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

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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 explains why, in general, Muslin countries are generally 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

Suggested Citation

  • François Facchini, 2011. "Economic freedom in Muslim countries: an explanation using the theory of institutional path dependency," Documents de travail du Centre d'Economie de la Sorbonne 11015, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  • Handle: RePEc:mse:cesdoc:11015
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    File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2011/11015.pdf
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    References listed on IDEAS

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    1. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2015. "Institutional stickiness and the New Development Economics," Chapters, in: Laura E. Grube & Virgil Henry Storr (ed.), Culture and Economic Action, chapter 6, pages 123-146, Edward Elgar Publishing.
    2. Liebowitz, S J & Margolis, Stephen E, 1995. "Path Dependence, Lock-in, and History," Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 205-226, April.
    3. Spindler, Zane A, 1991. "Liberty and Development: A Further Empirical Perspective," Public Choice, Springer, vol. 69(2), pages 197-210, February.
    4. De Vanssay, Xavier & Spindler, Z A, 1994. "Freedom and Growth: Do Constitutions Matter?," Public Choice, Springer, vol. 78(3-4), pages 359-372, March.
    5. Francois Facchini, 2010. "Religion, law and development: Islam and Christianity—Why is it in Occident and not in the Orient that man invented the institutions of freedom?," European Journal of Law and Economics, Springer, vol. 29(1), pages 103-129, February.
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    More about this item

    Keywords

    Economic freedom; colonisation; imaginary; Islam; property rights;

    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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