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Fundamentalist organizations and the terrorists they spawn do not arise of a vacuum. Combating terrorism requires understanding the principles of groups' formation, development and growth. We use economic theory to explain the creation and development of fundamentalist groups. In this paper we develop a theory of fundamentalism and terrorism under which leaders compete to enhance the level of observance of their followers. Our model explains the existence of competing fundamentalist groups and the increase in their intensity over time. Competition among fundamentalists makes them more extreme and may lead to terrorist activity.

ABSTRACTThis study investigates how religiosity (i.e., the strength of religion) differences across countries influence an important characteristic of financial reporting, accounting conservatism. Prior literature suggests that religious individuals are more risk averse and have higher ethical standards, while accounting conservatism has been shown to reduce various risks to the firm (e.g., bankruptcy and stock price crashes) at the expense of higher reported earnings. We find that managers in more religious societies report more conservatively. Specifically, our cross-country analysis reveals that firms headquartered in countries with higher levels of religiosity exhibit, on average, higher accounting conservatism in financial reporting. This positive association is stronger in countries following IFRS or U.S. GAAP, and weaker in countries with a high degree of uncertainty avoidance, strong legal enforcement, and countries with greater numbers of religions.JEL Classifications: G34; M41; Z12.Data Availability: Data are available from the public sources cited in the text.

We investigate the legacy of the former Papal States on modern female condition by comparing Italian municipalities located in a narrow band across the border between the former Papal States and the former Grand Duchy of Tuscany. While in the Papal States gender inequality was particularly severe, the Grand Duchy of Tuscany experienced a relatively stronger female emancipation. We find that one century after the fall of the Papal States, in the municipalities formerly ruled by the Pope, there is lower female labour market participation and employment when compared to their counterparts in Tuscany, while we do not detect any discontinuity for males. We also find that in the former Papal States there is less political support for the legal right to divorce, historically advocated by women emancipation movements.

Recent theories of the Long Divergence between Middle Eastern and Western European economies focus on Middle Eastern (over-)reliance on religious legitimacy, use of slave soldiers, and persistence of restrictive proscriptions of religious (Islamic) law. These theories take as exogenous the cultural values that complement the prevailing institutions. As a result, they miss the role of cultural values in either supporting the persistence of or inducing change in the economic and institutional environment. In this paper, we address these issues by modeling the joint evolution of institutions and culture. In doing so, we place the various hypotheses of economic divergence into one, unifying framework. We highlight the role that cultural transmission plays in reinforcing institutional evolution toward either theocratic or secular states. We extend the model to shed light on political decentralization and technological change in the two regions.

Religious leaders sometimes condemn progressive social norms. In this paper, I revisit David Hume's hypothesis that secular states can "bribe" churches into adopting less strict religious doctrines. The hypothesis is difficult to test due to reverse causality: more liberal theologies may attract more political support in the first place. To circumvent this problem, I focus on a theological conflict over same-sex marriage within the Church of Sweden and take advantage of political regulations that effectively make some parishes shareholders of the church's state-protected property. The shares used for statistical identification are tied to property rights assigned more than 300 years ago, and they cannot be sold, traded or amended by the individual parishes. I find that priests in shareholding parishes are less likely to publicly oppose same-sex marriage. The effect is stronger in parishes with more conservative members. The combined results are consistent with a model of clerical opportunism, in which access to political rents increases the clergy's loyalty to the political sponsors relative to the local community.

I investigate empirically the role of religion and political institutions in policies against human trafficking, using the new 3P Anti-trafficking Policy Index. The dataset contains 175 countries. The results show that governments in countries with Christian majorities implement stricter anti-trafficking policies than countries with Muslim majorities. The differences between countries with Christian and Muslim majorities is pronounced in dictatorships but less so in democracies. The influence of religion on the overall 3P Anti-trafficking Policy Index is driven by protection and prevention policies. As compared to prosecution policies that mainly target the perpetrators of human trafficking, protection and prevention policies mainly protect the victims of human trafficking, i.e. predominantly women. The conclusions are consistent with other empirical findings regarding the association between religion, political institutions, and human development.

