A theory of the Islamic revival

Working paper

There has been a dramatic surge in Islamic participation and values since the 1970s. We propose a theory of the contemporary Islamic revival based upon two forms of relative deprivation - envy and unfulfilled aspirations. To analyze these motivations, a behavioral model of religion is developed in which agents have reference-dependent preferences. We demonstrate that raised aspirations, low social mobility, high income inequality and poverty are intimately related, not separate causes of a religious revival. As such, the origins of the Islamic revival are traced to a combination of two developments: (1) a growth reversal which raised aspirations and led subsequently to a decline in social mobility which left aspirations unfulfilled among the educated middle class, (2) increasing income inequality impoverishment of the lower-middle class. The sexual revolution in the West and rapid urbanization in Muslim societies intensified this process of religious revival.

Authors: Carvalho, J

• Publication status: Published
• Publisher: University of Oxford
• Series: Department of Economics Discussion Paper Series
• Publication date: 2009-03-01
• Paper number: 424
• Keywords: inequality; reference-dependent preferences; endogenous preferences; economics of religion; Islamic revival; relative deprivation