About the discipline
Religious beliefs influence how people choose to spend their money and how they believe money should be spent. They also inform their beliefs about the role of their nation’s economy in the world and the responsibilities of the state and individual. Religious organizations can also be powerful players in the secular realms of government and politics, affecting economic policy decisions.
Personal finance: Individuals’ and congregations’ religious ethics often govern their financial decisions – in giving, spending, saving, investing, borrowing, allocating and other money matters. For many people, religious beliefs affect what products they buy, and where they choose to spend their money. They may support or avoid certain businesses or industries because of religious beliefs. Some faiths celebrate holidays that lead to seasonal spending on religious-holiday-specific items. Many Christians believe in tithing 10 percent of their income to the church. Muslims are obliged to pay zakat al-fitr (charity) before the end of Ramadan to be given to the poor.
The Christian movement Word of Faith (known for its “Prosperity Gospel”), believes faithful Christians should expect financial prosperity and wealth, based on an interpretation of the words of the Apostle Paul: “Yet for your sakes (Christ) became poor, that you by his poverty might become rich” (2 Corinthians 8:9). Religious beliefs also play a role in individuals’ and congregations’ views toward credit, loans and debt. Christian theology views debt as not a sin, but that it should only be used in extreme necessity, since it leads to financial bondage, based on Proverbs 22:7, “the borrower becomes the lender’s slave.” Some Christians say it is not acceptable for Christians to owe any money, even for a home. Others feel such debts are acceptable as long as debt does not place a burden on the family’s finances.
Islam forbids lending with interest, as the Catholic Church long did, and the Torah states that all debts should be erased every seven years and every 50 years. Mormons believe in self-reliance, emphasizing that emergency preparedness includes preparing financially by staying out of debt, saving for the future and obtaining insurance. Faith-based investing is a burgeoning industry, and houses of worship now routinely offer courses in money management and personal finance.
Business finance: Those involved in the business community often bring with them similar beliefs as those that govern their personal financial habits. Executives and small business owners likely will exercise their personal religious beliefs about finances in the business world as well. Their beliefs affect the products they buy and sell, where they invest, the practices in which they engage, and their behavior in the workplace. Recent large-scale financial fraud in the private industry has caused some in the business community to appeal to religious values as the best way to increase ethical decision making in the workplace, though others are concerned about religion’s potential to create conflict or violate federal workplace laws.
As large corporations come under closer scrutiny, some religious organizations – from Christian mega-churches to Islamic charities (some came under scrutiny following the 9/11 terrorist attacks) – also feel the push to study their books more closely and be more transparent to members and the public about how money is spent. Though big-name mega-churches receive much publicity today, older and smaller churches, many in the mainline Protestant tradition, are shrinking in membership and resources. They are seeking ways to revitalize their church “economies” to remain viable. These could all be a growing industry for analysts and consultants, who can advise churches on economic matters and businesses on ethical matters.
Philosophies: Religious beliefs about economics and personal finance lead people of faith to various positions on current issues. For example, while most churches believe in helping the poor, they take different views on how to do it. Some of the more conservative evangelical Christian churches associate any kind of state intervention with socialism, favoring individual or faith-oriented efforts; though others praise the value of work over welfare, even at minimum wage. Some religious groups see an active role for the state and favor raising the minimum wage, a change they feel is tied to justice and practically a scriptural mandate. Different religious interpretations of philanthropy – where and to whom money should be given, and why – affect both the personal finances of the individual and the resources communities have available to serve needs, locally and globally.
Global scale: Religious beliefs often affect people’s views of global poverty and bounty, and the roles of states and individuals in mitigating suffering. Some religious groups, such as the Presbyterian Church (U.S.A) have joined efforts to divest investment portfolios form Israeli companies and companies that do business with Israel to pressure Israel to guarantee human rights for Palestinians. This angers some other religious groups, such as the (Jewish) Anti-Defamation League, which believes divestment is a punitive measure against Israel for its policies in the West Bank and Gaza Strip.
Around the world, wars related to religion affect local and global economies. One could investigate how religion, or its suppression, affects economic growth, or ponder whether increasing abundance through freer markets would decrease the supply of people wiling to be suicide bombers. International Third World debt has reached the scale that many economists, as well as people of faith, are convinced that debt cancellation is the only way to restore global equity in relations with the developing nations. Religious groups often spearhead intervention in impoverished areas to improve quality of life. Some efforts are evangelistic in nature, others are not overtly so. Intervention ranges from providing medical care and building homes, to improving sanitation and teaching indigenous people sustainable agriculture and new enterprises to overcome poverty.
