Religious intensity as social insurance may explain why fiscal and social conservatives and fiscal and social liberals come hand-in-hand. We find evidence that religious groups with greater within-group charitable giving are more against the welfare state and more socially conservative. Libertarians (fiscal conservatives–social liberals) are more abundant than the religious left (fiscal liberals–social conservatives). The alliance reverses for members of a state church: social conservatives become fiscal liberals. Increases in church-state separation precede increases in the relationship between fiscal and social conservatism. The framework provides a novel explanation for religious history: as credit markets develop, elites gain access to alternative social insurance and legislate increasing church-state separation to create a constituency for lower taxes. This holds if religious voters exceed non-religious voters, otherwise, elites prefer less church-state separation in order to curb the secular left. This generates multiple equilibria where some countries sustain high church-state separation, high religiosity, and low welfare state, and vice versa. We use this framework to explain the changing nature of religious movements, from Social Gospel to the religious right, and why church-state separation arose in the US but not in many European countries.
Maybe this is not fully sound, but it is one of the most interesting papers I have read in years. I have high hopes for the guy.