On the Religion-Public Policy Correlation

The interplay between religious and political authorities has been commonplace and study subject of political science. The interplay between politics and economics has been commonplace too, and the focus of political economy. That is, politics emerges as the link between religious and economic matters. This paper tries to rationalize analytically this link between religion and resource allocation through the religion-public policy correlation. It is found out that such a correlation is welfare-enhancing unless fanaticism forces society to choose between Pareto efficiency under a fundamentalist minority dictatorial rule on the one hand, and the broader socioeconomic aspirations of the majority of people on the other. Yet, fundamentalism is expected to subside in the long-run to the extent fanaticism is the result of an emotional outburst.