The counterexample for both the density theory and the Protestant theory has got to be the Republic of Ireland. I mean, I can think of epicycles, and so can you, no doubt, but it gets awfully just-so awfully quick. There's actually a bunch of work on the topic, BTW.

Ireland suffered in the run up to 2008 (cheap money resulted in half built houses). Ireland is a very fragmented societal island, Cork v Dub have very different ideas of development. Latvia is protestant and low density and vehement nimby, but that is a function of soviet echoes of central planning

(Done in a variety of disciplines with widely varying assumptions, IIRC, so don't get your hopes up for a clear explanation.)