Abstract - Over the past two millenia successful pre-modern states adopted and cultivated Big-God religions that emphasize (i) the ruler’s legitimacy as divinely ordained and (ii) a morality adapted for larger societies that can have positive economic effects. We make sense of this development by building on previous research that has conceptualized pre-modern states as maximizing the ruler’s profit. We model the interaction of rulers and subjects who have both material and psychological payouts, the latter emanating from religious identity. Overall, religion reduces the need to control subjects through the threat of violence, increases production, increases tax revenue, and can reduce banditry. A Big-God ruler has incentives to invest in expanding both the number of believers and the intensity of belief.