Incentives, Predestination and Free Will

Without wholeheartedly endorsing Max Weber's views on Protestantism and economic growth, we present a model formalizing his claim that belief in predestination was a component in economic development. Our model suggests that belief in predestination is more effective when heterogeneity of beliefs is high, when the desire for homogeneity is high, or when accurate signals about ethics are important. Using the General Social Survey, we find that Protestants generally and Presbyterians in particular exhibit a stronger connection between individual and group behavior and between worldly success and church attendance. ( JEL A13, Z10)