Theory of religious economy: Wikis


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The theory of religious economy is key aspect of the economics of religion. It is an application of rational choice theory to the theory of religion such that supply and demand is used to model the development and success of organized religions.[1]

A religious economy consists of a market (or demand for religion) and a supply of different religious organizations.[1] A competitive free market or economy makes it possible for religious suppliers to meet the demands of different religious consumers. [2] By offering an array of religions and religious products, a competitive religious economy stimulates activity in the marketplace. [2]

According to the theory, religious pluralism gives the population a wide variety of choices in religion and leads to a religious economy in which different religious organizations compete for followers, much the way businesses compete for consumers in a commercial economy. The Theory of Religious Economy takes into account a wide spectrum of issues (e.g., the differences between competitive religious markets and religious monopolies), making this theory one of the most significant developments in the social scientific study of religion during the past thirty years. [3]

The Theory of Religious Economy focuses attention on religious suppliers and whether religious firms have the ability to increase the demand for religion. [3]

Major proponents of the theory include the American sociologist Rodney Stark, William Sims Bainbridge, American economist Laurence Iannaccone, R. Stephen Warner, and Roger Finke. [4]



The theory of religious economy arises from the application of fundamental principles of economics to the analysis of religious organizations. Just as commercial economies consist of a market in which different firms compete, religious economies consist of a market (the aggregate demand for religion) and firms (different religious organizations) seeking to attract and hold clients. [1] The theory of religious economy was developed to explain why and how religions change. [1]

Market situation

As in economics, the market situation can be distinguished as:

  • Monopoly: Monopolies in religion are only made possible through state enforcement and often function on a public scale. When the government establishes a set religion and all other competition is drowned out then "believers are culturally connected but not necessarily spiritually"(Andrew Chesnut) to the religion enforced by the state. Since participation in a religious monopoly is not as important because the church does not have to rely on members for resources they are not forced to provide adequate or marketable "religious products"(Chesnut), due to lack of competition. The ability of a religious organization to monopolize a religious economy is entirely dependent on the extent to which the state governs the religious economy. A monopolized religious economy tends to have lower levels of participation. [5]
  • Prohibition: Some states may categorically ban religious observances, and attempt to sanction those who persist in displaying religious conviction.
  • Disestablishment: Disestablishmentarianism results from state withdrawal from an organization that was originally established under the state.
  • Religious Pluralism: In a free market, or pluralistic religious market, many religious organizations exist and seek to appeal to certain segments of the market. Organizations in a free market cannot rely on the state for resources so they must compete for participation of the religious consumer. Contest among religious firms results in the specialization of products so that consumers are able to distinguish different organization from others(Chesnut). Pluralistic religions operate on a personal scale, marketing more to individual demands as opposed to public. As the majority of the consumer market, organizations market more to women than men. Pluralism is only possible through lack of favoritism by the state.(Chesnut) A competitive and pluralistic religious economy has a positive effect on levels of participation. [5]

Church-sect theory

Originally proposed by H. Richard Niebuhr in his book The Social Sources of Denominationalism, the theory discusses the difference between churches and sects. Niebuhr proposed that there is a cycle which sects and churches follow. Religions originate as sects designed to serve the needs of the deprived. If they flourish, they increasingly serve the interests of the middle and upper classes and are transformed into churches. Once the sects have become churches they become less effective in satisfying the needs of the lower class and the formation of a sect is re-created. [1]

In 1963 Benton Johnson revised the church-sect theory into its current state. [1] Church and sect form opposite poles on an axis representing the amount of "tension" between religious organizations and their social environments. Tension, as defined by Benton Johnson, is "a manifestation of deviance." [1] The tension is described to be between the groups members and the outside world. Churches are described as religious bodies having low tension, whereas, sects have high tension. [1]

Influencing the religious consumer

Theorists argue that, much as a grocery store sells food, religious groups attempt to "sell" beliefs and ideas. They attempt to influence the religious 'consumer' to choose their product. Two important ways to influence believers are morals and fear.



Morals are the concepts of right and wrong. Moral communities are groups within the religious communities in which there is a very high agreement on norms and strong bonds of attachment among members. Moral behaviors of individuals are influenced by their religious commitments only in societies where the dominant organizations give clear and consistent expression to divine moral imperatives.

