The Impact of Religious Legitimacy on Economic Governance

My guest today is Jared Rubin of Chapman University. He is the author of Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not, which is our topic for today.

The book deals with the question of why Western Europe became wealthier than the Middle East after centuries of being poorer. The book is part game theoretic model of society, part historical narrative through the lens of that model.

The model considers two main factors: the state's power to coerce and its need for political legitimacy granted by elites. Importantly, different groups have been the ones to grant legitimacy to the state in different times and places. In the Muslim world, religious leaders primarily played this role, as they did in Europe prior to the Reformation.

After the Reformation, however, the power of the Catholic Church was much diminished in many parts of Europe. Rulers in places like England and the Dutch Republic turned to economic elites to grant them legitimacy. This gave the merchant and capitalist classes a seat at the bargaining table, setting the stage for the Industrial Revolution.