Allow me to share the following piece, written by Jared Rubin, about the complex links between religion, development, and growth:
https://www.broadstreet.blog/p/religion-and-development
When I finished my PhD in 2012, I started as an Associate Professor at the University of Strasbourg. At that time, I was utterly dissatisfied by the treatment of religious variables, like the share of Muslim population, in the empirics of economic growth. Fortunately, the literature has made progress, and we now have a much more interesting view and comprehension of the complex interaction between religion, development, and growth. See the following JEL article:
Becker, S. O., Rubin, J., & Woessmann, L. (2024). Religion and growth. Journal of Economic Literature, 62(3), 1094-1142. https://www.aeaweb.org/articles?id=10.1257/jel.20231666
In the blog, Jared Rubin presents a recent work written with Sascha Becker, Amma Panin, and Steven Pfaff. I would like to underline the following points.
First, religion may have a persistent impact on economic performance as mentioned in the blog: “Various studies have shown that historical religious phenomena still impact work effort and thrift, human capital accumulation, impersonal prosociality, access to banking and financial institutions, persecution, interethnic cooperation, and much more.”
Second, and that is an important point in my view, the institutions and the political economy are also important. The imbalance between religious institutions and non-religious institutions may create bad incentives that impede on the innovation capacity of a society. In the theoretical works of Bisin and Verdier, we have a possible steady state where the imbalance is so large that the innovation capacity is largely reduced. Innovators are considered heretics, and the bigot religious power would rather not share the political power with anyone else.