Religious markets are similar to other markets in that they are social creations. The exchanges that take place in a religious market are regulated by social factors. Elements of social interactions such as norms and morals influence the individual choices and preferences of the religious consumer. Therefore, elements of social interactions influence the types of religious goods offered to consumers in the marketplace and the changes in consumer demands over a span of time. [5]


According to W. Robertson Smith, "The fear of the gods was a motive to enforce the laws of society which were also the laws of morality". People are taught that those who believe will gain rewards or avoid punishment in the afterlife, and non-believers will miss out on the rewards or receive punishment.

Major debates

Religious Economy and Ideology

The idea of religious economy frames religion as a product and as those who practice or identify with any particular religion as a consumer. But when the idea of belief is brought in to the equation, this definition expands, and ideology affects the "product" and who "consumes" it. When examining depictions of religious identity in a global world, it is easy to see how ideology affects religious economy.

Carl L. Bankston III refers to religions and religious groups as "…competing firms [that vie for] customers who make rational choices among available products…" (311). Using a liberal economic(see Economic liberalism) framework for analysis, Bankston is claiming that religions and religious groups’ popularity is dependent on the laws of supply and demand. As a marketplace, religious consumers are subject to things such as marketing, availability of product, resources, brand recognition, etc. But unlike some actual commodity such as a computer, these commodities speak to an individual’s beliefs. Bankston poses the idea that belief deals with ideology and extends beyond what one would typically define as a market good by stating "…belief is produced and resides in communicated thoughts, (and) the consumers of goods of faith can only become consumers by becoming producers, by participating in interactions of belief…" (322).

Where belief exists, ideology plays an important role in the communication and production of a religion. In the context of religious economy, certain ideologies are reinforced and others are rejected due to the access/inaccessibility of specific religious groups. And while religious identity is diverse and often defined on an individual level, religious identity can also be over-simplified as a result of its role as a product in the information age. For example, Samuel Huntington’s work Clash of Civilizations states the following:

"…the fundamental source of conflict in this (post cold-war world) will not be primarily ideological or primarily economic. The great divisions among humankind and the dominating source of conflict will be cultural (i.e. religious). Nation states will remain the most powerful actors in world affairs, but the principal conflicts of global politics will occur between nations and groups of different civilizations. The clash of civilizations will dominate global politics. The fault lines between civilizations will be the battle lines of the future"(1).

He goes on to describe this conflict as a battle between the "Western/Christian" and "Islamic" civilizations. There is however, strong criticism of this theory.

Edward Said is one critic who believes that any cultural analysis is inherently ideological. He believes that cultural analysis of Islam, for example, creates fictitious categories of “West” and “East” and identifies the East as exotic, inferior, and less advanced. He states: “My whole point about this system is not that it is a misrepresentation of some Oriental essence — in which I do not for a moment believe — but that it operates as representations usually do, for a purpose, according to a tendency, in a specific historical, intellectual, and even economic setting” (p. 273).

Religious economy tries to view religion as though it is a matter of products and consumers. But because it deals with individual beliefs, there is the added dimension of ideology. When ideology is applied to the idea of religious economy, many conclusions about religious identity can be drawn. Ideology can over-simplify religious identity, as Said suggests with the case of Clash of Civilizations, but, if anything, it helps us better understand the concept of religious economy.


Prior to the emergence of the theory of religious economy some scholars of religion, such as Steve Bruce[6], believed that modernization would lead inevitably to the erosion of religiosity. These sociologists have predicted the disappearance of religion from Earth, based on the decline in religious belief and observance in Western Europe.[3] According to the theory of religious economy, societies that restrict supply of religion, either through an imposed state religious monopoly or through state sponsored secularization, are the main causes of drops in religiosity. Correspondingly, the more religions a society has, the more likely the population is to be religious. [1] This is refuted in the orthodox view by stating that if a liberal religious community is tolerant of a wide array of belief, then they are less likely to hold certain beliefs in common, so nothing can be shared and reified in a community context. If nothing is shared, then nothing is shunned, and there is thus a loss in observance of modern liberal traditions.[6]


According to Rodney Stark, revival is another aspect of religious change which coincides with secularization. Over time established religious groups will spawn smaller and less worldly sub groups of the faith. This trend of revival provides a plausible explanation why religion never seems to fade away and to why previously prominent religious organizations have dissipated. Revival produces a shift in which religious groups a population will follow and proves effective against the demise of religion. [1]


Unlike a sect which follows traditions from its parent religion a cult presents completely new religious traditions. Cult is simply another word for a new religion and all current religions at one point could have been considered cult movements. The negative connotations on the word cult have led to hostility between these movements and their social environments. Rodney Stark defines the two reactions from secularization being revival and cult formation. As old faiths eventually weaken the rise of different religious sects and cults will prevail. [1]

Growth of strict religions

A set of famous papers in religious economy have spurred debate on how and why new religious groups might be differentially growing depending on the strictness of the doctrine to which adherents are obligated. Why are strict groups growing in popularity in US and around the world? Are less strict groups in decline, or are they simply later in their organizational and demographic life cycles?

