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Why Churches Need Free-riders: Religious Capital Formation and Religious Group Survival

Author

Listed:
  • Michael McBride

    (Department of Economics, University of California-Irvine)

Abstract

According to existing theory, religion thrives when groups overcome the free-rider problem in the production of religious goods. This paper explains, however, that allowing some free-riding is necessary in a dynamic setting. If an individual only contributes when she has high religious capital, and if capital only forms after exposure to the religious good, then a church must allow her to temporarily free-ride in order to turn her into a future contributor. Free-riders comprise a risky but necessary investment by the church. Strict churches screen out riskier investments yet still allow some free-riding. This explanation yields predictions consistent with the empirical evidence.

Suggested Citation

  • Michael McBride, 2007. "Why Churches Need Free-riders: Religious Capital Formation and Religious Group Survival," Working Papers 060722, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:060722
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    Cited by:

    1. 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.
    2. Brendan Brundage & Dan McGee & Daniele Tavani, 2026. "Theoretical Approaches in Stratification Economics," NBER Chapters, in: The Economics of Race and Stratification, National Bureau of Economic Research, Inc.
    3. 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.
    4. 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.
    5. 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.
    6. Carvalho, Jean-Paul & Sacks, Michael, 2021. "The economics of religious communities," Journal of Public Economics, Elsevier, vol. 201(C).
    7. 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.
    8. 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).
    9. Sriya Iyer, 2016. "The New Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 54(2), pages 395-441, June.
    10. 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.
    11. 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.
    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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    Keywords

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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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