Islamic Economics

This chapter examines the legal paradigm of the application of multiple Shari'ah board directorship practice from the common law context of directorial fiduciary duties. It employs the critical legal studies approach to analyse the principles, legislations, case laws, policies, and guidelines in the United States, European Union, the United Kingdom, Ireland and Germany. This study scrutinises the polarity of views concerning the pragmatic Masyaqqah (necessity) surrounding the practice in discussion: the Masyaqqah that encourages and one that discourages the application of the practice and places these against the two predominant directorial fiduciary duties under the common law system namely, the duty to act bona fide and in the best interest of the company, and the duty to avoid conflict of interest. Whilst the practice has proven to benefit Islamic financial institutions ('IFIs'), the findings also notice the substantial risks it could inflict on the IFIs' business operations; some which could seriously damage their Shari'ah compliance assurance.

‘Halal’, an Arabic word from the Muslim holy book of the Qur’an, can be translated simply as meaning permissible, according to the teachings of Islam. However, the call to certify products and practices formally, and subsequently then label them has given rise to a new cultural phenomenon. Demands to carry overt labels and messages; and expectations as to what Halal is and should be are on the increase inside and outside of Muslim geographies across the globe. For economic and technological reasons, this is also transferring the domain of halal more and more to a vanguard of businesses; as opposed to being just a religious imperative driven by the clergy.  Furthermore, the current landscape of the halal industry has arrived at a crossroads: where debates consider whether halal offers opportunities for product and brand extensions, rendering it as a niche marketing approach; or if in fact it presents the opportunity to create a new business paradigm. This article offers practitioners and academics an overview and insight into an industry that has been assessed as having a worldwide value of USD $2.3 trillion.

This research seeks to investigate the risks of carbon lock-in by examining the potential factors influencing carbon dioxide emissions levels in Sub-Saharan Africa. Given this, we employed a panel Sub-Saharan Africa comprised of 35 countries in the sub-region, from 2000 to 2014 with cross-sectional dependence among variables. We used the Two-step robust System Generalized Method of Moments to estimate the influencing factors of carbon emissions level that create path dependency. The main findings are: (1) income per capita, urbanization, and financial resources contribute to the increase of carbon emissions level in the Sub-Saharan Africa countries, in the short-run; (2) we noticed that in the short-run, the impacts of fossil fuels per capita, energy intensity and total energy consumption are insignificant; (3) in the long-run, income per capita, urbanization and financial resources increase carbon emissions level; (4) from various factors that increase carbon emissions level, these factors form a path dependency that slow the introduction of low-carbon systems, thus, creating carbon lock-in in the Sub-Saharan Africa countries. Considering this, policymakers and governments should ensure the strict compliance of environmental regulations by financial institutions and organizations, promote low-carbon cities during economic transformation, and encourage investments in low-carbon projects. The government should also educate and build awareness on the effects of environmental pollution on population health, provide incentives for energy conservation and promote the use of clean products to avoid future risks of lock-in in the sub-region.

Purpose-The purpose of this study is to examine the legal paradigm of multiple Sharia' board directorship practice from the Sharia' law concept of Maslahah Al-Mursalah (public interest). Design/methodology/approach-It uses a doctrinal research method that relies on the commonly referred sources of Quran and Sunnah, with a specific focus on Maslahah Al-Mursalah and, where applicable, commentaries by contemporary scholars, academics and practitioners as well as translations of classical book of Fiqh. This study scrutinises the polarity of views concerning the distinct Masyaqqah (necessity) surrounding the practice in discussion: the Masyaqqah that encourages and one that discourages the application of the practice. Findings-This study is keen to suggest the industry to adopt a cautious approach and consider exploring a corporate governance framework that appraises the theoretical and practical Sharia' issues concerning its application in cognisance of its adversarial influence towards the sustainability of Islamic banking industry.

