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The purpose of this paper is to examine how rulers by supporting religion influence the growth of human capital and physical capital.

The authors consider a model where the government, on the one hand, sets the output quota transferred to religious activities and workers and entrepreneurs, on the other, choose human and physical capital, which are complementary. The findings of the model are used to interpret some historical evidence.

When a religious denomination puts a strong emphasis on children’s education, the rulers who back religion, may encourage the diffusion of education among the followers of that denomination. Conversely secular rulers may face a religion that they consider a force opposing modernization and may develop a secular system promoting the diffusion of education. In both cases, the diffusion of education triggers the increase in physical capital and economic growth.

The contribution of the paper is to show how religion may be either a progressive force and promote education by contributing to economic growth or present a conservative dimension opposing the diffusion and rise of human capital.