Believing in witchcraft is a salient feature of daily life in many parts of the world. In worst-case scenarios, such beliefs lead to murder, and they may also cause destruction of property or societal ostracism of the accused witches. The first large-scale economics study to explore beliefs in witchcraft, broadly defined as the use of supernatural techniques to harm others or acquire wealth, links such beliefs to the erosion of social capital.and
Where witchcraft beliefs are widespread, American University Economics Professor Boris Gershman found high levels of mistrust exist among people. Gershman also found a negative relationship between witchcraft beliefs and other metrics of social capital relied upon for a functioning society, including religious participation and charitable giving.
It's long been argued that witchcraft beliefs impede economic progress and disrupt social relations, and Gershman's statistical analysis supports that theory.
"Witchcraft beliefs are likely to erode trust and cooperation due to fears of witchcraft attacks and accusations. The evil eye leads to underinvestment and other forms of unproductive behavior due to the fear of destructive envy, where envy is likely to manifest in destruction and vandalism involving those who own wealth," Gershman said.The research behind this is Boris Gershman, Witchcraft beliefs and the erosion of social capital: Evidence from Sub-Saharan Africa and beyond, Journal of Development Economics (2016).
A summary of the paper is available here.