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Islam, Inequality and Pre-Industrial Comparative Development

Author

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  • S. Michalopoulos
  • A. Naghavi
  • G. Prarolo

Abstract

This study explores the interaction between trade and geography in shaping the Islamic economic doctrine and in turn the comparative development of the Muslim world. We build a model where an unequal distribution of land quality in presence of trade opportunities conferred differential gains from trade across regions, fostering predatory behavior from the poorly endowed ones. We show that in such an environment it was mutually beneficial to institute an economic system of income redistribution featuring direct income transfers in return for safe passage to conduct trade. A commitment problem, however, rendered a merely static redistribution system unsustainable. Islam added a set of dynamic redistributive rules that were self-enforcing under large gains from trade and high proportions of arid land. While such principles fostered the expansion of trade within the Muslim world they limited the accumulation of wealth by the commercial elite, shaping the economic trajectory of Islamic lands in the preindustrial era.

Suggested Citation

  • S. Michalopoulos & A. Naghavi & G. Prarolo, 2014. "Islam, Inequality and Pre-Industrial Comparative Development," Working Papers wp974, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:wp974
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Islam, trade and development
      by nawmsayn in ZeeConomics on 2014-11-30 19:02:06

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    Cited by:

    1. Anastasia Litina, 2016. "Natural land productivity, cooperation and comparative development," Journal of Economic Growth, Springer, vol. 21(4), pages 351-408, December.
    2. repec:eee:jcecon:v:46:y:2018:i:1:p:20-34 is not listed on IDEAS
    3. repec:eee:joepsy:v:63:y:2017:i:c:p:184-198 is not listed on IDEAS
    4. Coşgel, Metin & Histen, Matthew & Miceli, Thomas J. & Yıldırım, Sadullah, 2018. "State and religion over time," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 20-34.
    5. Eswaran, Mukesh, 2018. "Decentralized Terrorism and Social Identity," Microeconomics.ca working papers tina_marandola-2018-4, Vancouver School of Economics, revised 06 Jun 2018.
    6. repec:spr:sochwe:v:50:y:2018:i:3:d:10.1007_s00355-017-1093-1 is not listed on IDEAS
    7. Skali, Ahmed, 2017. "Moralizing gods and armed conflict," Journal of Economic Psychology, Elsevier, vol. 63(C), pages 184-198.

    More about this item

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • F10 - International Economics - - Trade - - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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