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Islam, Inequality and Pre-Industrial Comparative Development

Author

Listed:
  • Stelios Michalopoulos

    (Brown University and the NBER)

  • Alireza Naghavi

    (University of Bologna and Centro Studi Luca d'Agliano)

  • Giovanni Prarolo

    (University of Bologna)

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 com-mitment problem, however, rendered a merely static redistribution system unsustainable. Islam add-ed 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 Mus-lim world they limited the accumulation of wealth by the commercial elite, shaping the economic trajectory of Islamic lands in the preindustrial era.

Suggested Citation

  • Stelios Michalopoulos & Alireza Naghavi & Giovanni Prarolo, 2020. "Islam, Inequality and Pre-Industrial Comparative Development," Development Working Papers 377, Centro Studi Luca d'Agliano, University of Milano.
  • Handle: RePEc:csl:devewp:377
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    References listed on IDEAS

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    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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    6. 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.

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    More about this item

    Keywords

    Religion; Islam; Geography; Inequality in land quality; Wealth accumulation; Public good investment; Trade; Conflict.;
    All these keywords.

    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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