Malta's society is becoming increasingly secular. One occasionally comes across claims that this is the result of economic development. It's Mammon that rules, many say. But the nexus between economic growth and secularisation is not that clear, if not outright doubtful. There is reason to believe that religion has a role, through a dynamic interaction between traditional beliefs and evolving economic realities.
Sunday Mass attendance in Malta has experienced a sharp decline, dropping from over 60% in the early 2000s to around 36% by late 2017 according to the Archdiocese of Malta. Attendance is predicted to fall to just 10% by 2040. Meanwhile, a 2025 poll revealed that 10.5% of respondents said that religion was not important for them at all, although it was rated as more important for older respondents aged over 65. Religion was deemed very important for around only 3.4% of respondents aged 18 to 29.
But does church attendance correctly track the importance of religion? "Just looking at measures of individual faith and practice, such as, for example, how often you go to church, might not give you the full picture," according to Benjamin Marx, an assistant professor in Boston University's Department of Economics, with respect to the issue in the United States.
His colleague Eduardo Montero adds that religions can adapt to economic and societal changes. He highlights why religiosity can be resilient amid development. Many people in low-income settings face high volatility. They are exposed to risks, crime, and income shocks, which can be exacerbated if public safety nets are weak. In such contexts, religion offers identity, mutual aid, and a buffer against uncertainty.
Religious membership shapes behaviour and preferences, often reflecting a feedback loop between religious institutions and the communities they serve. This is readily apparent in Malta, with the Catholic Church playing a prominent role with its Dar tal-Providenza, Fr Hilary Tagliaferro's Food Bank at the Millenium Chapel, Fr Marcellino's foodbank in Valletta, Caritas, and the Affordable Housing Foundation. The Church mobilises resources and reinforces cooperative norms through dense networks.
Religious organisations in Malta, as elsewhere, often operate in domains typically associated with the State - welfare, health, and education. Faith-based schools compete with public schools. Whereas rabid secularists attack the Church and religion in general, policy design ignoring religion risks backfiring. Programmes in health, education, or social protection should account for how people interpret illness, causation, and risk, which in people's minds are somehow connected to their spirituality. Research in many countries has shown that even efforts to promote 'modern medicine' have to grapple with religious and cultural logics to be effective.
Religion has long been a strong element in human existence, including economic decision-making. Research by Niclas Berggren, Associate Professor at the Stockholm School of Economics, revealed that religion may influence individual behaviour in a variety of ways, including crime, health, and participation in social activities. The influence of religion on everyday life can have both positive and negative consequences.
My opinions in this paper often address economic issues, when I refer to models of economic growth depicting physical capital, human capital, population, labour, and productivity as determinants of economic growth. I would suggest that religion and spirituality - as some of the most ubiquitous social phenomena - can spur or impair economic growth by affecting each of the said elements.
Max Weber, a German sociologist, historian, jurist, and political economist, was one of the first to write about these links. In fact, in 1904 he proposed his 'Protestant ethic' hypothesis in which he posited the role that religion plays in either enhancing or retarding economic growth. Since then, his hypothesis has been supported by data and analytical frameworks which have contributed to our understanding of how religion affects growth.
Sascha O. Becker and others have published a paper under the auspices of the IZA Institute of Labour Economics, where they report clear evidence that religion has affected growth by promoting or hindering the accumulation of physical capital through the centuries. Key examples of how religion affects financial development include restrictions on interest in Christianity and Islam, with consequences for the matching of saving to capital investment.
While there is some indication that, as argued by Max Weber, a Protestant ethic may have boosted thrift and saving, the overall evidence on this is mixed. On the other hand, there is plenty of evidence that religion affects growth by influencing human capital. In addition, examples from Judaism and Protestantism show that religious norms, practices, and institutions have led to a substantial accumulation of secular education in the mass population. However, when religious content takes precedence over secular education, it often detracts from the generation of economically useful knowledge. Islamic education, Catholic resistance to the industrialisation, and Ultra-Orthodox Judaism offer examples where religious education impeded long-run growth.
It has been no different in Malta, where the Catholic Church's clergy and the Establishment left people in ignorance, looking at the spread of knowledge as subversive. It took the courage of Manuel Dimech in the late 19th century to criticise the Church for its retrograde views on education, the role of women, and freedom of thought and advocate strongly for reform.
