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The Influence of Zakat on Economic Growth and Welfare Society in Indonesia

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  • Khasandy, Elleriz Aisha
  • Badrudin, Rudy

Abstract

Indonesia as a one of the most significant Muslim population in the world has developed zakat rapidly; it is shown by the development of the zakat regulation and establishes of Badan Amil Zakat Nasional (BAZNAS). Zakat has many benefit for economic both of macro and micro aspect, such as foster inclusive economic growth. The objective of this study are 1) to examine the influence of zakat on economic growth and welfare society which uses 3 (three) indicators i.e.HDI, Percentage of Poor People, and GINI Index and 2) to investigate whether items of Theory Planned Behavior influence of zakat payment. The researcher used Structural Equation Model (SEM) with PLS software. The result showed that zakat in Indonesia does not influence economic growth and welfare society. Besides that, welfare society Indonesia as a developing country has a negative value to HDI and GINI index but has a positive value to Percentage of Poor People.

Suggested Citation

  • Khasandy, Elleriz Aisha & Badrudin, Rudy, 2019. "The Influence of Zakat on Economic Growth and Welfare Society in Indonesia," MPRA Paper 91574, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:91574
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    File URL: https://mpra.ub.uni-muenchen.de/91574/1/MPRA_paper_91574.pdf
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    References listed on IDEAS

    as
    1. Rudy Badrudin & Baldric Siregar, 2015. "The evaluation of the implementation of regional autonomy in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 7(1), pages 1-11.
    2. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    3. Muhammad Azam & Nasir Iqbal & Muhammad Tayyab, 2014. "Zakat and Economic Development: Micro and Macro Level Evidence from Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 3(2), pages 85-95, June.
    4. Rudy Badrudin & Baldric Siregar, 2015. "The evaluation of the implementation of regional autonomy in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 7(1), pages 1-11, April.
    5. Manggar Wulan Kusuma & Rudy Badrudin, 2016. "Fiscal decentralization effect on economic growth in Bali," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(2), pages 136-147.
    6. Shah Shirazi, Nasim, 2014. "Integrating Zakāt and Waqf into the Poverty Reduction Strategy of the IDB Member Countries," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 22, pages 79-108.
    7. Costanza Naguib, 2015. "The Relationship between Inequality and GDP Growth: an Empirical Approach," LIS Working papers 631, LIS Cross-National Data Center in Luxembourg.
    8. Manggar Wulan Kusuma & Rudy Badrudin, 2016. "Fiscal decentralization effect on economic growth in Bali," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(2), pages 136-147, April.
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    Cited by:

    1. Syakir, Muhammad Fahmi & Risfandy, Tastaftiyan & Trinugroho, Irwan, 2021. "CEO’s social capital and performance of zakat institutions: Cross-country evidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    2. Aysha N. Al-Salih, 2020. "The Role of Zakat in Establishing Social Welfare and Economic Sustainability: The Case of Saudi Arabia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(6), pages 196-202, December.

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    More about this item

    Keywords

    zakat; growth; welfare; planned behavior;
    All these keywords.

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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