[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/26701.html
   My bibliography  Save this paper

An Ideal Islamic Economic System: A Gone Case

Author

Listed:
  • Shaikh, Salman
Abstract
Islamic finance industry mostly uses LIBOR linked financial contracts which are akin to debt financing than the more preferable participatory modes of Mudarabah and Musharakah. As per the current orthodox understanding and practice of Islamic finance, the often cited preferable modes like Mudarabah and Musharakah are incapable even in a simple model economy with them as the only mode of financing. Hence, they are rarely used. The prevalent Islamic products which are linked with LIBOR are and will predominantly be used and practiced Islamic finance may remain incapable of providing egalitarian benefits it once promised. Ironically, Islamic values like justice, equality, truth, trust, kindness, honesty and responsibility are often discussed in literature and seminars on Islamic Economics; whereas, in reality, the lack of these values in practice is the major reason why preferable participatory modes remain unusable! As discussed, the current orthodox understanding of Islamic fiscal redistribution mechanisms like Zakat and Inheritance also make them incapable of contributing towards the establishment of an egalitarian economic framework. This paper proposes an alternate approach to practiced Islamic finance and orthodox understanding of Zakat and inheritance laws and shows that the alternate approach could still be sufficient to contribute towards egalitarian objectives effectively.

Suggested Citation

  • Shaikh, Salman, 2010. "An Ideal Islamic Economic System: A Gone Case," MPRA Paper 26701, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26701
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/26701/1/MPRA_paper_26701.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shaikh, Salman Ahmed, 2010. "Proposal for a New Economic Framework Based On Islamic Principles," MPRA Paper 23000, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Seho, Mirzet & Alaaabed, Alaa & Masih, Mansur, 2016. "Risk-Sharing Financing of Islamic Banks: Better Shielded Against Interest Rate Risk?," MPRA Paper 82558, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olah, Daniel, 2016. "A közös ős nyomában: modern nyugati közgazdasági gondolkodás és az iszlám hagyomány [In the Quest for the Common Ancestor: Modern Western Economic Thought and the Islamic Tradition]," MPRA Paper 86412, University Library of Munich, Germany.
    2. Shaikh, Salman Ahmed, 2011. "A critical analysis of Mudarabah & a new approach to equity financing in Islamic finance," MPRA Paper 19697, University Library of Munich, Germany.
    3. Abdelkader Derbali & Abderrazek El Khaldi & Fathi Jouini, 2017. "Shariah-compliant Capital Asset Pricing Model: new mathematical modeling," Journal of Asset Management, Palgrave Macmillan, vol. 18(7), pages 527-537, December.

    More about this item

    Keywords

    Islamic Finance; Islamic Economics; Welfare Economics; Experimental Economics; Heterodox Economics; Zakat; Fiscal Redistribution;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • G0 - Financial Economics - - General
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:26701. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.