Regulation, Pluralism, and Religious Market Structure

At the macro level, the economics of religion implies that religion will be more vibrant where it is less regulated and hence more competitive. Recent attempts to support this hypothesis are weakened by the use of religious pluralism as a proxy measure for the extent to which the religious market is subsidized or regulated. This article extends the analysis of religious market structure by measuring directly the regulation of religious markets in 18 Western democracies. The analysis provides strong support for the hypothesized connection between religious competitiveness and vitality. The results show that (a) the relationship between subsidized religion and religious participation holds in both Protestant and Catholic countries and (b) its explanatory power is far superior to that of religious pluralism alone. However, certain features of the results suggest that the “economics of religion” should be supplemented with noneconomic variables to achieve adequate sociological explanation.