1. Introduction[A] union of government and religion tends to destroy government and degrade religion.So wrote Justice Hugo Black in majority opinion in Engel v. Vitale,1 a 1962 school prayer case decided by United States Supreme Court. Today, church-state issues continue to rise to forefront of American politics. In recent years alone, disputes have arisen over public school vouchers and prayers, phrase under God in Pledge of Allegiance, display of Ten Commandments in public meeting halls and courthouses, and proper scope of President Bush's recent Faith-Based and Community Initiative. Across Atlantic, William Carey, recently retired Archbishop of Canterbury, argued in April 2002 that establishment strengthens Church of England by allowing it to build a comprehensive network of parishes throughout entire country, and he denied that establishment has constrained the prophetic voice of Church.2 In contrast, Carey's successor Rowan Williams, who became Archbishop of Canterbury in July 2002, has in past advocated disestablishment of Church of England.3 In Sweden, where Church of Sweden had been state church since 1593, parliament passed a statute providing for formal disestablishment of church on January 1, 2000.4In United States, strongest advocates for giving religion a more prominent role in governmental settings have often been religious conservatives, whereas strongest opponents are often political liberals. For example, in recently decided Cleveland school voucher case,5 Christian organizations like Focus on Family, Christian Legal Society, Ethics and Religious Liberty Commission of Southern Baptist Convention, National Association of Evangelicals, and United States Conference of Catholic Bishops filed briefs in support of program, which allowed public funds to pay tuition in private schools (including religious schools). Among organizations filing briefs in opposition to program were NAACP and various public education lobbies, whereas American Civil Liberties Union, People for American Way, and Americans United for Separation of Church and State provided legal representation for some of plaintiffs challenging voucher program. Interestingly, however, several religious organizations also filed briefs in opposition to voucher program, including American Jewish Committee, Jewish Council for Public Affairs, Baptist Joint Committee on Public Affairs, National Council of Churches of Christ in USA (NCC), and two regional Seventh-Day Adventist organizations. Except for NCC, these organizations represent interests of religious groups that are (or in case of Baptists, once were) distinctly in religious minority.A growing body of research suggests that any positive benefits to church with direct support from state are outweighed by indirect effects that undermine church's autonomy and its authority with general populace. (For an excellent introduction to this research, see Stark and Finke 2000, chapter 9). If such research is correct, then advocates of governmental endorsement of religion may be undermining very institutions they seek to support. In this article, we use cross-country survey responses to assess impact of religious freedom and separation of church and state on health of religion throughout world. Using survey responses on frequency of attendance at religious services, we find that government establishment of state religion reduces religious attendance, whereas enduring constitutional protection of religion increases religious attendance.Adam Smith recognized that establishment could ultimately undermine state religion. In The Wealth of Nations, Smith discussed impact of establishing a religion on fervor and effectiveness of clergy in that religion:The teachers [of religion], in same manner as other teachers, may either depend altogether for their subsistence upon voluntary contributions of their hearers; or they may derive it from some other fund to which law of their country may entitle them; such as a landed estate, a tythe or land tax, an established salary or stipend. …