Winner, 2021 ASA Consumers and Consumption Section Distinguished Scholarly Publication Award

Honorable Mention, 2021 ASA Economic Sociology Section Granovetter Award for Best Paper

In Islam, the extension of religious regulation and certification to new product types and economic sectors—"halalization"—has become widespread. There are now Islamic mortgages, halal ports, halal refrigerators, halal blockchain, and shariah-compliant cryptocurrencies. Yet classical secularization theory says religious authority cannot regulate modern economic activity. So what explains halalization? I point to an elective affinity between fiqh (Islamic jurisprudence) and twenty-first-century markets. Contemporary fiqh offers widely respected religious jurists who issue fatwas certifying products. Entrepreneurs empanel the jurists on certification boards, allowing fiqh to function as a regime of voluntary regulation layered atop secular state law instead of conflicting with it. Indeed, secular liberal markets provide ideal conditions for halalization and religious meaning-making through consumption. Case studies of Islamic finance and halal logistics show how entrepreneurs assuage consumers' religious anxieties—and generate new ones—in the context of globalization and liberalization in secular markets.

Purpose: There are many entrepreneurial communities in the Asian subcontinent which are known for their economic resilience and religious orientation but have received limited attention in extant literature. These communities include, Memon, Delhiwala, Chinioti, Ismaili, and Bohri, which have been persistent in keeping their members economically stable since many centuries, while also retaining their religio-sociocultural identity. This paper attempts to add to the body of literature by documenting the possible factors which contribute toward advancing socioeconomic justice for the members of respective communities.

Research Method: This study uses Eisenhardth research strategy within a social constructivist paradigm to process data from in-depth interviews, memos, and documentary sources to explore the internal dynamics of three most prominent of these communities (Memon, Delhiwala and Chinioti) in Pakistan.

Findings: The findings suggest that the secret to their resilience is perhaps rooted in their religio-sociocultural communal norms which may not just ensure effective wealth redistribution among the deserving segments of the society, but may also enable its deserving members to achieve self-reliance through community-supported-entrepreneurial-activity.  This study proposes that a culture of community-based-family-entrepreneurship coupled with the spirit of cooperation, sacrifice and reciprocity may be an effective strategy to counter socioeconomic injustice.

Implications: The religious entrepreneurial communities may be seen as an alternative to free market or state driven methods to impart socioeconomic justice where needed. The voluntary inclination of entrepreneurs in such communities to facilitate those in need may perhaps reduce or even eliminate the need to involve state intervention to redistribute wealth through taxation, which may also eliminate the cost of state bureaucracy which are employed for the collection and redistribution of taxes.

Originality/Value: The findings add to the body of literature which could help similar communities to improve their socioeconomic stability in a just manner for all its members. Policy makers can also take notice of the religio-sociocultural norms as a possible cause for socioeconomic justice within the respective communities to formulate policies conducive of sustaining such norms where necessary.

This paper critically discusses the concept of zakah and taxation. The main objective of the paper is, first, to compare and contrast zakah and taxation, especially on the legal, economic, social, ethical and spiritual aspects. Secondly, the paper aims to examine issues related to the implementation of zakah in modern time by reviewing the practices of zakah and taxation in the early Islamic period and exploring the issues in the context of Malaysia. The paper indicates that zakah greatly differs from the taxation system. Zakah aims not only to achieve religious merit but also to become part of the modern state fiscal policies and share a greater role in removing inequalities in the society. The paper argues that there may be lack of proper implementation of zakah in Muslim countries which limits the success of the noble aims of zakah. Finally, the paper indicates the urgent need for education and political will of modern governments to
ensure the success and survival of zakah.

Purpose-This paper aims to establish whether Muslim consumers qualify as a homogenous billion-consumer group and, if they do, have they been researched adequately in comparison to the other established three-billion consumer groups: China, India, and women? Methodology-A review of articles and conference papers in the field of Islamic Marketing was used to indicate the homogeneity or heterogeneity of the Muslim consumer group. This was followed by counting all of the articles that have been published in marketing journals listed in Business Source Premier database which are related to the consumer groups mentioned above. Findings-The article review revealed a near consensus on the homogeneity of the Muslim consumer group. Moreover, the article count revealed that the Muslim consumer segment is under researched in comparison to all the other major consumer groups. Finally, it was found that only six of the high ranking Marketing journals ranked within the top ten marketing journals publishing articles on one or more of the four segments indentified in this study. The leading journals were clearly the Journal of International Marketing and the Journal of Industrial Marketing management publishing 50 and 49 articles respectively, a number unmatched by any other high ranking journal. Originality-This is the first study of its kind that presents empirical evidence about the amount of research the Muslim consumers received within the last eight decades.

