Ifo Viewpoint No. 91: Cuius regio eius religio

Hans-Werner Sinn
Munich, 12 February, 2008

At Christmas Germans show their pious side. Many go to church on Christmas Eve even if the rest of the year they’re too busy. But in church their divisions come through again: 31 percent of the population is Catholic and 31 percent Protestant. Although the Peace of Augsburg of 1555 is nearly half a millennium old, religion is still primarily a matter of residence. Cuius regio eius religio – whose region, his religion – this dictum still holds true today in terms of empirical regularity.

Apart from the conflict over the “true faith”, Protestants were able for some time to believe that they had the better religion since they were economically more successful. Max Weber’s explanation for this is well known. Since Protestants, in particular Calvinists, believed that God’s blessing is upon the economically successful, they tried particularly hard to prove this blessing was theirs with their success vis-à-vis their fellow men. In actual fact, even today average earnings of Protestants in Germany are higher than the average earnings of Catholics, and the Protestant regions are still more successful, on average, than the Catholic regions.

Max Weber derived his findings from the empirical studies made by his student, Martin Offenbacher, in Baden. The positive correlation between success and Protestantism he found was unambiguous. But is this theory, which every schoolchild in Germany is taught, in fact true? Is the Protestant ethic the reason for this correlation?

Sascha Becker and Ludger Woessmann have expressed their doubts. They both work at the Ifo Institute and on the economics faculty where Max Weber’s chair is still located. In a CESifo Working Paper and in a second dissertation (Habilitation) they have thoroughly re-examined Weber’s thesis. They pored over old Prussian data on economic activity, illiteracy and economic performance from the nineteenth century and earlier, digitalising them and examining them for relevant correlations, using the methods of modern econometrics. The differences between the Catholic and Protestant regions of Prussia gave them sufficient empirical material to reach statistically well-based findings.

The result is a new theory on the causality between religious affiliation and economic success that has nothing to do with the Protestant ethic. Instead of the Protestant ethic, it is pure and simple the better education in the Protestant areas that explains the greater economic successes.

Luther wanted the Bible that he had translated into German to be read by the people and for this reason he sought to reduce illiteracy. He instructed the principalities that had converted to Protestantism to build school houses next to the churches, where boys and girls could be educated. He regularly sent out his flock of reformers to oversee the teaching methods of these schools, the very first school inspectors. With this he managed to increase the educational level of the Protestant regions dramatically. The much higher level of education that the Protestant regions still had in the nineteenth century is the reason why these regions industrialised more rapidly and attained greater economic prosperity.

However, there was no Protestant ethic at work here. The authors tested their findings by comparing regions with different religious affiliations but with the same amount of illiteracy. There were not many such regions but enough, since some Catholic rulers also placed importance on a good school education. Here religious affiliation had no influence on economic success. Economic success was attributable exclusively to better education and not to differences in religious affiliation.

To be fair to Max Weber it must be noted that in developing his thesis he was not looking specifically at Lutheran Protestantism but at Calvinism and certain Dutch sects that indeed believed that blessings fell to the industrious. The data from Baden that he used included both Lutheran and Reformed Protestants, who adhered to Calvinism. Nevertheless the work of Sascha Becker and Ludger Woessmann raises considerable doubts about Max Weber’s thesis, and in any case their work proves that in Prussia the Lutheran regions were more successful than the Catholic regions solely on the basis of their better education.

For Catholics this finding may be nothing new, since they have always been suspicious of Max Weber’s thesis. Bavaria, primarily a Catholic state, should be all the more impressed since it has performed particularly well in the PISA tests. Protestants, however, must now take leave of a historical picture that they have taken for granted. Under the Christian tree both religions are identical, and the differences in the market value of the presents – mere earthly possessions – have more to do with the education of the parents than blessings from the Lord.

Hans-Werner Sinn
Professor of Economics and Finance, University of Munich
President of the Ifo Institute

Published as “Cuius regio eius religio", WirtschaftsWoche, no. 52, December 21, 2007, p. 198; also printed in Wiener Zeitung, February 19, 2008, p. 2.