Areas for study: Scholars in large numbers are now analyzing the intersection of faith and economics. They include people from a range of disciplines from across the United States and around the world, as well as students doing groundbreaking research. Questions they could look at include: How does religion affect the economy? How do economic factors impact religious choices? How do religious beliefs affect how people spend their money? What impact does religion have on the global economy? How does membership in a strict or extreme religious group pay off – not just in the afterlife, but in the here and now? Does faith generate individual behavior that boosts the economy?
Researchers could also look at what resources are available for those of faith who want to make large purchases without using credit or incurring debt, or want help consolidating existing debt. This field of study, as well as financial counselors who can offer advice from a religious perspective, will be a growing field.
- “CEO’s Religious Affiliation and Management Conservatism” by Mufaddal Baxamusa and Abu Jalal. Financial Management. 45 no. 1 (2016): 67-104.
- “Differential social performance of religiously-affiliated microfinance institutions (MFIs) in base of pyramid (BoP) markets” by R. Mitch Casselman, Linda M. Sama and Abraham Stefanidis. Journal of Business Ethics. 132 no. 3 (2015): 539-552.
- “Does Islamic finance spur banking sector development” by Laurent Gheeraert. Journal of Economic Behavior & Organization. 103 (2014): S4-S20.
- “Does religion matter to equity pricing” by Sadok El Ghoul, Omrane Guedhami, Yang Ni, Jeffrey Pittman and Samir Saadi. Journal of Business Ethics. 111 no. 4 (2012): 491-518.
- “Does religion mitigate earnings management? Evidence from China” by Xingqiang Du, Wei Jian, Shaojuan Lai, Yingjie Du and Hongmei Pei. Journal of Business Ethics. 131 no. 3 (2015): 699-749.
- “Does religion mitigate tunneling? Evidence from Chinese Buddhism” by Xingqiang Du. Journal of Business Ethics. 125 no. 2 (2014): 299-327.
- “Do Religious Nonprofit and For-profit Organizations Respond Differently to Financial Incentives? The hospice industry” by Richard C. Lindrooth and Burton A. Weisbrod. Journal of Health Economics. 26, no. 2 (2007): 342-57.
- “Economics, religion, and culture: A brief introduction” by Daniel L. Chen and Daniel M. Hungerman. Journal of Economic Behavior & Organization. 104 (2014): 1-3.
- “Islam, the Mediterranean and the Rise of Capitalism” by Jairus Banaji. Historical Materialism. 15, no. 1 (2007): 47-74.
- “Reasons on the similarity of objections with regards to gambling and speculation in Islamic finance and conventional finance” by Sherin Kunhibava. Journal of Gambling Studies. 27 no. 1 (2011): 1-13.
- “Reforming Finance and Economics in Light of the Abrahamic Principles” by Camille Paldi. Journal of Islamic Banking & Finance. 32 no. 3 (2015): 66-76.
- “Religion, economic attitudes, and household finance” by Luc Renneboog and Christophe Spaenjers. Oxford Economic Papers. 64 no. 1 (2012): 103-127.
- “Religion and bank loan terms” W. He and M. R. Hu. (Journal of Banking and Finance. 64 (2016): 205-215.
- “Religiosity vs. well-being effects on investor behavior” by P. O. Klein, R. Turk and L. Weill. Journal of Economic Behavior and Organization. 138 (2017): 50-62.
- “Risky Business: Assessing Risk Preference Explanations for Gender Differences in Religiosity” by Louis Marie Roth and Jeffrey Kroll. American Sociological Review. 72, no. 2 (2007): 205-20.
- “Satisfaction for Whom? Freedom for What? Theology and the Economic Theory of the Consumer” by Mark Nixon. Journal of Business Ethics. 70, no. 1 (2007): 39-60.
- “SmartMoney’: Religious Giving” by Sam Kean. Chronicle of Philanthropy. 19, no. 6 (2007): 41.
- “Some insights on religion from public goods economics” by Prateek Goohra. Forum for Social Economics. 40 no. 2 (2011): 221-231.
- “The Credit Crunch and Islamic Finance: Shari’Ah-Compliant Finance Against the Backdrop of the Credit Crisis” by Omar Salah and Reinout M. Wibier. TISCO Working Paper Series on Banking, Finance and Services. No. 1 (2011).
- “The Financing of The Church, a Widely Debated Issue” Mircea Cricovean. Practical Application of Science. 2 no. 1 (2014): 155-163.