Ekonomi Piyasa İslam Ekonomisi ÖZ 21. yüzyılın İslam toplumları, son iki asrı kapitalizm ve dolayısıyla piyasa ekonomisine uyum sağlama yollarını arayarak geçirmiştir. Tarihsel süreçte, Müslüman sosyal coğrafyanın dünya üzerindeki dağılımı da göz önünde tutulduğunda, anlaşılan odur ki İslam toplumlarının ticaret ve piyasa tecrübesi her dönemde farklılık arz etmiştir. Bu çalışma, öncelikli olarak küresel ölçekte son altmış yıla damgasını vuran İslam ekonomisi teorilerine değindikten sonra; piyasa şartları içerisinde İslami bir ekonomi anlayışının teorik/metodolojik problemlerine değinmeyi amaçlamaktadır. Yine bu araştırmada kapitalist iktisadi koşullar içerisinde hem Müslüman tüccarın hem de içinde yaşanılan toplumun sosyolojik durum tahlilinin yapılması hedeflenmektedir.

A central thesis of this paper is that social science is the study of human experience, and hence is strongly conditioned by history. Modern Western political, economic and social structures have emerged as a consequence of the repudiation of religion associated with the Enlightenment and are based on secular principles. Many of these are inimical to Islamic principles, and cannot be adapted to an Islamic society. Muslim societies achieved freedom from colonial rule in the first half of the twentieth century and have sought to construct institutions in conformity with Islam. The development of Islamic economics is part of this process of transition away from Western colonial institutions. This paper is a survey of the literature on Islamic economics, which focuses on the contrasts between Western economic theories and Islamic approaches to the organization of economic affairs.

Neoclassical theory is centred around the acquisitive instinct of humans and makes competition the driving force of economic analysis. Islamic approaches foster cooperation and encourage generosity as the fundamental principle for handling economic affairs. Human beings have potential for good and evil, and are free to choose between the two; their behaviour is not subject to the mathematical laws postulated by neoclassical economic theory. The main message of Islam is that we must strive to achieve the potential for good at both the individual and social levels. Behaviour in the economic realm is also governed by this goal.

Islamic law (Shari’ah) provides the framework for all activity within an Islamic society. In the economic domain, Islamic law regulates both methods by which money may be earned and also the ways it may be spent. Acquisition of wealth is permissible only in ways that are just to all the parties concerned; exploitation, arbitrary taxation, and individual profit resulting in social harm is not permissible in Islamic law. This puts numerous restrictions on business practices utilized to make a profit. For example, polluting the environment or selling products that lead to moral corruption are not permissible in Islamic law. Wealth that has been acquired becomes private property, which is, according to Islamic concepts, both a trust and a test. The ‘trust’ aspect means that property must be used in ways beneficial to the individual and society. The ‘test’ aspect means that those who have more than they need are required to take care of those who are in need. Ways in which acquired wealth can be spent is also subject to Islamic law. People are expected to strive to be self-sufficient and not ask from others. Thus striving to acquire wealth and spending it on personal and family needs is encouraged. Islam does not preach austerity and encourages a comfortable standard of living. At the same time, it strongly discourages spending on idle desires, luxuries, and ostentation. There is also a strong encouragement to spend what is beyond one’s needs on social welfare.

These fundamental principles for acquiring wealth, using property (acquired wealth) and spending it impact on all realms of economic activity. Since these are substantially different from Western ideas in all three areas, there are substantial contrasts between Western economic institutions and Islamic ones. The paper traces out these differences in many realms of economic activity. The primary objective of an Islamic state is to provide justice, and Islamic public finance is concerned with tracing the concrete implications of this abstraction in the economic realm. Western financial institutions have the acquisition and multiplication of wealth as their prime objective. Since acquisition of wealth can only be a means to an end, these institutions require modification in an Islamic society. Similarly, Islamic imperatives for social welfare require construction of certain uniquely Islamic types of institutions that do not have counterparts in the West. The paper discusses these issues in some detail.

