Faithful Incentives

Over the past couple of decades, analysts studying such religious movements as the "consciousness reformation" and the revival of fundamentalism have often assumed they are rooted in changing religious preferences among large groups of people. Yet an article in the April 1997 issue of Economic Inquiry suggests that government policies affecting supply and demand play a role as well. In "Deregulating Religion: The Economics of Church and State," economist Laurence Iannaccone of Santa Clara University and sociologists Roger Finke of Purdue University and Rodney Stark of Washington University analyze several cases.

The emergence of the 1970s consciousness reformation in the United States, which featured the rise of such Asian-inspired "cults" as the Unification Church and the Hare Krishnas, typically has been attributed to the willingness of young adults in the baby boom generation to challenge Western materialism, individualism, and rationalism. Iannaccone and his co-authors instead find a cause for the flowering of Asian religions in the Immigration and Nationality Act Amendments of 1965, which sharply increased the number of Asian immigrants.

And while many observers have blamed economic frustration or reactionary sentiments for the fundamentalist revival of the 1970s and 1980s, the authors instead cite a relaxation of Federal Communications Commission rules. Before 1960, the FCC considered blocks of time a station donated to religious organizations part of a broadcaster's "public service" requirement when deciding whether to renew a station's license; air time purchased by religious groups, however, didn't count. After 1960, the FCC stopped giving preferential treatment to donated religious programming. Broadcasters responded by selling time to the highest bidder, which hurt complacent mainstream denominations and aided charismatic televangelists who could rely on listener contributions.

Most significantly, Iannaccone and his colleagues find that as the level of religious competition in a country increases, church attendance also rises. In Sweden, for instance, the church is state-run, Swedes automatically become church members at birth, and church employees work for the government. While 95 percent of Swedes retain church membership, and 70 percent have their children baptized in the church, only 2 percent attend Sunday services. "The Established Church is like a post office," says the bishop of Sweden. "People don't rush to it when it opens….They are just happy it's there."