Theocracy Metin M. Coşgel Thomas J. Miceli

Theocracy Metin M. Coşgel University of Connecticut Thomas J. Miceli University of Connecticut Working Paper 2013-29 November 2013 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063 Phone: (860) 486-3022 Fax: (860) 486-4463 http://www.econ.uconn.edu/ This working paper is indexed on RePEc, http://repec.org THEOCRACY by Metin Coşgel* and Thomas J. Miceli** Abstract: Throughout history, religious and political authorities have had a mysterious attraction to each other. Rulers have established state religions and adopted laws with religious origins, sometimes even claiming to have divine powers. We propose a political economy approach to theocracy, centered on the legitimizing relationship between religious and political authorities. Making standard assumptions about the motivations of these authorities, we identify the factors favoring the emergence of theocracy, such as the organization of the religion market, monotheism vs. polytheism, and strength of the ruler. We use two sets of data to test the implications of the model. We first use a unique data set that includes information on over three hundred polities that have been observed throughout history. We also use recently available cross-country data on the relationship between religious and political authorities to examine these issues in current societies. The results provide strong empirical support for our arguments about why in some states religious and political authorities have maintained independence, while in others they have integrated into a single entity. JEL codes: H10, P5, N4, Z12 Key words: theocracy, state, politics, religion, church, legitimacy, loyalty, monotheism, polytheism, democracy, power November 2013 *Professor of Economics, University of Connecticut, Storrs, CT 06269-1063, Ph: (860) 486-4662, Fax: (860) 486-4463, e-mail: [email protected] **Professor of Economics, University of Connecticut, Storrs, CT 06269-1063, Ph: (860) 486-5810, Fax: (860) 486-4463, e-mail: [email protected] We are grateful for the helpful comments and suggestions of participants in seminars at the 2013 ASREC conference in Washington, DC; the Economics Department at the University of Connecticut; The Center for Study of Public Choice at George Mason University; the Economics Department at Connecticut College; and the AALIMS conference at Princeton University. We also thank Murat İyigün for sharing his human civilizations data; Jonathan Fox for suggestions on appropriate variables and indices in his “Religion and State” database; and Peter Turchin for guidance in database construction. Finally, we acknowledge the research assistance of Can Bekaroğlu, Matthiew Burnside, David Greenberg, Joe Histen, Mitesh Mistry, Rob Roche, Joel Sinofsky, and Huanan Xu. As usual, any remaining errors are our own. Theocracy I. Introduction Religious and political authorities have historically had a mysterious attraction to each other, often joining forces to rule populations. Ancient rulers typically had religious titles, close affiliations with religious figures, or even divine powers, a trend that has been persistent over time. The tendency towards theocracy has continued in modern societies, despite the ideals promoted by the Enlightenment. The collusion between religious and political authorities has been at the core of numerous political and economic events and conflicts of the twenty-first century, including wars, banking, women’s rights, school curriculum, and public finance. Although there exists a large and growing literature on the economics of religion in general,1 economists have paid little attention to theocracy. Notable exceptions include Ferrero (2013) and Allen (2009).2 Ferrero (2013) develops a principal-agent model in which the church (or religious authority) is the principal and a secular ruler is the agent. The church chooses between a theocratic regime wherein it provides government services itself, or a secular regime wherein it contracts out government services to a ruler. The trade-off is between corruption/incompetence under a theocracy (because the theocrat does not have specialized knowledge required for governing) and agency costs under secular rule. Allen (2009) takes a different approach by interpreting theocracy as an institutional screening mechanism that facilitates cooperation when people’s willingness to cheat on one another is unobservable. 1 See, for example, Iannaccone (1991, 1998), Finke and Stark (1992), Barro and McCleary (2005, 2006), Hébert and Tollison (2006), and Stark (2007). 2 Also see the edited volume by Ferrero and Wintrobe (2009), which includes other economic perspectives on theocracy. 1 In contrast to these theories, we propose a political economy approach to theocracy that centers on the legitimizing relationship between religious and political authorities (Coşgel and Miceli, 2009; Coşgel, Miceli, and Ahmed, 2009; Coşgel, Miceli, and Rubin, 2012). Using standard assumptions about the motivations of actors, we develop a simple model of the emergence of theocracy—more specifically, of the difference between the regimes of complete independence between religious and political authorities and the integration of these authorities into a single entity. The possible benefits from such integration are that the theocrat can choose the level of religious goods to serve its own ends, and under the alliance it can receive legitimacy from the religious leaders. We use the model to identify the factors favoring the emergence of theocracy, such as the organization of the religion market, and whether the dominant religion is monotheistic or polytheistic. For an empirical analysis of our arguments, we constructed a unique data set that includes information on over three hundred polities that have been observed throughout history, ranging from about 3,700 BCE up to the twentieth century. For each polity, the dataset includes information on its geographic and temporal location, land and population peak, characteristics of the religion market, and various other variables describing the relationship between religious and political authorities. After constructing indices to approximate the degrees of theocracy and religious legitimacy in the polity, we use regression analysis to determine the relationship between these variables. To examine the applicability of our arguments to current conditions, we constructed contemporary cross-country data by combining traditional economic variables with recently available data on the relationship between religious and political authorities.3 Using the abundant 3 For example, see the Religion and State (RAS) dataset assembled by Fox and Sandler (2005) and Fox (2008). 2 detail on the state-religion relationship contained in this data, we construct suitable proxies for variables of interest, such as the levels of theocracy, religious legitimacy, and competition in the religion market. We again use regression analysis to identify factors affecting the emergence of theocracy. II. The Political Economy of Theocracy We consider theocracy as a distinct form of government marked by the integration of political and religious authorities. Such a unified entity can be described in various ways based on the specific characteristics of these authorities and the nature of their relationship. According to Encyclopædia Britannica, theocracy is “government by divine guidance or by officials who are regarded as divinely guided. In many theocracies, government leaders are members of the clergy, and the state's legal system is based on religious law.” Similarly, Webster’s New Lexicon Dictionary defines theocracy as “government by priests or men claiming to know the will of God; a state thus governed.” In the purest form of theocracy, the political authority and the religious authority are one and the same, unified in the persona of someone with a direct connection to god. In other integrations of religious and political authorities, a council with varying degrees of representation from each authority could rule a state, or certain powers could be delegated to earthly professionals. Although pure theocracies, like pure democracies or pure monarchies, have historically been rare, elements of theocracy have always been present. Indeed, in early civilizations theocratic rule was typical. The largest and best known historical examples of theocracy include Ancient Egypt and Israel, the Umayyad and early Abbasid Caliphates, the Papal States, and Tibet. Despite the influence of the Enlightenment, more recent examples of theocracy can be 3 found in Mormonism, Iran, Saudi Arabia, and the Vatican. Even many democratic societies today have political parties with predominantly religious agendas. Theocracy is clearly a complex phenomenon that can elude systematic analysis unless one employs a simple but flexible framework. To explain the emergence and varieties of theocracy, we adopt a political economy approach that defines it simply as the integration (or merger) of religious and political authorities. In other words, a theocracy arises when these two authorities choose to act as one rather than acting independently. In this simple setting, we do not distinguish between the cases of the political authority taking over the religious authority or vice versa. In other words, we do not try to open the “black box” describing the actual emergence or internal operation of a theocratic regime, focusing instead on the behavior of the merged entity once it is under the control of a single decision-maker. Although the inner workings and other characteristics

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