The lender's curse: A new look at the origin and persistence of interest bans in Islam and Christianity.

摘要

It is well known that the economic and institutional development of the Middle East and Western Europe has diverged greatly over the last millennium. Until recently, most scholars attributed this divergence to the "conservative nature" of Islam. This dissertation departs from this scholarship by analyzing the institutional determinants underlying the emergence and persistence of economically inhibitive religious norms, a crucial avenue through which religion has contributed to this divergence. I concentrate my analysis on a specific norm, bans on taking interest. I begin by accounting for the origin of the Christian ban, employing a game theoretic analysis and historical evidence to suggest that the Church's commitment to providing social insurance for its poorest constituents---who primarily borrowed for consumption---encouraged over-borrowing, which the Church attempted to limit by banning interest. Next, I analyze economically inhibitive religious norms (e.g., interest bans in economies where investment lending is prominent), which have frequently persisted in Islam but not in Christianity. I argue that the salient exogenous difference between Christian and Islamic institutional structures is the greater degree of overlap between the religious and the politico-legal authorities in the latter. I employ a general model examining the basic tension between a politico-legal authority, which has incentive to maximize the welfare of the laity, and a religious authority, which has incentive to uphold its "eternal" doctrine. When the degree of overlap between the authorities is large, this tension diminishes and there exists less incentive for the laity to "push the envelope" and pressure the religious authority to re-interpret its doctrine. I suggest that this institutional difference entailed that economically inhibitive norms were more likely to become self-enforcing in the Muslim world, hence providing an appearance of conservatism. Islamic conservatism was thus a result, and not a cause, of the region's institutional structures. The final chapter presents a case study surveying the progression of interest theory and its practice in Islam and Christianity. I analyze these histories in the context of the model, substantiating its primary claims while providing unique insight into the institutional determinants underlying the interest ban's persistence in Islam and dissipation in Christianity.