Economic Explanations Of Church Strictness

In what circumstances will a church become more liberal and less strict? That is the question addressed in new research by Pedro Pita Barros and Nuno Garoupa, published in the latest issue of the Economic Journal. Their analysis suggests that:

  • Dominant (or ''monopolistic'') churches like the Church of England tend to be more liberal than religious denominations that are operating in highly competitive markets, e.g. the main churches in Southern Europe, Brazil and the United States. Religious ''markets'' with significant ''barriers to entry'' (perhaps due to government regulations or to lack of capacity – e.g. low population) protect dominant denominations and alleviate competitive pressures.
  • A more liberal trend in church strictness can be the outcome of a change from virtually compulsory to voluntary membership, and not necessarily a consequence of a change of individual preferences. Once individuals may freely choose between religious membership and non-participation in the religious market, a pressure for liberalising church strictness is created.
  • But a liberal trend creates tension with more conservative affiliates. Eventually, more conservative affiliates create a new religious denomination (e.g. Christian sects) and thus limit the ability of a mainstream denomination to become more liberal. The result is that the number of denominations in the religious market tends to increase and thus more people may in fact participate in religion than when there is only one denomination.

Many commentators talk about the secularisation movement and how religious behaviour and beliefs are becoming less important in the modern world, particularly in the West. The collapse of religious practice, first in Southern Europe in the late 1970s and then in Ireland and Poland in the 1990s, seems to be evidence of that. Yet empirical research has repeatedly proven secularisation to be false: in the United States, for example, the religious market is, in fact, booming.

This research provides a new explanation for a well-documented apparent contradiction between the trend to secularisation and the growth of religious movements. The analysis focuses on the interplay between the distribution of preferences for church strictness across the population and the degree of competitiveness of the market for religion. It also explains why being a conservative church (e.g. the Roman Catholic Church) could be the optimal response to the trade-off between trying to keep more liberal affiliates and risking schism with the more conservative affiliates.

The Roman Catholic Church faces more competitive pressure than most denominations because it is present in multiple markets around the world, whereas most denominations are local or are present in fewer markets. The Roman Catholic Church cannot be liberal in one country and very conservative in another. The consequence is that the Roman Catholic Church is being pushed to become more liberal in Western Europe, but the effect is offset by the growing (potential or actual) competition from stricter sects in the United States and South America. At the same time, the Roman Catholic Church has developed various strict monastic orders and less strict lay movements in order to alleviate this tension.

The research also provides a new interpretation for historical events. For example, it suggests a novel explanation for the great East-West 1054 schism. The Western Catholic Church was by then a monopoly whereas the Eastern Catholic Church was faced with stiff competition from Muslims and local Greek minor religious movements.
The researchers argue that while the West could embrace a conservative programme since nobody really disputed the authority of the Pope, the East could not do so without risking the loss of affiliates and vassals. Thus, separation was inevitable as a result of two completely different ''market structures''.

The researchers take the view that religious denominations are benevolent and care about aggregate welfare of their members. Nevertheless, they cannot become less strict, as many members would like, due to competition. The rationale is that more liberal individuals tend to leave the religious market rather than create another denomination, but more conservative affiliates pose a more serious challenge because they may, in fact, create a new denomination.

''An Economic Theory of Church Strictness'' by Pedro Pita Barros and Nuno Garoupa is published in the July 2002 issue of the Economic Journal. The authors are at the Universidade Nova de Lisboa, Portugal, and Research Fellows of the Centre for Economic Policy Research.