A global system of production, which is designed to produce for the wants or artificial needs of world elite population, has been able to successfully create a highly unsustainable lifestyle. Despite the red flags raised by environmentalists since many decades, world's modern systems have not been able to adapt to prevent climate crisis. This paper attempts to explore the reason behind this inability while using Hollingsworth framework of institutional analysis to get to the very root cause of the problem. In this paper the Hollingsworth framework allowed peeling off the layers of the modern system to reach its axiomatic foundations in at least 7 steps. The path taken to discover the root cause is then reversed by creating an alternative set of axioms where environmental sensitivity is a prime ingredient. Islamic teachings are then used to construct an alternative system of production and consumption over the alternative set of axioms which by default would be environmentally sustainable. The paper therefore argues that reconstructing our society on the template provided by Islamic - environmentally friendly - principles and paradigm is fundamentally necessary to prevent worsening of climate crisis, or perhaps even prevent it altogether depending on how quickly the Islamic alternative is adopted and how many people accepts its adoption.

This study aims to investigate the impact of earnings quality and asymmetric information on market reaction which is proxied by cumulative abnormal return (CAR). This study also attempts to analyze whether good governance is playing an important role in moderating the effects of those two independent variables on CAR. By using purposive sampling method, this study covers 125 manufacturing companies listed on Indonesian Stock Exchange for 2017-2018 period to reveal above agenda. By using generalize least square (GLS) fixed effect model, it is found that reported earnings on financial statement have meaningful information for investors. By this, investors could expect stock return by relying on this earning information. Meanwhile, asymmetric information also matters for investors to make decisions regarding stock transaction. However, independence commissioner which is predicted to have an important role for stock performance, is not proved as moderating variable in this study.

The study explores the effect of corporate governance on the performance of firms in Sub-Saharan Africa by using both return on equity and return on assets as performance measures. Unique data from 252 listed firms drawn from Nigeria, South Africa, Ghana and Kenya covering thirteen year period of 2006-2018 was used and analysed within the generalised least square panel data framework. Results indicate that the direction and the extent of impact of corporate governance are dependent on the performance measure being examined. Specifically, our findings show that board structural characteristics and firm performance relationship was significant and stronger with return on equity as compared to return on asset. We also find that unlike for frequency of board meetings, the results suggest that board structural characteristics are significant predictors of firm performance and that the monitoring and resource dependence roles partially mediate the relationship between board structural characteristics and firm performance.

The research aims to highlight the importance of market structure and behavior on Islamic banking performance by using the Structure Conduct Performance (SCP) analysis to approximate the growth of Islamic banking performance in the short and long term using error correction model. The data used in this study is time series obtained from the financial statement of each Islamic bank, Financial Service Authority and Bank of Indonesia on Islamic banking statistics monthly reported from April, 2015 to October, 2018. Population of this study covers all Islamic commercial banks in Indonesia. The purposive sampling method is used to select samples based on criteria to get samples that are feasible to be analyzed. Error correction model is applied to characterize the joint dynamic of variables in both in the long and short term relationships. The Johansen co-integration results indicate a stable long term relation between market structure and Islamic banking performance. Results show that Market structure variable outside market share of financing in the long term had a significant effect on the Islamic banking performance, but in the short term market structure, the variable had no significant effect on the Islamic banking performance in Indonesia.

This paper questions claims about the all-pervasive neoliberalization of everyday life that dominate many debates in anthropology and beyond. Situated in deprived rural areas of post-war Bosnia–Herzegovina where socio-economic restructuring has led to a reduction in social redistribution and access to many once-guaranteed state provisions, I explore the workings of an Islamic economic theology of halal exchange that mediates divine abundance through an ethics of care and generosity. In a situation of increasing socio-economic inequalities, the economic theology of halal exchange offers villagers a parallel logic of relating to the divine and to each other, as it is concerned with generosity and sharing rather than with the calculative logic of profit and accumulation. Ultimately, this paper addresses the way that specific reconfigurations of cultural values provide a significant basis for moral imagination, innovative practice and virtuous action at a time of radical change and uncertainty.

The study was to summarize corporate governance and sustainability performance empirically. The increased importance of corporate social responsibility has also been associated with an increased demand for better information on companies’ sustainability performance. However, sustainability performance and reporting are (still) voluntary, though CG pressures may urge companies to become more responsible for their sustainability performance. This was achieved by reviewing other studies undertaken by other scholars across the world over the period. Again, the review was based on the GRI (Global Reporting Index) and sustainable goals for agenda 2030. The implication of the study was not just to extend literature but also to provide a new beginning and an idea for the recent development in corporate governance and sustainability performance. The outcome was also meant to add to the continuous standard-setting agenda, primarily as the summary was based on the GRI framework and the sustainable goals agenda.