Strict regulations to enforce strong ties

Strict Churches are prevalent in the US and around the world and while people still question and debate their ascent, their ties are characteristically defined as being strong within the group with few weak ties branching outside to other groups. Strict churches arise from strict doctrines and can be in many forms such as large churches, sects, or cults but are not limited to these. Churches are most often known for their “cosmopolitan networks, while sects tend to consist of intense local networks,”[7] while this may be true for “unstrict” doctrines this is not always the case for strict doctrines. Strong doctrines can arise from certain sects as various religions have done such as Orthodox Judaism, Islam, certain denominations of Christianity, or can include rather smaller cults or small sects. What all strong doctrines employ though, are formal controls to discourage free riding within the group and to keep the church strong and together.[8] These controls can vary from church to church but all serve the same purpose of keeping group solidarity.

As commonly seen strict churches employ various means of keeping their ties in their church strong while limiting excessive access to other groups such as dress code, eating habits, and rituals that prevent mixing with other groups. The implication of these, “strict demands ‘strengthen’ a church in three ways; they raise overall levels of commitment, they increase average rates of participation, and they enhance the net benefits of membership.”[9 ] Complying with these demands prevent the members of a church from free loading within the group and promote group solidarity. The strict rules that govern and regulate a church actually help and promote the strength of the ties within the group. Those who don’t comply with these strictures are screened out leaving only those who do comply and comply earnestly.”[9 ] These strict doctrines and regulations serve to keep the church strong and together while screening out members that may actually harm the church unintentionally by be free loaders within the group.

Religion in the U.S. compared to other nations

Different nations vary in religious makeup and fervency. Most people in the world are religious. People don't consider themselves as religious if they are not fully involved in the church by contributing money or attending service every Sunday. On the other hand, it is more rare to claim to be an atheist. A country in which atheism is common is China. About 24 percent of the Chinese population claim to be “convinced atheists.”[10] Atheism in China is researched to be a result from Communism which stresses atheism. But, one can not put a title on China as the “atheist country.”

Moral behaviors of individuals are suggested by religious loyalties only in societies where the dominant religious congregations give clear rules to follow moral actions. In US and Europe, the gods are conceived as powerful and judgmental whereas in Japan and China, they are conceived as many, small, and not particularly interested in moral behavior. Therefore, in Japan and China, religion is unrelated to moral actions.

The United States is extremely diverse with high levels of religious participation. The United States maintains a high degree of religious pluralism. Americans tend to contribute more money to their churches compared to other countries. There are an estimated 15,000 denominations in the United States—an extremely free religious economy. Church membership and attendance in the Western United States is lower than the other states.

The United States is much more religiously diverse than other countries, though comparable to Canada. Church membership is relatively high in both countries. Canada is estimated about 61 percent and the United States reported 63 percent.[10] Canada does not have as much religious pluralism as the United States with only a little over 200 denominations existing compared the 15,000 in America.[10] The United States continues to grow at a faster rate than Canada. Compared to the U.S., church attendance in Europe is far lower. For example, in Iceland and Denmark weekly church turnout is less than 4 percent of the population and only 6 percent in Sweden.[10] Europe also has about twice as many cult movements as United States.

Latin America is becoming increasingly more Protestant. 22 percent of the population belongs to Protestant congregations in Chile, 20 percent in Guatemala, and 16 percent in Brazil.[10] With this rapid growth, it is estimated that Protestantism will be the majority in Latin America within the next twenty years. Governments has not been moving against non-Catholics anymore which leaves an open door for religious pluralism to build in Latin America.

Ex-Communist countries

Russia and Eastern European countries have collectively been moving towards atheism. The cause of this may be the collapse of the Soviet Union as well as the communist government imposed by the Russian army at the end of WWII. The communists tried to wipe out all traces of religions in the Soviet Union and Eastern Europe. As a result of this effort, there are only about 5,000 religious congregations of all faiths still in the Soviet Union. This is roughly the same number as currently exist in the state of Kentucky.[10] Even though the communist government thought they had succeeded in destroying religion in their nation, research and data have concluded that atheists are few and far in between in Russia and Eastern Europe.

