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The 'Catholic effect,' or the religious vitality of Catholic areas compared to areas where other religions dominate, has been observed by various scholars but not completely explained. Italy, where a Catholic religious monopoly dominates, also shows this effect. Indicators of vitality from clerical recruitment to mass attendance have remained relatively high and largely stable in recent decades. Yet the principal theoretical paradigms -- secularization and religious market theory -- both would predict a crisis, although for different reasons. This paper addresses the vitality of Italian Catholicism by applying religious market theory and introducing the possibility of internal competition. The policies and polity of Italian Catholicism tolerate and support internal competition; this appears to counteract the decline predicted not only by the old but also by the new paradigm. The Italian case is thus revealed to be not an exceptional event, as often considered in Italian sociology of religion. The Catholic effect could be analyzed and perhaps explained using religious market theory once internal competition is accounted for., INTRODUCTION: THE 'CATHOLIC EFFECT' In American sociological literature, the 'Catholic effect' refers to findings from national and cross-national surveys indicating that, ceteris paribus, national or local Catholic monopolies showed more [...]