The economics of religious regulation: an Austrian contribution

Abstract The economics of religion is a growing subfield, yet no paper has connected its findings to Austrian economics. Three Austrian insights are complementary with the current literature and provide a unified theoretical framework for understanding the relationship between religion and religious regulation. By “religious regulation,” we mean attempts at hierarchical religious control by the state. First, government interventions and regulation of religious communities entail the same knowledge problems that beleaguer regulation of markets. Second, Austrian market process theory explains how religious club goods adapt to government interventions. Third, Austrian dynamics of interventionism explain why religious regulations rarely achieve planners’ intended outcomes, and how those outcomes are used to justify harsher religious regulations. We conclude with future avenues of research that pair Austrian insights with the current economics of religion literature.