Abstract

The model explains why liberal denominations favor higher government taxes and spending, while conservative denominations favor lower government taxes and spending. The model explains these real world tendencies as a result of a rational choice problem faced by believers when making normal budgetary decisions. Individuals have preferences with regards to the allocation of their resources between religious and secular investment. Denominations that sincerely represent the religious interests of their adherents, seek to map these religious preferences into corresponding political and economic preferences. Changes in denominations’ objectives will impact their religious teachings, thus affecting their adherents’ economic and political preferences.