Religious Competition and Reallocation: The Political Economy of Secularization in the Protestant Reformation / Davide Cantoni, Jeremiah Dittmar, Noam Yuchtman.

Format:

Book

Author/Creator:

Cantoni, Davide.

Contributor:

National Bureau of Economic Research.

Dittmar, Jeremiah.

Yuchtman, Noam.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23934.

NBER working paper series no. w23934

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Religious Competition and Reallocation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

Using novel microdata, we document an unintended, first-order consequence of the Protestant Reformation: a massive reallocation of resources from religious to secular purposes. To understand this process, we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources. Consistent with our framework, religious competition changed the balance of power between secular and religious elites: secular authorities acquired enormous amounts of wealth from monasteries closed during the Reformation, particularly in Protestant regions. This transfer of resources had important consequences. First, it shifted the allocation of upper-tail human capital. Graduates of Protestant universities increasingly took secular, especially administrative, occupations. Protestant university students increasingly studied secular subjects, especially degrees that prepared students for public sector jobs, rather than church sector-specific theology. Second, it affected the sectoral composition of fixed investment. Particularly in Protestant regions, new construction shifted from religious toward secular purposes, especially the building of palaces and administrative buildings, which reflected the increased wealth and power of secular lords. Reallocation was not driven by preexisting economic or cultural differences. Our findings indicate that the Reformation played an important causal role in the secularization of the West.

Notes:

Print version record

October 2017.