Recent studies on the politics of religion-state arrangements have emphasized the great variety of ways in which states formally institutionalize their relationships with the religions of their nations (Fox 2008, Madeley 2004, Grim and Finke 2006, Driessen 2010). This paper engages that literature by asking how political regime types affect the way in which this variety of religion and state arrangements interact with national religious markets. Specifically, the paper claims that regime types condition the manner in which religion-state arrangements affect the economies of national religious markets as hypothesized by, among others, Gill (1998, 2008), Stark and Iannacone (1994), Barro and McCleary (2006). Variation in regime types, the paper argues, can help account for the failure of recent religious market scholarship to explain the exceptionally high levels of religiosity found in predominantly Muslim and Catholic settings (Norris and Inglehart 2004). Rather than inevitably distorting and weakening the vitality of national levels of religiosity (as religious market theorists would suspect), government favoritism of religion in an authoritarian setting can actually spur national levels of religious growth. After presenting these theoretical claims, I explore their expectations through an analysis of Fox’s (2006) cross-national data on religion-state arrangements and their relationship to national religious attitudes in the predominantly Muslim world. Preliminary results support the hypothesis that state subsidies on public religious education can help regenerate a loose national religious identity in an authoritarian setting. The paper concludes by reflecting on the risks and advantages incurred to states, authoritarian or not, when they treat religion as a public good.