- “The Tree of Science and Original Sin: Do Christian Religious Beliefs Constrain the Supply of Scientists?” by Maury D. Granger and Gregory N. Price. Journal of Socio-Economics. 36, no. 1 (2007): 144-60.
- “Three decades of “repackaging” Islamic finance in international markets” by Eddie S. Fang. Journal of Islamic Marketing. 7 no. 1 (2016): 37-58.
- “World Bank and Heavenly Bank in Poverty and Prosperity: The Case of Tanzanian Faith Gospel” by Paivi Hasu. Review of African Political Economy. 33, no. 110 (2006): 679-92.
- Money, Greed, and God: Why Capitalism is the Solution and Not the Problem. Jay W. Richards. HarperOne (May 4, 2010).
- Passing the Plate: Why American Christians Don’t Give Away More Money. Christian Smith. Oxford University Press, USA (Sept. 29, 2008).
- Faith, Morals and Money: What the World’s Religions Tell Us About Ethics in the Marketplace. Edward D. Zinbarg. Continuum International Publishing Group, 2005.
- Islamic Finance: Law, Economics, and Practice. Mahmoud A. El-Gamal. Cambridge University Press, 2008.
- Religion and economics. James M. Dean, Anthony Michael and C. Waterman.Springer, 1999.
- The Protestant Ethic and the Spirit of Capitalism. Max Weber and Stephen Kalberg. Revised ed. Oxford University Press, USA, 2010.
- To Serve God and Wal-Mart: The Making of Christian Free Enterprise. Bethany Moreton. Harvard University Press, 2010.
- Religion, Economics, and Public Policy: Ironies, Tragedies, and Absurdities of the Contemporary Culture Wars. Andrew D. Walsh. Praeger Publishers, 2000.
- Capitalism and Religion: The Price of Piety. Philip Goodchild. Routledge, 2002.
- Divine Economy: Theology and the Market. D. Stephen Long. Routledge, 2000.
- Religion, Economics and Demography: The Effects of Religion on Education, Work, and the Family. Evelyn Lehrer. Routledge, 2008.
- Biblical Principles for Success in Personal Finance. Rich Brott. ABC Book Publishing, 2008.
Codes of ethics
- American Homeowners Association (AHA) – Mission Statement (see also Community)
- Microsoft Finance – Code of Professional Conduct
- Economic Development Administration – Mission
- Association for Financial Professionals – Standards of Ethical Conduct
- The World Bank Group – Code of Professional Ethics (.pdf)
- Economics of Religion
- Association for the Study of Religion, Economics & Culture
- “God’s Trade, Economics of Judaism, Christianism and Islam.” Afrik.com, April 1, 2008
- Finance in Islam
- Economics of Religion Gateway
- “What are economists learning about religion?
- The economics of religion (ReligionLink)
Professional associations and faith groups
- Association of Christian Economists
- Association of Christians in Mathematical Sciences
- Christian Academics
- Banaji, Jairus. “Islam, the Mediterranean and the Rise of Capitalism.” Historical Materialism. 15, no. 1 (2007): 47-74.
- Callen, Jeffrey L.; Mindy Morel and Grant Richardson. “Do culture and religion mitigate earnings management? Evidence from a cross-country analysis.” International Journal of Disclosure and Governance. Vol. 8, No. 1 (2011): 103-21.
- Granger, Maury D. and Gregory N. Price. “The Tree of Science and Original Sin: Do Christian Religious Beliefs Constrain the Supply of Scientists?” Journal of Socio-Economics. 36, no. 1 (2007): 144-60.
- Haught, James A. “My God, How the Money Rolls In.” Free Inquiry. 27, no. 1 (2007): 51-2.
- Heftier, Robert W. “Islamic Economics and Global Capitalism.” Society. Vol. 44, No. 1 (2006): 16-22.
- Lindrooth, Richard C. and Burton A. Weisbrod. “Do Religious Nonprofit and For-profit Organizations Respond Differently to Financial Incentives? The hospice industry.” Journal of Health Economics. 26, no. 2 (2007): 342-57.Society. 44, no. 1 (2006): 16-22.
- Renneboog, Luc and Chirstophe Spaenjers. “Religion, Economic Attitudes, and Household Finance.” Oxford Economic Papers. Jan. 27, 2011.
- Roth, Louise Marie and Jeffrey Kroll. “Risky Business: Assessing Risk Preference Explanations for Gender Differences in Religiosity.” American Sociological Review. 72, no. 2 (2007): 205-20.
- Woodberry, Robert. “The Economic Consequences of Pentecostal Belief.” Society. 44, no. 1 (2006): 29-35.