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A Political Economy Approach to State Religion and Holy Wars

Author

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  • Auriol, Emmanuelle
  • Platteau, Jean-Philippe
  • Verdier, Thierry

Abstract

We model two autocratic states facing internal and external threats, where religious clerics wield significant influence. Rulers allocate resources between internal security and the military while deciding whether to co-opt clerics to establish a state religion. Coopting reduces the risk of domestic unrest and allows a reduction in policing costs, freeing resources for the army. Surprisingly, equilibria are asymmetric across a wide range of parameters, with one state secularizing when the other adopts a state religion. Yet, in the presence of religious minorities aligned with foreign powers, state religions can become strategic complements, explaining the simultaneous emergence of nationally defined religions in rival states. The theory is illustrated using historical evidence from state formation in Europe and the Middle East.

Suggested Citation

  • Auriol, Emmanuelle & Platteau, Jean-Philippe & Verdier, Thierry, 2026. "A Political Economy Approach to State Religion and Holy Wars," CEPR Discussion Papers 21435, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:21435
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    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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