By Elisha Pulivarti, U.S.–India SME Council, Inc.
Religious freedom is often framed as a moral or human rights issue. Increasingly, however, global research shows it is also a powerful driver of economic growth, competitiveness, and long-term prosperity.
Studies consistently demonstrate that countries with higher levels of religious freedom—marked by low government restrictions and minimal social hostilities—outperform others on key indicators of economic development. These nations attract greater investment, foster innovation, and experience more stable and sustainable growth. The United States, much of Europe, Singapore, and several other economies illustrate this pattern.
By contrast, restrictions on religious freedom are closely linked to negative social and economic outcomes. Higher levels of religious hostility and government interference correlate with increased violence, reduced foreign investment, weakened institutions, and economic stagnation. Entire sectors can be disrupted when social trust erodes and instability rises.
Research examining global economic performance finds that religious freedom is not merely associated with prosperity—it is one of the strongest predictors of growth. Empirical modeling shows it to be one of only three statistically significant predictors of GDP growth worldwide, even after accounting for political, social, and economic variables. Notably, ten of the twelve pillars of global competitiveness identified by the World Economic Forum are stronger in countries with low religious restrictions and low social hostility.
The benefits extend beyond national economies into the corporate sphere. Organizations that respect religious diversity and accommodate employees’ beliefs consistently report higher morale, lower legal risk, and greater stakeholder trust. These factors translate into improved retention, stronger productivity, and enhanced reputational standing in the marketplace.
New research further reinforces these findings. A 2025 study by Professor Min Maung, “Do State Relations Affect Entrepreneurial Financing? A Cross-Country Analysis,” uses updated data and advanced econometric methods to confirm a positive and measurable relationship between religious freedom and economic outcomes. Countries that improve religious freedom see gains in foreign investment, entrepreneurship, innovation, and sustainable development.
The research identifies several mechanisms through which religious freedom supports growth. First, it builds trust and social capital across diverse communities, reducing transaction costs and encouraging cooperation. Second, it lowers the risk of conflict and instability, making economies more attractive to domestic and international investors. Third, it supports entrepreneurship and the free exchange of ideas—critical ingredients for innovation, particularly in emerging markets.
Importantly, religious restrictions and hostility remain significant barriers to economic progress. The evidence suggests that religious freedom is not simply correlated with economic success; it is a causal factor that enables societies and businesses to thrive.
For business leaders and policymakers, the implications are clear. Investment and expansion decisions should take religious freedom into account as a strategic consideration. Inclusive workplace policies that respect religious expression improve performance and resilience. Operating in environments with high religious restrictions increases legal, reputational, and operational risks. At a broader level, businesses that support religious freedom contribute to more stable, innovative, and prosperous societies.
The growing body of evidence leaves little doubt: religious freedom is good for business and good for society. As research continues to validate these conclusions, leaders across sectors must recognize religious freedom not only as a human right, but as a strategic economic asset. Protecting and promoting it lays the groundwork for sustainable growth, social stability, and shared prosperity.
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