Religion or Knowledge Diffusion: a Protestant Economic History of China, 1840-1920

We provide an account of how Protestantism promoted economic prosperity in China—a country Weber ruled out for the development of Protestantism and capitalism. Using prefectural-level data from 1840-1920, a period when China was forced to open up to the West and experienced an early phase of capitalist development, we exploit the outcome of the Boxer Uprising to identify the causal effect of the subsequent diffusion of Protestantism on economic outcome. The seeming relationship between Protestantism and greater economic prosperity disappears once we control for the two channels through which knowledge was transmitted to the Protestant prefectures. The first pertains to the introduction of a Western primary education, whereas the second concerns practices of Western medicine. In contrast, the religious endeavors, most notably the erection of Bible schools, had no distinctly identifiable effect on economic prosperity.