: With the Russian economy’s recent downturn, hundreds of thousands of Tajik workers have returned home to few job prospects, giving rise to new social tensions. In 2015 Secretary Kerry made a public statement noting Tajikistan’s security and economic challenges and highlighted the need to fight violent extremism while respecting human rights, religious freedom, and active political participation.

INDIA: Article 48 of the Indian constitution and most Indian states (24 out of 29, as of 2015) significantly restrict or ban cow slaughter, which is required for Muslims during Eid al-Adha (Festival of the Sacrifice). The application of these provisions also economically marginalizes Muslims and Dalits (who adhere to various religious faiths); many members of these communities work in the beef industry, including slaughter for consumption, hauling items, and producing leather goods. Under state criminal laws, individuals can face up to 10 years in jail or a fine of up to 10,000 rupees (US$150) for the slaughter or possession of cows or bulls or the consumption of beef, and mere accusations of violations can lead to violence.

Separately, non-Hindu Dalits, especially Christians and Muslims, do not qualify for the official reserves for jobs or school placement available to Hindu Dalits, putting these groups at a significant economic and social advancement disadvantage.

BAHRAIN: In October 2015, UN experts found that patterns of cultural, economic, educational, and social discrimination against Shi’a Muslims in Bahrain persisted in 2015. They found that excessive use of force and abuses targeting Shi’a clerics continued, as did discrimination in the education system, media, public sector employment, and other government social policies, such as housing and welfare programs.

(7) Multiplies trust among employees whose faith and beliefs are respected

And seventh, religious freedom multiplies trust. Religious freedom, when respected within a company, can also directly benefit a company’s bottom line. These include both lower costs and improved morale. An example of lower costs includes less liability for litigation. 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 negative national publicity. Respect for reasonable accommodation of religious freedom in the workplace can improve employee morale, increase retention of valued employees, and help with conflict resolution. Moreover, businesses may gain a competitive advantage by engaging stakeholder expectations that are increasingly demanding that companies play a positive role in addressing environmental, social and governance challenges. As recognized by business consulting group McKinsey & Company, the ethical stakeholder has clearly emerged and is on the rise. Important business stakeholders include business partners, investors and consumers, and a growing segment of ethically sensitive customers tend to prefer companies that are responsive to human rights. Indeed, consumer and government preferences given to human-rights-sensitive companies may give a company an advantage in competitive markets and enable it to charge premium prices and land choice contracts. And recognizing this human rights impact on branding, companies such as Gap have assumed shared responsibility for the conditions under which its goods are manufactured (see Grim & Walsh).

Action Spotlight: The Corporate Pledge in Support of Freedom of Religion or Belief (FoRB) — which supports religious diversity and freedom in the workplace — sends two clear messages to current and prospective employees: (1) You can work here without changing who you are; and (2) the company respects all employees and will not favor certain employees over others … and that’s good for the business of all.

The FoRB Pledge is one component of a company’s overall strategy to value its employees and increase their loyalty for the benefit of customers and shareholders. The FoRB Pledge is a company’s public commitment to take reasonable steps to ensure that working at the company does not put employees at odds with their deeply held religious convictions.

Research Spotlight: However, 36% of American workers report experiencing or witnessing workplace religious discrimination, according to a recent Tanenbaum survey, “What American Workers Really Think about Religion.”

The most successful businesses encourage an environment in which employees can bring their “full self” to work. Employees need to feel comfortable being who they are in the workplace, including being true to their core identity and beliefs. That includes recognizing and respecting an employee’s religion and its practice.

In today’s increasingly more competitive business environment, companies will need to draw upon the talent and experience of every employee. They can’t afford to leave anyone out. If they exclude or alienate someone for reasons having nothing to do with a person’s ability to do the job, they might also be excluding the next great business solution or the next great product idea. The very thing a company might need for its success. At the very least, they’ll be missing out on lots of really great talent.

And as companies become increasingly more global, they’ll need employees who reflect the increasing diversity of their customers. They’ll need employees who can relate to the daily experience of customers and who can see the customer point of view. For potentially billions of customers, religious belief and practice are a part of daily life. Having employees who understand that will not only help companies avoid costly missteps, it will also help companies develop products and services better tailed to customer needs. That’s an essential part of being competitive.

Conclusion

Given that religious freedom contributes to better economic and business outcomes – and especially sustainable development – advances in religious freedom are in the self-interest of businesses, governments and societies. While this observation does not suggest that religious freedom is the sole or even main anecdote to poor economic performance, it does suggest that religious freedom is related to economic success. Certainly, businesses would benefit from taking religious freedom considerations into account in their strategic planning, labor management and community interactions. For instance, when evaluating locations for future research and development operations, countries with good records on religious freedom may be a better environment to find societies open to innovation and experimentation.