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Economic freedom in Muslim countries: an explanation using the theory of institutional path dependency

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  • François Facchini

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Abstract

This article explains the level of economic freedom in Muslim countries through the theory of institutional path dependency. Islamic countries are generally not free and they have a poor record regarding property rights. To explain these realities we use the institutional history of Muslim countries. We define three steps: the Arab and Ottoman Empires when Islamic law was of great importance, European colonisation, and the contemporary era with its movement towards a revival of Islam. Islamic law is not liberal. This explain why in general Muslim countries are not free. Colonisation radically changed institutional life in the twentieth century. British colonisation proved to be better than did French or Soviet colonisation. This explains why the Persian Gulf countries are freer. The collapse of the Soviet model explains the speed of liberalisation in former socialist countries (such as Albania, Kyrgyz Republic, and Kazakhstan). Nevertheless, the twentieth century was not just the century of Westernisation. It was also the century of the revival of Islam. The article concludes that the history of the twentieth century does not explain the way in which Muslim countries are attracted by the ideal of the Muslim city. The revival of Islamic intellectual innovations and the evolution of Muslim opinion sustain this thesis. Therefore, there is a dependency on the past and on an imagined future. Islam acts, like yesterday, on the world of institutional possibilities. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • François Facchini, 2013. "Economic freedom in Muslim countries: an explanation using the theory of institutional path dependency," European Journal of Law and Economics, Springer, vol. 36(1), pages 139-167, August.
  • Handle: RePEc:kap:ejlwec:v:36:y:2013:i:1:p:139-167
    DOI: 10.1007/s10657-011-9250-y
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    References listed on IDEAS

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    Cited by:

    1. Juhasz, Peter & Varadi, Kata & Vidovics-Dancs, Agnes & Szaz, Janos, 2017. "Measuring Path Dependency," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 8(1), pages 29-37.
    2. Kaya Abdullah & Tsai I-Tsung, 2016. "Inclusive Economic Institutions in the Gulf Cooperation Council States: Current Status and Theoretical Implications," Review of Middle East Economics and Finance, De Gruyter, vol. 12(2), pages 139-173, August.
    3. Evgeni Peev, 2015. "Institutions, economic liberalization and firm growth: evidence from European transition economies," European Journal of Law and Economics, Springer, vol. 40(1), pages 149-174, August.

    More about this item

    Keywords

    Economic freedom; Colonisation; Imaginary; Islam; Property rights; KOO; N23;

    JEL classification:

    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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