Type: Research Article

Öz: Emek sermaye ortaklığı, uygulandığı takdirde toplumsal kalkınmaya katkı sağlayacak bir finansman modelidir. İslam hukukunda emek sermaye ortaklığını ifade eden mudarebe finansmanın, faizsiz finans sisteminde iyi bir model olma potansiyelini bünyesinde barındırmasına rağmen, katılım bankalarının sermaye; müşterinin de emeğini ortaya koyduğu şekliyle, uygulanma oranı çok düşüktür. Bu durum literatürde gerektiği kadar ele alınmamış, sunulan öneriler ise yüzeysel kalmıştır. Söz konusu çelişkinin nedenleri üzerine eğilen bu araştırma olası nedenleri katılım bankası perspektifinden değerlendirerek farkındalık oluşturmayı amaçlamaktadır. Mudarebe finansmanının katılım bankaları için ahlaki risk barındırdığını ileri süren araştırma, bu iddiayı ahlaki riskin yasal altyapı, kayıt dışı işlemler, ticari olgunluk seviyesi, ekonomik konjonktür ve denetim kavramları ile ilişkisi çerçevesinde alanında uzman kişilerle yarı yapılandırılmış mülakatlar gerçekleştirerek değerlendirmiştir. Gerçekleştirilen mülakatlar ve sonrasında yapılan değerlendirmeler neticesinde katılım bankalarının mudarebe finansman modelini uygulayabilecek bir altyapıya sahip olmadığı, söz konusu modelin sürdürülebilir bir şekilde uygulanabilmesi için katılım bankalarından farklı işleyen yeni bir kurumun gerekliliği sonucuna varılmıştır. Son olarak mudarebe modelinin uygulanabilirliğini arttırmak için öneriler sunulmuştur.

Abstract: Labor capital partnership is a financing model that contributes to social development. Although the mudaraba financing is a good alternative for interest-free financial system, the implementation in participation banks is very low in the form of participation banks providing capital and the customer provides labor. This situation has not been handled as much as necessary in the literature, and the suggestions presented have been superficial. This research aims to raise awareness by evaluating possible causes from the perspective of participation bank. The research, which argues that mudaraba financing poses moral risk for participation banks, evaluated this claim by conducting semi-structured interviews with experts in the field within the framework of the relationship between moral risk and the legal infrastructure, informal transactions, commercial maturity level, economic conjuncture and audit concepts. As a result of the interviews and subsequent assessment, it has been concluded that participation banks do not have the proper structure to implement the mudaraba financing and a new

This article deals with the origins, development and popularity of boycott fatwas. Born of the marriage of Islamic politics and Islamic economics in an age of digital communications, these fatwas targeted American, Israeli and Danish commodities between 2000 and 2006. Muftis representing both mainstream and, surprisingly, radical tendencies argued that jihad can be accomplished through non-violent consumer boycotts. Their argument marks a significant development in the history of jihad doctrine—the article argues—because boycotts, construed as jihadi acts, do not belong to the commonplace categories of jihad as a “military” or a “spiritual” struggle. The article demonstrates, furthermore, that boycott fatwas emerged, to a large degree, from below. New media, and in particular interconnected computer networks, made it easier for laypersons to drive the juridical discourse. They did so before and, with increasing urgency, after September 11. Their consumer jihad had some economic impact on targeted multinationals, and it caused corporate reactions.

Purpose

This paper aims to discuss the application of waqf (endowment) in the social finance sector for funding social and development projects and services.

Design/methodology/approach

The study is qualitative. It reviews literature and provides descriptive data to present its main idea.

Findings

Most Muslim-majority countries are generally income-poor, and the governments are generally weak in their tax collection, effective governance and capacity for development spending. Private sector financial institutions are scarce and mostly cater to the people who can meet the income-based lending criteria. Thus, the institution of waqf can fill the gap as a social finance institution by providing intermediation services for effectively utilising perpetual social savings. Flexibility in the rules of waqf enables it to serve beneficiaries directly or through financial institutions and to provide a wide range of social services.