Religion can shape a society's demographic patterns as well. This can affect economic growth by favouring a higher fertility rate, by hastening or delaying a country's demographic transition, or by affecting health-related mortality. For example, there is evidence that secularisation and a turn away from religiosity may have been an important factor for the very first demographic transition in France. Could this have also contributed to the sharp decline in fertility in Malta?
Although studies on these links in Malta are lacking, there is no doubt that the decline of the Church's dominance has had a positive impact on female emancipation and participation in the labour force, a negative impact on the fertility rate ̶ though slightly offset by greater willingness to consider IVF ̶ and on less rigid attitudes towards abortion and euthanasia.
One of the most important channels of the role of religion for growth appears to be the shaping of norms and institutions that impact education, and in particular the importance of science, the emergence of growth-promoting institutions, innovation, and technological change. The evidence on religion and education from other countries has uncovered a crucial distinction between education that builds economically valuable skills and one that does not.
Religious education might hamper economic development. New technologies alter man's relationship with the physical world, and this may contradict religious beliefs. Religious prohibitions of productive activities or technologies can have a detrimental effect on productivity. On the other hand, religious tolerance can favour technology utilisation by offering opportunities to those who would not otherwise innovate. The emergence of AI and robotics is posing new challenges in this respect.
In his book "A Culture of Growth: The Origins of the Modern Economy", the American Israeli historian Joel Mokyr suggests that the relative scarcity of innovation in certain countries ̶ in spite of relatively high levels of human capital ̶ resulted from ingrained religious beliefs which weren't receptive to scientific innovation and industrial capitalism. Such beliefs are strengthened via religious education.
One mechanism through which religion affects growth is via its impact on the productive capacity of a society (TFP). Religious rituals can affect productivity one way or the other by shaping cultural norms and economic behaviour: in Malta's one can quote fasting during lent in the old days, or the closing of retail establishments on Sundays prior to 1994, or in the case of religious feasts that now attract large numbers of tourists.
A funny example of the influence of religion on economic production was the incident relating to the filming of Anthoiny Newley's musical "Can Hieronymus Merkin Ever Forget Mercy Humppe and Find True Happiness? in 1969. In the film, Merkin (played by Newley himself) is an internationally successful singer approaching middle age who retells his life story in a series of production numbers on a seashore (Ramla Bay in Gozo) in front of his two toddlers and aged mother. Newley explored Merkin's promiscuous relationships with women, particularly Polyester Poontang (Joan Collins) and the adolescent Mercy Humppe (Connie Kreski).
The filming had to stop when Gozo's Bishop, Giuseppe Pace, protested with the Prime Minister about the nude Joan Collins and the love scenes being "witnessed" by the statue of Our Lady of Hope, which holds sway over the beach. The authorities were terrified that the incident would imperil the beginnings of the filming industry in Malta. The impasse was solved in a hilarious typically Maltese fudge: the government sent workers to turn the statue round, so that Our Lady would not witness the nude body of Hollywood's Golden Age badass.
The big elephant in the room in Malta was the inordinate role religion played in legitimising political rule. For a long time, the Church and the clergy were aligned with the ruling class and actively participated in politics. Manuel Dimech railed against this and was punished for it. Seven decades later, Archbishop Gonzi fought the Labour Party's secularisation politics and actively swung elections against it. This had all sorts of unintended consequences, including the distancing of thousands of people from the Church and its diktats. Arguably, the confrontation had implications for economic growth, as the interests of religious authorities and the mechanisms of religious politics caused a large section of the population to start putting prosperity before religious beliefs.
Fast forward to 1999 and we had a very interesting study by Mario Thomas Vassallo, a University of Malta professor, about "Religion and Social Cohesion in Malta: Does it really matter?" Vassallo found that, though 91.5% of students believed in God, 48.7% did not consider the Church as having an influence on work-related issues, and 40% declared that the church did not influence them at all.
Though research in Malta is very thin, there is no reason to believe that religion does not affect economic decision-making in our country as in others, including on ideas about wealth and poverty, risk and uncertainty attitudes, preferences for specific sorts of investments, and moral and ethical issues inherent in economic decisions.
Frans Camilleri is an economist. He studied at Oxford and University of East Anglia, is a former corporate head at Air Malta, and has served on various public and private boards.