Achieving economic development through institutionalisation of zakat and waqf in contemporary economies

Shaikh, Salman Ahmed (2025) Achieving economic development through institutionalisation of zakat and waqf in contemporary economies. In: Islamic Economics, Growth and Development. Islamic Business and Finance Series, 1 . Routledge, Taylor & Francis Group, London, United Kingdom, pp. 60-72. ISBN 9781032321066

	PDF (Book Chapter) - Published Version Restricted to Repository staff only Download (2MB) | Request a copy
Preview	PDF (Scopus) - Supplemental Material Download (174kB) | Preview

Abstract

Social welfare in Islamic framework is not handicapped by notions of consumer sovereignty, Pareto efficiency, and Kaldor-Hicks and Scitovsky compensation criteria which do not violate Pareto efficiency. Social welfare in Islamic framework is also not myopic to not address issues of inequality. Economic teachings in Islam urge individuals to care for others and thus recognise externalities. Islam prohibits welfare-worsening institutions explicitly, such as Riba (interest), Qimar (gambling), Ghaban (theft), and Gharar (uncertainty). It allows price intervention and redistribution of resources. Redistribution is achieved for the most part through Zakat (obligatory levy on wealth and produce) which compulsorily distributes wealth periodically from the haves to the have-nots. Beyond the compulsory transfer of a portion of wealth and produce through Zakat-ul-mal (compulsory levy on wealth) and Zakat-ul-ard (compulsory levy on the produce of land), the institution of Waqf (perpetual endowment) encourages setting aside private wealth for community needs. This can check the private concentration of wealth and enhance the scale of social safety nets for the poor and thereby enabling an increase in their welfare. Finally, the chapter discusses practical and prospective models of microfinance by embedding Zakat and Waqf in integrated microfinance.

Item Type:	Book Chapter
Additional Information:	11450/123714
Subjects:	BPH Islamic Economics BPH Islamic Economics > BPH104 Islam and poverty H Social Sciences > HB Economic Theory > HB846 Welfare theory
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Dr. Salman Ahmed Shaikh
Date Deposited:	23 Oct 2025 16:05
Last Modified:	23 Oct 2025 16:08
URI:	http://irep.iium.edu.my/id/eprint/123714

Actions (login required)

View Item