This paper empirically studies the voting outcomes of Egypt's first parliamentary elections after the Arab Spring. In light of the strong Islamist success in the polls, we explore the main determinants of Islamist vs. secular voting. We identify three dimensions that affect voting outcomes at the constituency level: the socio-economic profile, the economic structure and the electoral institutional framework. Our results show that education is negatively associated with Islamist voting. Interestingly, we find significant evidence which suggests that higher poverty levels are associated with a lower vote share for Islamist parties. Later voting stages in the sequential voting setup do not exhibit a bandwagon effect.

The political economy of occult belief in Africa can highlight hidden social and political conflict in times of transition which remain otherwise undetected. This has been demonstrated in taking the development of witchcraft accusations over time as indicator, and the Nupe of Northern Nigeria as an example. A tentative long-term study on the growth of the Nupe state since pre-colonial times points towards a close relationship between the content and form of witchcraft accusations and the mode of production under which the stakeholders used to life and work. Over time, witchcraft accusations among the Nupe apparently served different, even antagonistic ends, depending on the mode of production in which they were embedded. Much confusion in literature on the apparent contradiction between 'emancipating' and 'oppressive' functions of witchcraft beliefs could be avoided by considering this articulation between modes of production, witchcraft accusations, and the underlying vested interests of the ruling powers. ; RÉSUMÉ "Sur l'articulation de la sorcellerie et de modes de production parmi les Nupe, dans le nord du Nigéria": L'économie politique de la croyance occulte en Afrique peut mettre en évidence des conflits sociales et politiques cachés en période de transition qui restent autrement inaperçus. Cela a été démontré à prendre le développement des accusations de sorcellerie au fil du temps comme indicateur, et les Nupe du Nigeria du Nord comme un exemple. Une étude préliminaire à long terme sur la croissance de l'État Nupe depuis l'époque précoloniale pointe vers une relation étroite entre le contenu et la forme des accusations de sorcellerie et le mode de production en vertu de laquelle les parties prenantes ont travaillés. Au fil du temps, les accusations de sorcellerie parmi les Nupe ont apparemment servis différents, voire antagonistes objectives, selon le mode de production dans lequel ils ont été intégrés. Beaucoup de confusion dans la littérature sur la contradiction apparente entre des croyances de sorcellerie « émancipateur » et des fonctions plutôt « oppressives » pourrait être évité en prenant en compte cette articulation entre les modes de production, les accusations de sorcellerie, et les intérêts sous-jacents des puissances dominantes.

We use economic theory to examine the intensity of fundamentalist sects. Leaders work to enhance their followers? observance level. We model three stylized situations under which fundamentalist groups function, examining the intensity of observance in each. We find that, under reasonable conditions, rivalry among fundamentalists makes them more extreme.

Der vorliegende Beitrag zielt darauf, eine fundierte Vorgehensweise für die Untersuchung der Frage zu entwickeln, welche Auswirkungen die mentale Verfaßtheit ökonomischen Akteure auf ihr mikroökonomisches Entscheidungs- und Wahlhandlungsverhalten hat und welche Konsequenzen sich daraus auf der makroökonomischen Ebene ergeben. Auf der Suche nach den ideenhistorischen Wurzeln einer solchen mentalitätsbasierten Analyse ökonomischer Aktivitäten stößt man vor allem auf zwei Namen: Thorstein Veblen (1857-1929) und Max Weber (1864-1920). Während für Weber in 'Die protestantische Ethik und der Geist des Kapitalismus' (1904/05) die Bezogenheit des Menschen auf die Instanz der Transzendenz im Vordergrund steht, fokussiert Veblen in 'The Theory of the Leisure Class' (1899) seine Untersuchung auf den emulativen Statusvergleich in einer Gesellschaft. Vor dem Hintergrund der theoretischen Ansätze von Veblen und Weber analysieren die Autoren in der vorliegenden Arbeit den gegenwärtigen Stand des inneren Vereinigungsprozesses der beiden früheren Teile Deutschlands. Die Untersuchung zeigt zum einen, daß sich die mentalen Hindernisse und Schwierigkeiten beim Integrationsprozeß in die Soziale Marktwirtschaft, die sich für den einzelnen Menschen und für die gesamte "ostdeutsche" Gesellschaft aus der DDR-Sozialisation ergeben, aufgrund des Wirkens des Veblenschen 'Regime of Status' (Statusemulation) keineswegs auflösen, sondern im Gegenteil noch verstärken. Zum anderen ist in den neuen Bundesländern das Phänomen zu beobachten, daß sich der Webersche 'Geist des Kapitalismus' (als ursprünglich produktiv wirkende religiös motivierte protestantisch-puritanische Leistungs-, Verantwortungs- und Sozialethik) im postsozialistischen und säkularisierten Kontext nahezu in sein Gegenteil verkehrt. Daraus folgt, daß sich anstatt einer schönfärbenden (N)Ostalgie in den neuen Bundesländern eine echte innere Distanz zum alten autoritär-repressiven System der DDR entwickeln muß, um eine erfolgreiche Integration und Bindung an die neuen gesellschaftlich-kulturellen und ökonomischen Verhältnisse der Bundesrepublik zu ermöglichen. Dies führt zu der Notwendigkeit, neue politische Konzepte zu entwerfen und sich von überholten "Lösungsstrategien" (z. B. vom Setzen kurzfristiger Anreize durch immer neue Förderprogramme) zu trennen. Die Autoren dieses Beitrages diskutieren einige Ansätze in diese Richtung wie zum Beispiel die Konzeption eines Bürgergeldes.

