Church and State: An Economic Analysis

Abstract:     
What purpose is served by a government's protection of religious liberty? Many have been suggested, the most prominent of which center on the protection of freedom of belief and expression. However, since every regulation potentially interferes with religious freedom, it is useful to consider more concrete purposes that could suggest limits on the degree to which religious liberty should be protected. This paper focuses on the concrete economic consequences of state regulation of religion. We examine the effects of state regulation on corruption, economic growth, and inequality. The results suggest that laws and practices burdening religion enhance corruption. Laws burdening religion reduce economic growth and are positively associated with inequality.

Keywords: regulation of religion, economics of religion, corruption, inequality

JEL Classifications: D3, D73, H41, K0, N4, Z12

Working Paper Series