Research limitations/implications

This conceptual research highlights the need and potential of waqf without discussing the regulatory and operational details of how to effectively institutionalize it in different regions.

Practical implications

The institution of waqf can harness the potential of selfless charitable giving in an effective way for better economic impact in the targeted social segments of society.

Originality value

The paper suggests the establishment of waqf-based training and vocational centres which will increase opportunities of self-employment and contribute in upward social mobility of beneficiaries.

Otto Hübner’s (1818–1877) international bestseller introduction to political economy, Der kleine Volkswirth, appeared in Turkish in 1869 in two different editions. Two Ottoman officials translated the book into Turkish with different linguistic styles and pedagogical objectives. Beyond being an exceptional case in Ottoman-Turkish economic literature in this respect, the Hübner translations heralded the dawn of popular political economy in the Ottoman Empire. Economic literature before 1869 consisted of works written exclusively for the elite to introduce this new science as an instrument of state administration. Starting with the Hübner translations, we observe the burgeoning of a popular economic literature in the empire aiming at changing the economic mentality and behavior of the masses. This study is a comparative examination of the two Ottoman-Turkish translations of Der kleine Volkswirth in historical context.

Economic behavior in the study of Islamic economics is the basis for the government to portray political ethics and ethical economic functions of individuals in functioning as a member of society. Secular ethics and religious ethics, according to al-Mawardi, as the code of conduct in conducting economic practices by the government and every member of society to uphold the principle of mashlahah (goodness). By the middle or moderate principles, both ethical underpinning for anyone in private and institutional (government) in carrying out economic activities to realize the happiness of the world and the hereafter.

Number of Pages in PDF File: 29
Keywords: economic philosophy, behavioral economic, religion, ethic, Islamic economic
JEL Classification: JEL code: B3, B4, D01, H1, H5, N01, N35

Market banking industry is shared by conventional and Islamic Banks in MENA. These latter banks are expanding during the last decade. In an intensive competitive environment, it is interesting to compare banking performances and their resiliency by considering two competing bank groups: Islamic and commercial banks. Using parametric distance function models, hyperbolic and output distance functions, two efficiency measures related to profit and revenue are compared. Results find evidence of technical efficiency differences, some evidence with bank size but reject the common technology assumption. We evaluate the business risk of each bank group by considering the impact of a sharp abrupt deterioration in their activities. Results show that Islamic banks have the lowest resiliency to shocks when compared to the two other banks categories while a shock on non lending activities has a much more impact on Islamic business banks business risk.

The main purpose of this paper is to examine the compliance of investment deposit return with profit and loss sharing principle. This compliance is analyzed through the impact of bank's risk, governance mechanisms and competition environment on investment deposit return. We use a pooled regression model applied to a panel of sixty Islamic banks during the period 2004e2012. The estimation indicates that the management of investment deposit and PLS assets is characterized by a moral hazard behavior and excessive risk taking. The estimation reveals that capital ratio and interest rate affect positively investment deposit return. Small Islamic banks offer a better return of deposit compared to the large bank. We find no evidence of the impact of board of directors and Sharia board. Following these results, we suggest that investment accounts holders should be integrated in the bank governance system. Besides, the Islamic banks are incited to develop a new generation of investment deposits.

Purpose-The purpose of this paper is to offer an alternative conceptualisation of commercial insurance that is based on service thinking and compares it to the ideas flowing from goods thinking that currently appears to be a dominant mindset. Design/methodology/approach-When deliberating on commercial insurance, Muslim jurists and scholars followed a misleading route of logical reasoning that is based on comparing insurance to other approved commercial contracts within Islamic Law. In this paper, the author questions such reasoning by contrasting the framework of service thinking to that of goods thinking. Findings-The alternative framework proposed in this paper repositions commercial insurance as a unique type of service (rather than a good). It shows that commercial insurance can be seen as a bundle of benefits, which unfold in a gradual, intermittent, sporadic manner depending on the circumstances. This mode of a servicing relationship focuses on harm removal rather than the opportunistic actualisation of unfair monetary gain. Insurance premium is conceptualised as an availability fee, while compensation payout is recast as the restoration of value. Practical implications-Muslim jurists and marketing practitioners can use this framework to further scrutinise the permissibility of different varieties of commercial insurance in the contexts of both Muslim and non-Muslim majority countries. As service thinking radically repositions the essence and structure of commercial insurance, the views on the relevance of "gharar" and "riba" may undergo significant re-conceptualisation. Moreover, the design of takaful options can be improved on this basis. Social implications-Service thinking can better elucidate a positive societal role of commercial insurance that is in accord with the societal and Islamic maxim of harm removal. Some objections to commercial insurance relate to public policy failures. Well-regulated commercial insurance industries can substantially contribute to the economic development of impoverished societies. Originality/value-This paper exemplifies compelling power as well as potential of the discipline of Islamic marketing in contributing to significant debates concerning the permissibility of modern commercial options.

