ISET Economist Blog

The Impact of Religion on Georgia’s Economy
Sunday, 10 April, 2016

According to a study from 2015 by WIN/Gallup, 93% of Georgians consider themselves to be religious. There is only one country in the world that has a higher rate, namely Thailand, where this number stands at 94%, while the same percentage of religious people as in Georgia could only be found in Armenia, Bangladesh, and Morocco. All other nations of the world are less enchanted about religion. Worldwide, on average only 63% of people say they are believers, and in some countries, like China and Japan, the number goes down to 7% and 13%, respectively.

Given that in this ranking Georgia has a shared second place, I want to speculate about the economic consequences of such firm belief. While connecting economics and religiosity may seem to be an obscure endeavor to some readers, this avenue of research has a long tradition and generated many fascinating insights. In this article, I want to report on features of belief systems that were found in this branch of academic research to be conducive or detrimental to economic success. The reader, who may be much better acquainted with Georgian Orthodoxy than I am, is invited to draw own conclusions for Georgia.


Religions differ very much in regard to their orientations towards the afterlife. The most extreme cases are arguably Judaism and Islam. According to the prominent American Rabbi Neil Gillman, for a long time Judaism did not even know the concept of the afterlife: “With Daniel, composed at the very end of the Biblical period, bodily resurrection enters into the picture for the first time. Until then, death is death. When you are dead, you are dead. Nothing. No mentioning of the soul in the Hebrew scriptures. Not as an entity. It is the breath that vivifies the body, and death is the extinction of that spark.” (Quote from the conversation he had with Robert Kuhn, to be seen on Gillman goes on to say that the concept of an afterlife was introduced to Judaism in the Maccabean wars when there was a need for martyrs. It was difficult to motivate warriors to sacrifice their lives fighting against the Hellenistic Seleucids if there was no reward whatsoever. In this situation “comes the author of Daniel 12 who says that death is not the end, that those of you who die for God and Torah and Israel will be resurrected.” 

Also in modern times, the afterlife plays a rather minor role for Jewish believers. If there will be consequences for good or bad deeds, they are rather expected to happen in the current world. When in 2003, a terror attack blew up a bus in the ultraorthodox Shmuel Ha-Navi neighborhood in Jerusalem, killing 20 people who came back from their prayers at the Western Wall, representatives of the ultraorthodox community considered this to be punishment for sins. As an ultra-orthodox Jew named Hechkel Rosenboim explained: “The attack happened in the period of ‘in-between times,’ which is the three-week vacation that the ultra-Orthodox community enjoys during the summer. During this time, there are many immodest behaviors, such as going to the beach, where the laws of separation [men and women swim separately] aren’t upheld. It shows that God is signaling to the people of Israel that even during this time, one must study the Torah. Always study the Torah.” (Quoted after an article by Haim Levinson in Maariv).

The other extreme is Islam, where life here on earth is not much more than a kind of “exam”, serving to separate the pious from the sinners and, if the test was passed, gives admission to paradise. All that is in this world is nothing but Dunya, worthless in itself and just preparation for the eternal afterlife. The stakes are high – eternal paradise vs. eternal hell. (Hence, it is particularly easy to recruit suicide bombers among Muslims, as there is a strong incentive to secure one’s eternal place in heaven through one single deed on earth.) But what about economics?

The more a person is oriented towards the afterlife, the less they are eager to accumulate wealth before death, which is an important driving force for economic zeal. This idea, which goes back to Max Weber, also applies to the distinction between Catholics and Protestants. As Jerry Bowyer paraphrased Weber in Forbes Magazine: “The focus on this life, as opposed to the afterlife, tends to create large income streams. […] The result is a well-educated, highly skilled diligent workforce and large pools of capital. Without this or something like it, modern capitalism would not have arisen as it did.”

