EconPapers    
Economics at your fingertips  
 

THE POLITICAL ECONOMY OF BELIEFS: WHY FISCAL AND SOCIAL CONSERVATIVES/LIBERALS COME HAND-IN-HAND

Jo Lind () and Daniel Chen

No 606, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: Religious groups with greater within-group charitable giving are more against the welfare state and more socially conservative. We propose and test a model where religious provision of social insurance explains why fiscal and social conservatism align and where church-state separation is key. We present new evidence that the alignment disappears with a state church and it reverses for members of a state church. The model further suggests a novel explanation for religious movements and why church-state separation arose in the U.S. but not in many European countries. Elites increase church-state separation to create a constituency for lower taxes, if religious voters exceed non-religious voters. Otherwise, elites prefer less church-state separation in order to curb the secular left. Multiple steady states arise where some countries sustain high church-state separation, high religiosity, and low welfare state, and vice versa. We document a causal link between church-state separation and fiscal and social conservatism using a time-series of U.S. Supreme Court decisions and instrumental variables estimates using random variation in U.S. Circuit Court decisions on church-state separation. The causal link is corroborated through differences-in-differences-in-differences analyses at the individual-level using a panel of Scandinavian voters followed before and after Sweden’s separation of church and state.

New Economics Papers: this item is included in nep-pbe
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://economicdynamics.org/meetpapers/2016/paper_606.pdf (application/pdf)

Related works:
Working Paper: The Political Economy of Beliefs: Why Fiscal and Social Conservatives/Liberals (Sometimes) Come Hand-in-Hand (2016) Downloads
Working Paper: The Political Economy of Beliefs: Why Fiscal and Social Conservatives/Liberals (Sometimes) Come Hand-in-Hand (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:606

Access Statistics for this paper

More papers in 2016 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2019-11-17
Handle: RePEc:red:sed016:606