The relation between religion, economy and the country became a major topic in the development of public welfare systems. Humans are political creatures that have the potential to realise the level of moral conscience to meet the needs of a better life, but humans as spiritual beings must have a balance between religious morality and economic morality. With economic ethics are supported by religious morality, the welfare system can be realised systemically if the state, communities and individuals can realise the six-dimensional form: religious observance, good governance, justice, national security, the prosperity of society and the nation's vision.

Number of Pages in PDF File: 21
Keywords: religion, economy, state, ethics, welfare state
JEL Classification: B3, I3, N3, P5, Z12

There are various forms of zakah distribution practiced by the zakah institutions. One of them is the distribution of zakah in a form of business capital given to productive zakah recipients. This form of zakah distribution is recognized as micro-financing mechanism. Thus, this paper attempts to analyse the potential of zakah fund as a source of Islamic micro financing to productive zakah recipients. The analysis is divided into several parts. Firstly, this paper discusses on the rationale of zakah fund as a source of micro financing to small Muslim entrepreneurs. It is then followed by the feasibility study of zakah as a micro financing mechanism. Thirdly, this paper shares the practicality analysis of the mechanism by sharing the experience of Selangor Zakah Board (Lembaga Zakat Selangor - LZS). In addition, it also highlights the problems and challenges of LZS in performing the role of 'micro-finance institution'. Lastly, suggestion on the proper mechanism of zakah micr...

The paper explores the role and meaning of mas ˙ lah ˙ a (social utility) and its possible appropriation in the field of Islamic legal and economic thought, as laid down by various medieval and contemporary Muslim scholars. Questions that are pertinent to the research are the following: how has mas ˙ lah ˙ a been incorporated in legal reasoning and what kind of meaning does it convey; what type of economic (and/or legal) reading does it presuppose; do ethics, law, and scriptural sources play equally important role as reference in developing the concept in economic terms, are some of the questions that this paper will try to provide answer to. Further, as there is a tendency to believe that Islamic economic thought cannot be equated only with legal and juridical underpinnings, it is pertinent to pose a question if economic ideas have flourished independently from its legal framework.

The main discussion in this study is distribution as the root to be forwarded to another economic activity, it is redistribution concept. The concept of redistribution has always been a debate in every microeconomics discussion. Purpose of this study is to discuss how the concept of Islam regulate distribution also redistribution of wealth, and how this concept break away the inefficiency of economic activity. This study begins with a discussion of the principles of ownership by promoting the concept of multi ownership. The principles include all the basis of human freedom master, possess, use, reproduce, distribute, and redistribute wealth. The redistribution of wealth is ruled in every parties of economic agent, as long as it is human. How the redistribution is ruled is investigated based on Islamic Law of Fiqh. Furthermore, this research is trying to examine how the concept of redistribution benefits the efficiency in economy. This study was conducted using partial equilibrium analysis simulation research methods of the literature studies, both of textbooks and handbooks various studies. The simulation case applied on zakat implementation on muzakky and mustahiq in adjusting new equilibrium of supply and demand. Effect of taxation and subsidy on partial equilibrium also simulated to get the comparison view. The literature on the concept of Islamic paradigm and the positive paradigm are managed to produce a comprehensive study. In the final conclusion, this study focused on the Islamic paradigm affirmation of zakat redistribution concept benefits and its advantage for the improvement of efficiency of economy.


Type of Paper: Conceptual

Keywords: Efficiency, Distribution, Islamic economic, Redistribution..