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The Competitiveness Challenge for Secondary Capitals
The chapter discusses the economic logic and political incentives that led to the emergence, peak, and contraction of Kulturkampf in the Catholic lands of Prussia between 1871 and 1878. It argues that Bismarck’s Kulturkampf reveals the fallacies of secularism as a series of enforced state policies: (1) De facto dominance of the religious majority over religious minorities that are in much higher need to preserve their public and social status; (2) Transformation of priests into bureaucratic experts. A game-theoretic model defining Kulturkampf as a static game between priests and the executive is proposed. The willingness of priests to accept the government’s offer and be transformed into bureaucratic experts varies. Individualist priests are easier to recruit as they care more about their personal welfare than social distribution by the Church, whereas the reverse holds for collectivist priests. Nevertheless, the success of the Kulturkampf depends on the effective recruitment of collectivist priests and their entry into formal politics in favor of the executive. The distinction between collectivism and individualism matters here, because priests can either care for the social welfare activity of the Church or their individual welfare. Secularization is not devoid of religion, as it consistently attracts more individualist rather than collectivist priests, and thus advocates a transition to more Protestant forms of government.
There are strong linkages between religion, bureaucratic organization, citizen preferences, and political regimes. The views of Lipset and Rokkan, Marx, Lukacs, Marcuse, Adorno, Weber, and Durkheim are discussed. The choice of these thinkers relates to the three grand themes that are discussed in the book: (1) The linkage between religion and political regimes in terms of social welfare expectations by the electorate, surveillance incentives, and collectivist distribution by bureaucrats; (2) The religious traditions that shape the administrative structures of local or regional communities; and (3) The different levels of policy discretion, administrative monitoring, and centralization that correspond to different sets of religious norms adopted by citizens and bureaucrats. The critique of conventional social theory treats religion in its key dimensions: as state structure, party cleavage, and social welfare.
The chapter argues that religion matters for the provision of public goods. Three normative foundations of Eastern Orthodox monasticism with strong economic implications are identified: (1) Solidarity; (2) Obedience; and (3) Universal discipline. A public goods game with a three-tier hierarchy is proposed and solved, in which these norms are modeled as treatments. Obedience and universal discipline facilitate the provision of threshold public goods in equilibrium, whereas solidarity does not. Empirical evidence is drawn from public goods experiments run with regional bureaucrats in Tomsk and Novosibirsk, Russia. The introduction of the same three norms as experimental treatments produces different results. The study finds that only universal discipline leads to the provision of threshold public goods, whereas solidarity and obedience do not. Unlike in Protestant societies, in Eastern Orthodox societies free-riding occurs at lower rather than higher hierarchical levels. Successful economic reforms in Eastern Orthodox countries start with the restructuring of the middle- and lower-ranked public sectors. Authoritarian persistence is defined by the commitment of the dictator to overprovide public goods.
The Genesis of Democracy and Dictatorship
The chapter analyses the effects of religious identity – defined both as personal identification with a religious tradition and evaluation of a central religious institution – on attitudes toward centralization. It explores whether religious citizens are more likely to evaluate their government positively than atheists. It also tests whether adherence to conservative norms of governance lead to a positive evaluation of government. Surveys conducted in Russia and Israel provide a mosaic of three major world religions – Judaism, Christianity, and Islam. The information gathered provides a study of the role of the Russian Orthodox Church, the Chief Rabbinate in Jerusalem, the Jerusalem Islamic Waqf, and the Greek Orthodox Church of Jerusalem toward the centralized provision of public goods. The study finds strong support for the proposition that religious identity and conservative norms of governance reinforce positive evaluations of government. It also reveals that personal religious identity increases positive attitudes toward local government, while institutional religious identity consolidates positive perceptions of government at both central and local levels.
Weber considered the Protestant work ethic the foundation of modern capitalism. The chapter extends Weber’s theory by arguing that states with predominantly Roman Catholic, Eastern Orthodox, and Muslim populations have had a stronger inclination toward underdevelopment and dictatorship than states with Protestant or Jewish majorities. This is the case because their respective religious collectives (monastery, tariqa) promote the hierarchical provision of common goods at the expense of market incentives. The chapter defines the aforementioned three religions as collectivist, in contrast to Protestantism and Judaism, which are defined as individualist. The chapter provides a historical overview that designates the Jewish kibbutz as the collective of democracy and the Eastern Orthodox monastery as the collective of dictatorship. Focusing on collectivist economies, it is revealed that modernization, as a credible commitment to the improved future provision of public goods, occurs when the threat of a radical government is imminent and when the leader has high extraction of rents from the economy. The emergence of radical governments is more likely in collectivist than in individualist economies. Historical illustrations from collectivist economies include the Russian Revolution, the Islamic Revolution in Iran, and the postwar welfare state in Western Europe.
In this chapter, the central lines of analysis developed in the book as a whole are introduced. The main engagement offered is with literatures on international organisations where the ‘constrained experimentalist’ model of operational change offers an extension to existing studies. In addition, findings over the difficulties of securing progressive outcomes through market-based mechanisms in regulatory states of the global South, and over mismatches between visions of the post-Washington Consensus and recent World Bank practice, are outlined.