Research conducted by Paul Froese at Baylor University, examines the prevalence and dynamics of religious beliefs and monopolies post-communism in the former Soviet Union.[11] This study is one area of research of interest to sociologists researching religious economic theory because it observes governmental influence on religious beliefs and affiliations. Prior to the 1980s, the Soviet government imposed religious restrictions on its citizens in hopes that they would come to hold the beliefs of Atheism.[12] The government's intentions were to free its people from the psychological bondage of religion, encouraging the formation of a fully industrialized society. [13]

The Soviet Union remained fairly intact until the 1990s, however, religious restrictions gradually loosened and the people of the Soviet Union began to abandon Atheism in large numbers.[14] According to this study, since the 1970s, 100 million people living in the former Soviet Union have come to affiliate themselves with some religious group for the first time in their lives. [15]

Ex Soviet states have widely divergent levels of religious affiliation. For example, irreligion in Lithuania is 19.4% , while for Estonia this is 75.7%. [16]


  1. ^ a b c d e f g h i j k Stark, Rodney (2007). Sociology (10th Edition ed.). Thomson Wadsworth. ISBN 0-495-09344-0.  
  2. ^ a b Wortham, Robert A. Religious Choices and Preferences: North Carolina's Baskin Robbins Effect? 2004. 27 Sep. 2007. [1]
  3. ^ a b c Young, Lawrence A. (1997). Rational Choice Theory and Religion. Routledge. ISBN 0-415-91192-3.  
  4. ^ Content Pages of the Encyclopedia of Religion and Social Science
  5. ^ a b c Young, Lawrence A. (1997). Routledge. ISBN 0-415-91192-3.  
  6. ^ a b Bruce, Steve (1999). Oxford University Press. ISBN 0-19-829584-7.  
  7. ^ Stark, Rodney (2007). Sociology Tenth Edition. Thomas Wadsworth. ISBN 0-495-09344-0./
  8. ^ Hechter, Michael. Principles of Group Solidarity. University of California Press. ISBN 0-520-06462-3
  9. ^ a b Iannaccone, Laurence R. “Why Strict Churches are Strong” American Journal of Sociology. March, 1994. Issue 5. (1180-1211)
  10. ^ a b c d e f ^ Stark, Rodney (2007). Sociology, 10th Edition, Thomson Wadsworth. ISBN 0-495-09344-0./
  11. ^ Froese, Paul, 'After atheism: An analysis of religious monopolies in the post-communist world' from Baylor University in Sociology of Religion journal 2004: 65 I 57-75
  12. ^ Froese, Paul, 'After atheism: An analysis of religious monopolies in the post-communist world' from Baylor University in Sociology of Religion journal 2004: 65 I 57-75
  13. ^ Froese, Paul, 'After atheism: An analysis of religious monopolies in the post-communist world' from Baylor University in Sociology of Religion journal 2004: 65 I 57-75
  14. ^ Froese, Paul, 'After atheism: An analysis of religious monopolies in the post-communist world' from Baylor University in Sociology of Religion journal 2004: 65 I 57-75
  15. ^ Froese, Paul, 'After atheism: An analysis of religious monopolies in the post-communist world' from Baylor University in Sociology of Religion journal 2004: 65 I 57-75
  16. ^ Source Dentsu Communication Institute Inc, Japan Research Center (2006)


21 Issue 1, p1-12, 13p

  • Content Pages of the Encyclopedia of Religion and Social Science
  • Finke, R. (2008). Is the 'clash of civilizations' really true? The 'religious economy' is a better explanation. Retrieved May 30, 2008, from
  • Froese, Paul, Sociology of Religion, Vol. 65, No. 1, (Spring, 2004), pp. 57-75
  • Hechter, Michael. Principles of Group Solidarity. University of California Press. ISBN 0-520-06462-3
  • Iannaccone, Laurence R. “Why Strict Churches are Strong” American Journal of Sociology. March, 1994. Issue 5. (1180-1211)
  • Lawrence Erlbaum Associates, Inc. - Error Project MUSE
  • Stark, Rodney (2007). Sociology, 10th Edition, Thomson Wadsworth. ISBN 0-495-09344-0.
  • Wortham, Robert A. Religious Choices and Preferences: North Carolina's Baskin Robbins Effect? 2004. 27 Sep. 2007. [1]
  • Young, Lawrence A. (1997). Rational Choice Theory and Religion. Routledge. ISBN 0-415-91192-3.

Further reading

External links


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