Working Paper: NBER ID: w14004
Authors: Gary Richardson; Michael McBride
Abstract: When the mortality rate is high, repeated interaction alone may not sustain cooperation, and religion may play an important role in shaping economic institutions. This insight explains why during the fourteenth century, when plagues decimated populations and the church promoted the doctrine of purgatory, guilds that bundled together religious and occupational activities dominated manufacturing and commerce. During the sixteenth century, the disease environment eased, and the Reformation dispelled the doctrine of purgatory, necessitating the development of new methods of organizing industry. The logic underlying this conclusion has implications for the study of institutions, economics, and religion throughout history and in the developing world today.
Keywords: Religion; Cooperation; Economic Institutions; Craft Guilds; Historical Analysis
JEL Codes: D02; D43; L1; L15; L2; L22; L23; N34; N64; N74; N84; N94; Z12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Religion (doctrine of purgatory) (Z12) | Guilds (J51) |
| Guilds (J51) | Cooperation in manufacturing and commerce (L14) |
| Religion (doctrine of purgatory) (Z12) | Cooperation in manufacturing and commerce (L14) |
| Decline of religious influence (Z12) | Changes in economic structures (L16) |