Within the realm of public policy, the issue of religious freedom has become a hot topic in recent years. But to date, few scholars have sought to explain the rise of religious liberty in any systematic way.

This paper attempts to remedy the neglect of this important topic by providing a general theoretical framework for studying the origins of religious liberty. Instead of viewing movement towards liberty as a "natural" and monotonic process, I recast the question in terms of the governmental regulation of religious organizations. The higher the level of regulation, in general, the less religious liberty exists within a society. Doing this allows for temporal variations in the degree and nature of religious freedom. Also, it moves the analysis of the question away from broad-based structural-functional and systemic explanations - which present a myriad of methodological and theoretical problems - and towards an emphasis on human agency. After all, laws regulating religions are made by individuals who undertake such action with purposeful intent. Understanding the motivations of those individuals and their ability to enact legislation under varying constraints is central to understanding the emergence of religious freedom in a more macroscopic sense.

Using a microeconomic approach to religion, I argue that variations in religious liberty can best be explained by examining the political opportunity costs of the principal actors involved in defining church-state relations - i.e., political and religious leaders. While this assertion is quite broad, the framework developed below allows one to posit a number of environmental contexts and then make analytical predictions as to the form and level of religious regulation within a nation. These predictions can then be empirically tested against other hypotheses.