Toward an Economic Theory of Religious Belief and the Emergence of Law

This paper examines the interaction between religion and law as alternative mechanisms for controlling behavior. The model involves a prisoners' dilemma game played by randomly paired members of society. Religious believers cooperate reflexively, but are subject to exploitation by nonbelievers. Law enforcement emerges when the gain to believers from deterrence of nonbelievers exceeds enforcement costs. The results show that some minimal amount of religious belief is a prerequisite for law to emerge, but a high level of belief precludes its emergence. Thus, religion is both a complement and substitute for law. We present empirical evidence to support the argument.