The global outbreak of the coronavirus took all the world governments by surprise and generally concentrated government functions on dealing with the emergent health crisis. In the first months since the declaration of the pandemic, diplomatic missions focused their activities solely on helping and supporting their citizens in the efforts to return to their home countries. Cultural diplomacy as an important segment of diplomatic activities and an integral part of the overall cultural promotion of countries, was placed in the deep background, sharing the same or similar fate with the activities in the field of cultural tourism. The absence of a clear vision for cultural action and promotion since the beginning of the pandemic, a few months later was articulated in creating predictable frameworks for action, which this paper compares via the experiences of countries with various available resources and opportunities in these areas.Keywords: cultural diplomacy, cultural tourism, global pandemicJEL Classification: I00, I18, Z11, Z12, Z18

We investigate how the intensity of Ramadan affects educational outcomes by exploiting spatio-temporal variation in annual fasting hours. Longer fasting hours are related to increases in student performance in a panel of TIMMS test scores (1995-2019) across Muslim countries but not other countries. Results are confirmed in a panel of PISA test scores (2003-2018) allowing within country-wave comparisons of Muslim to non-Muslim students across Europe. We provide evidence consistent with the hypothesis that a demanding Ramadan during adolescence affects educational performance by facilitating formation of social capital and social identity via increased religious participation and shared experiences among students.

Discrimination has been documented against women in Muslim-majority countries. Constitutions differ among Muslim-majority countries. By using women's rights indicators and exploiting cross-country variation, we find that discrimination against women is more pronounced in countries where Islam is the source of legislation. Constitutions changed in only four Muslim-majority countries since 1980. We discuss anecdotal evidence to what extent women's rights changed as a consequence of new constitutions. Empirical studies should thus distinguish between types of Muslim-majority countries.

There has been much study of the consequences of economic freedom but, outside of the role of political institutions, there has been little study of the determinants of economic freedom. We investigate whether religion affects economic freedom. Our cross-sectional dataset includes 137 countries averaged over the period 2001-2010. Simple correlations show that Protestantism is associated with economic freedom, Islam is not, with Catholicism in between. The Protestant ethic requires economic freedom. Our empirical estimates, which include religiosity, political institutions, and other explanatory variables, confirm that Protestantism is most conducive to economic freedom.

This paper shows that peer pressure may lead to dynamic convergence to a norm that is skewed with respect to preferences in society, yet is endogenously upheld by the population. Moreover, a skewed norm will often be more sustainable than a representative norm. This may explain the skewness of various social and religious norms. By furthermore interpreting a norm as a political regime, we show that biased regimes can be sustained even without the existence of a powerful group with coherent interests. We analyze the pattern by which political regimes collapse and relate it to contemporary revolutions and mass protests.