Working Paper: NBER ID: w16964
Authors: Gordon H. Hanson; Chong Xiang
Abstract: In this paper we build a model of market competition among religious denominations, using a framework that involves incomplete contracts and the production of club goods. We treat denominations akin to multinational enterprises, which decide which countries to enter based on local market conditions and their own "productivity." The model yields predictions for how a denomination's religious doctrine and governance structure affect its ability to attract adherents. We test these predictions using data on the foreign operations of US Protestant denominations in 2005 from the World Christian Database. Consistent with the model, we find that (1) denominations with stricter religious doctrine attract more adherents in countries in which the risk of natural disaster or disease outbreak is greater and in which government provision of health services is weaker, and (2) denominations with a decentralized governance structure attract more adherents in countries in which the productivity of pastor effort is higher. These findings shed light on factors determining the composition of religion within countries, helping account for the rise of new Protestant denominations in recent decades.
Keywords: Christianity; Governance; Doctrine; Globalization; Religious Denominations
JEL Codes: F23; H4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Stricter religious doctrine (Z12) | More adherents (Z12) |
| Stricter religious doctrine (Z12) | More adherents in countries with higher risk of natural disasters or disease outbreaks (H84) |
| Decentralized governance structure (H77) | More adherents (Z12) |
| Decentralized governance structure (H77) | More adherents in countries with better communication and transportation infrastructure (L96) |