Urbanization, Religiosity and Prosperity

Urbanization and economic prosperity are strongly correlated as the following visualization shows. In most countries with a GDP per capita higher than USD 30,000 in PPP terms more than 60% of the population live in cities.

That’s why many economic plans are focused on urbanising a nation. Rural folks whether in China, U.S., India or Malaysia are worse off than their urban counterparts in cities because of opportunities. The rural-urban divide can be bridged by focused sector development, connectivity and/or cash transfers.

Another interesting phenomenon observed was the link between religiosity and prosperity.

A survey asked the question “How important is religion in your life?” and the possible answers were “very important”, “somewhat important”, “not too important” and “not at all important”. The following chart plots the share that answered “very important” against the average prosperity of the population for each country in the survey.

There is a clear correlation between poverty and religiosity. In poor countries the huge majority say that religion is very important in their life: in countries like Uganda, Pakistan, and Indonesia it is the answer of more than 90%. In Ethiopia it is the answer of 98% of the population. In Malaysia it was 84%.

In richer countries the share of the population for whom religion is very important is much lower. In the UK, South Korea, Germany, or Japan it is less than 1 in 5 for whom religion is very important.

The big outlier in this correlation is the USA, a very rich country in which more than 50% answered that religion is very important in their life.

Although it may look like a trade-off (between religiosity and prosperity), the U.S. has proven otherwise. That is hope for those believers in God. Without God, many nations especially the communist ones have questionable ethics on commercial transactions.

The motive to generate more revenue/profit overrides safety standards, human rights and acceptable norms. This was the case of baby food contamination, corrupt regulators and morally repugnant business practices.

When the “fear of God” is real, then business ethics and good commercial practices may follow. That balance is what nations must strive for.

Reference:

Economic Growth, Max Roser, 2013