Pre-colonial Religious Institutions and Development: Evidence through a Military Coup

This paper offers a novel illustration of the political economy of religion and development by empirically examining the impact of religious shrines on development. Compiling a unique database covering the universe of holy Muslim shrines across Pakistani Punjab, we show that historically embedded religious power shapes persistent differences in literacy. Using the 1977 military take-over as a universal shock, our difference-in-differences analysis suggests that areas with a greater concentration of shrines recognized by the British colonial administration experienced a substantially retarded growth in literacy. We argue that this literacy disadvantage in shrine-dominated regions is largely attributable to a growingly prominent role of shrine elites in electoral politics and their direct control over allocation of public goods since the 1977 military coup. Our analysis suggests that shrines in these regions represent the confluence of three forces—religion, land and politics —that together constitute a powerful structural inequality with potentially adverse consequences for development.