Where is Georgian orthodoxy located on this scale of worldly vs. afterlife orientation? It seems to be as if the Georgian Orthodox church, most prominently represented by its Patriarch, is very interested in worldly affairs. The most unusual experience in this respect I had three years ago, when, on behalf of USAID, I had authored a study on the fiscal implications of the local self-government reform which was on the agenda at that time. I met with deputy ministers and other government experts to present our results, and despite the matter being highly technical, there was a lot of controversy around this reform. However, I was surprised when a few weeks after we had concluded our work, the Patriarch himself chimed in: “We will never tolerate this [the reform] and will do our best to make sure this does not happen.” (Quoted after To me, its strong political involvement suggests that the Georgian church is very concerned about the world here and now and does not focus excessively on the world hereafter.


Religion also has a strong influence on the level of corruption in a society. This has been pointed out most clearly when comparing other groups with Christian Protestants – in most studies, Protestants are so much less corrupt than everybody else that in corruption research one calls this the “Protestant Effect” (cf. Shadabi: “The Impact of Religion on Corruption”, Journal of Business Inquiry, 2013). The scholars who found these results hypothesize that in Protestantism, each believer is directly held responsible by God, without any intermediaries (priests, saints, popes). In Protestant theology, clergy does not have any privileged access to God, and – unlike saints in Catholicism – can for sure not influence God’s decision about whether one goes to paradise or hell. 

In Catholicism, on the other hand, the individual is part of a hierarchical structure in which, as far as salvation is concerned, he is not held responsible by God directly, but by the priest (who, as part of his worldly ground staff, also takes the role of the confessor). A priest is of course much less of an authority than God, may have his own moral flaws, and, most importantly, it will often be easy to hide corruptive deeds from his eyes (or just not tell him about it).

In this respect, the church of Georgia seems to resemble more the Catholics than the Protestants. A hierarchy of clergy is set between the individual believer and God.


There is another economic aspect to religion. Namely, exercising religious activities may require a lot of resources. I was confronted with this fact when recently I guided two religious Jewish friends of mine through Tbilisi. Just over this one afternoon, I realized how many of their resources they spend on the observance of the Halacha, the traditional Jewish law. To prevent eating non-kosher food, they brought their own camping stove with them to prepare kosher food in the hotel room. On Shabbat they were not allowed to expend money, hence their tourist program was highly restricted on that day. Finally, after a long walk, we had made it to a vegetarian restaurant in the Old City, but my guests were not sure that they could really eat there, because there was no guarantee that on the plates had not been served meat at some earlier time, or the cook had prepared meat before he made the vegetarian dish or whatnot. They called a rabbi in Israel, and after a lengthy discussion, it was decided that eating in the restaurant was too risky. Hence, we had to walk even further to a kosher restaurant close to the Synagogue. Likewise, practicing Muslims also pursue a costly lifestyle, praying five times a day, having to get up early in the morning (even if they went to bed late), keeping diet during Ramadan, and so on. 

The Christian religion, on the other hand, does not demand that much time and resources from its believers. In Orthodoxy, one should go for two to three hours to the church on Saturday and the same on Sunday. This is not overly expensive and should not have a significant impact on economic activities.

Let us wrap up. Robert Barro, one of the most eminent American economists who has worked extensively on the connection between religion and economics, looks at the issue mainly from an empirical angle. In his frequently cited 2003 article “Religion and Economic Growth across Countries” (coauthored with his wife Rachel McCleary and published in the American Sociological Review), he comes to the result that “Economic growth responds positively to religious beliefs […] but negatively to church attendance.” He argues that there is a kind of inverse U-curve: looking at data from 59 countries, on average the effect of religiosity on growth is positive, yet if people excessively sacrifice resources for religious activities, the economic costs exceed the benefits.

Whatever one thinks about the benefits of religion for the Georgian economy, the cost of an Orthodox religious lifestyle does not seem to be overly high. Therefore, unlike in Bangladesh and Morocco, 93% of believers in Georgia are not a number that gives rise to economic concerns.

The views and analysis in this article belong solely to the author(s) and do not necessarily reflect the views of the international School of Economics at TSU (ISET) or ISET Policty Institute.