["Journal for the Scientific Study of Religion, EarlyView. ", "\nABSTRACT\nHow do governments’ policies toward religion impact the relationship between citizens and civil society? A large body of literature examines the effect of social capital on democratic governance. Studies of State Religious Policy, or SRP, however, have shown complex and potentially contradictory effects on different types of social capital. Focusing on participation as a particular aspect of social capital, I argue that both supportive and restrictive policies toward religion reduce religious adherents’ incentives to participate in both religious institutions and civil society as a whole. I test this theory using a multilevel analysis of Christian‐majority democracies. I find that both supportive and restrictive policies reduce the effect of religious adherence on service attendance, membership in religious institutions, and participation in civil society organizations. Restrictive policies consistently show stronger effects than supportive ones. Robustness tests indicate that these findings hold in any sample of democratic countries but are weaker or nonexistent when nondemocratic countries are included.\n"]