The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands

• BSE Working Paper: 110019 | September 15
• Keywords: economic growth , Protestantism , Culture , Historical Development , Germany
• JEL codes: N13, N33, O11, Z12
• economic growth
• Protestantism
• Culture
• Historical Development
• Germany

Many theories, most famously Max Weber’s essay on the “Protestant ethic,” have hypothesized that Protestantism should have favored economic development. With their considerable religious heterogeneity and stability of denominational affiliations until the 19th century, the German Lands of the Holy Roman Empire present an ideal testing ground for this hypothesis. Using population figures in a dataset comprising 272 cities in the years 1300-1900, I find no effects of Protestantism on economic growth. The finding is robust to the inclusion of a variety of controls, and does not appear to depend on data selection or small sample size. In addition, Protestantism has no effect when interacted with other likely determinants of economic development. I also analyze the endogeneity of religious choice; instrumental variables estimates of the effects of Protestantism are similar to the OLS results.