Institutions, Corruption/Prosperity, and Religion (A), (B), (D), (1), (3), (6)

This chapter characterises the relations between religion, institutions, and the transparency–prosperity nexus. It explains how economic prosperity, democracy, and transparency are part of a feedback loop that constitutes a single phenomenon. More importantly, this chapter deepens the institutional analysis by concentrating on the particular historical influence of religion on the different legal traditions in Europe and the Americas. It is the cornerstone of Part 3 and, as such, of the entire book. The Reformation brought forth a wide range of modern institutions. Among these, education and democracy are the most crucial ones for ensuring prosperity/transparency outcomes. Likewise, Protestantism has impacted the secularisation of the state in Protestant countries (and also in Roman Catholics, albeit to a lesser, more indirect extent). Protestantism fosters horizontal power relations and secular-rational attitudes towards authority. Thus, such egalitarian and secular attitudes are linked to greater transparency and prosperity. The Lutheran German Revolution formed the basis of the various later Protestant, dissenting revolutions and legal traditions (i.e. British and American). Some of its concepts (e.g. separation of state functions from the church; state-sponsored education) permeate all modern legal systems to this day and ended the monopoly of Roman canon law. Regardless of the advances made by Roman Catholicism in the Second Vatican Council (Vatican II: 1962–1965), corporatist ideologies remain prevalent, mostly in Latin America. But while Roman Catholic discourse has shifted, the institutional inertia persists and maintains the hierarchical status quo and longstanding feudal structures.