Marx meets Weber: The dissolution of communes and the rise of religious public goods in China

Cultural behaviors can be shaped and preserved by economic institutions. We examine the causal impact of the rural decollectivization reform in China that took place after 1978 on the supply of religious public goods. A staggered difference-in-differences model that analyzes the timing of reform implementation in 1,114 counties finds that the reform resulted in a surge in religious activities in religious sites. Further evidence suggests that counties with a lower intensity of the Cultural Revolution (1966–1976) and a larger income growth experienced a greater impact of the reform. Moreover, lineage associations, being more religious and serving as a critical tool in mobilizing individuals, could enhance the impact of the reform. We argue that in the commune system before the reform, the demand for religions as well as its supply were not fully expressed and the reform increased people’s economic autonomy and resources for participating in religious activities. Our study offers a political economy explanation for the rise of religion in China’s economic transition after 1978.