Among 188 countries, 72 had no state religion in 2000, 1970, and 1900; 58 had
a state religion throughout; and 58 had 1 or 2 transitions. We use a Hotelling
spatial competition model to analyze the likelihood that the religion market would
be monopolized. Similar forces influence a government’s decision to establish a
state religion. Consistent with the model, the probability of state religion in 1970
and 2000 is increasing with the adherence rate to the main religion, has a
nonlinear relation with population, and has little relation with per capita GDP.
The probability of state religion decreases sharply under Communism, but lagged
Communism has only a weak effect. With costly adjustment for institutions, the
probability of state religion in 1970 or 2000 depends substantially on the status in
1900. This persistence is much stronger for countries with no major regime change
than for countries with such a change.