Spatial Competition and Organizational Form

This issue of the rational basis for selection of church governance among the reformed churches of Europe in the sixteenth century has not attracted much attention. Yet there is a pattern of selection that can be explained by economic theory. In religious markets that were contiguous and in which the central government was relatively weak, Protestant churches adopted more democratic (i.e., congregational) governance structures; but in isolated or sheltered markets where central government was strong, Protestant churches embraced episcopal forms of government in which bishops exercised authority. In Germany and Switzerland the authority of the central government was too weak to enforce religious conformity and avoid civil wars. The Netherlands was a federation of largely independent states, each ruled by its own representative estates. These countries were in close proximity to each other, so churches competed actively for members and were therefore forced to be more user friendly. What we observe here is the same principle we encountered in chapter 6, namely that competition was keener in contiguous or near-contiguous markets because proximity of various suppliers of religion forces them to be more competitive. This assertion is implicitly corroborated by some historians—for example, after noting how liturgy and ritual became marks of identity separating different Protestant religions, historian Bodo Nischan observes: "Concurrently there had occurred another subtle but important shift in the way Lutherans were treating church usages, notably in regions where they were vying with Calvinists for people's confessional loyalty. Some of the very same liturgical practices which earlier critics of the interim had condemned as 'Catholicising', many followers of the Augsburg Confession were now defending as a useful prophylactic against Reformed and other sacramentarían perversions.''2

Denmark and Sweden were elective monarchies that placed significant restrictions on royal power. Though more isolated, its citizens nevertheless expected a measure of shared governance. Thus we find that the countries of Germany, Holland, Switzerland, Denmark, Sweden, and their dependencies adopted the congregational form of church governance, in keeping with their political/economic circumstances.

In England the outcome was opposite. Before the civil wars of the 1640s, English (Stuart) monarchs held extensive powers, and England was cut off from the Continent by physical and ideological boundaries. The central government was strong and entrenched. Not surprisingly, the English church adopted the episcopal form of governance. It fit the mold of the existing regime, and there was little pressure on the state to make the new religion user-friendly. In sum, Episcopalianism was the face of the Protestant Reformation in England, whereas Congregationalism was the face of the Reformation in Europe.

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