Source: Lawrence R. Iannaccone, Roger Finke, and Rodney Stark: Deregulating Religion: The Economics of Church and State.
This paper reviews the effects of government actions that alter religious supply. Our paper demonstrates that simple deregulation lies at the root of major religious trends and that the vitality of religious markets critically depends upon its competitiveness.
USA is the most deregulated and competitive market with an abundant supply of different churches. In the most monopolistic markets, Scandinavia, with Lutheran state churches, very few people go to church regularly.
We have previously mentioned the very interesting work done by Larry Iannaccone. Now he is giving a talk on EconTalk discussing these and other matters. It is a very useful introduction to his fascinating work.