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Why churches need free-riders: Religious capital formation and religious group survival

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  • McBride, Michael

Abstract

Prevailing theory claims that churches thrive when they overcome the free-rider problem. However, this paper argues that religious organizations need free-riders in a dynamic setting. If individuals’ contributions to congregations increase as their exposure to religion increases, then allowing potential members to free-ride temporarily may increase future membership and contribution levels. Free-riders thus comprise a risky but necessary investment by the church. Strict churches screen out riskier investments yet still allow some free-riding, while ultra-strict churches screen out all but members’ children. This new theory yields predictions consistent with stylized empirical facts.

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  • McBride, Michael, 2015. "Why churches need free-riders: Religious capital formation and religious group survival," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 77-87.
    • Handle: RePEc:eee:soceco:v:58:y:2015:i:c:p:77-87
    DOI: 10.1016/j.socec.2015.07.001
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    Cited by:

    1. Carvalho, Jean-Paul & Sacks, Michael, 2021. "The economics of religious communities," Journal of Public Economics, Elsevier, vol. 201(C).
    2. Mark Koyama & Jean-Paul Carvalho, "undated". "Development and Religious Polarization: The Emergence of Reform and Ultra-Orthodox Judaism," Discussion Papers 11/11, Department of Economics, University of York.
    3. Charles Miller, 2024. "Martial races as clubs? The institutional logic of the martial race system of British India," Rationality and Society, , vol. 36(3), pages 345-372, August.
    4. Leonardo Becchetti & Sara Savastano, 2011. "Erratum to: The Money–Happiness Relationship in Transition Countries: Evidence from Albania," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(1), pages 216-216, September.
    5. Daniel M. Hungerman, 2014. "Do Religious Proscriptions Matter?: Evidence from a Theory-Based Test," Journal of Human Resources, University of Wisconsin Press, vol. 49(4), pages 1053-1093.
    6. Leonardo Becchetti, 2010. "The Money–Happiness Relationship in Transition Countries: Evidence from Albania," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(1), pages 39-62, May.
    7. Sriya Iyer, 2016. "The New Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 54(2), pages 395-441, June.
    8. Fan, Jijian & Friedman, Daniel & Gair, Jonathan & Iyer, Sriya & Redlicki, Bartosz & Velu, Chander, 2021. "A simulation study of how religious fundamentalism takes root," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 465-481.
    9. Binzel, Christine & Carvalho, Jean-Paul, 2013. "Education, Social Mobility and Religious Movements: A Theory of the Islamic Revival in Egypt," IZA Discussion Papers 7259, Institute of Labor Economics (IZA).
    10. Carvalho, Jean-Paul & Koyama, Mark, 2016. "Jewish emancipation and schism: Economic development and religious change," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 562-584.
    11. Bukin, Kirill A. (Букин, Кирилл А.) & Levin, Mark I. (Левин, Марк И.), 2018. "Competition in the Regulated Religious Market [Конкуренция На Регулируемом Рынке Религиозных Услуг]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 218-233, February.
    12. Friedman, Daniel. & Fan, Jijian. & Jonathan Gair & Sriya Iyer & Bartosz Redlicki & Chander Velu, 2016. "How Fundamentalism Takes Root: A Simulation Study," Cambridge Working Papers in Economics 1681, Faculty of Economics, University of Cambridge.
    13. Yossi Perelman & Chen Goldberg, 2024. "Untangling expectations and sacrifices: Ultra-Orthodox men in Israel and the religious club model," Rationality and Society, , vol. 36(3), pages 289-311, August.

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    JEL classification:

    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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