Beyond religion and culture: The economic consequences of the institutionalization of sharia law
Lattanzio G.
September 2022Elsevier B.V.
Emerging Markets Review
2022#52
Religious and cultural practices have major implications for a Countrys economic performance. However, it is not clear if the formal institutionalization of these social norms within a countrys legal system causes material economic effects. In this study I show this to be the case. By employing the synthetic control methodology to mitigate endogeneity concerns, I show that the institutionalization of Sharia Law within a Muslim-majority countrys legal system causes material economic costs. Results hold in different settings, confirming that the governmental enforcement of existing social norms constrain individuals social and economic freedom, ultimately resulting in worsened economic outcomes.
Islamic economics and finance , Law and economics , Synthetic control
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Nazarbayev University, Graduate School of Business, Department of Finance, 42 (C3) block, 53 Kabanbay Batyr Ave Nur-Sultan city, 010000900, Kazakhstan
Nazarbayev University
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