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The Political Economy and the Perennial Underdevelopment of the Muslim World

Author

Listed:
  • M. Shahid Ebrahim

    (Bangor University)

  • Seema Makhdoomi

    (Bangor University)

  • Mustapha Sheikh

    (Leeds University)

Abstract

The ongoing political turmoil in the Muslim world necessitates an investigation of the factors leading to centuries of underdevelopment. This essay studies the various perspectives (for and against) attributing Islam as a factor holding back the progress of the Muslim economies. We critically appraise why ‘Islamic’ banking is not truly Islamic to identify: (i) the retrograding outlook of the jurists (fuqaha’); and (ii) their flawed ijtihad (interpretation or deduction of the divine sources of law) as the prime factors responsible for the paucity of development of financial instruments, markets and institutions. We also scrutinize the cooption of the jurists by the ruling elite, thereby legitimizing their autocracy. Finally, we conclude the paper recommending the rectification of these issues to develop institutions fostering economic growth and development.

Suggested Citation

  • M. Shahid Ebrahim & Seema Makhdoomi & Mustapha Sheikh, 2012. "The Political Economy and the Perennial Underdevelopment of the Muslim World," Working Papers 12011, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    • Handle: RePEc:bng:wpaper:12011
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    More about this item

    Keywords

    flawed ijtihad; economic underdevelopment; 'hilah (ruse); intellectual stalemate; riba (Islamic injunction protecting property rights).;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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