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Islam, Inequality and Pre-Industrial Comparative Development

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  • Stelios Michalopoulos
  • Alireza Naghavi
  • Giovanni Prarolo

Abstract

This study explores the interaction between trade and geography in shaping the Islamic economic doctrine. 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 by groups residing in the poorly endowed territories. We show that in such an environment it was mutually beneficial to institute an economic system of income redistribution featuring income transfers in return for safe passage to conduct trade. A commitment problem, however, rendered a merely static redistribution scheme unsustainable. Islam developed a set of dynamic redistributive rules that were self-enforcing, in regions where arid lands dominated the landscape. 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 pre-industrial era.

Suggested Citation

  • Stelios Michalopoulos & Alireza Naghavi & Giovanni Prarolo, 2015. "Islam, Inequality and Pre-Industrial Comparative Development," NBER Working Papers 21506, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21506
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    References listed on IDEAS

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    Cited by:

    1. Eswaran, Mukesh, 2018. "Decentralized Terrorism and Social Identity," Microeconomics.ca working papers tina_marandola-2018-4, Vancouver School of Economics, revised 06 Jun 2018.
    2. Anastasia Litina, 2016. "Natural land productivity, cooperation and comparative development," Journal of Economic Growth, Springer, vol. 21(4), pages 351-408, December.
    3. repec:eee:jcecon:v:46:y:2018:i:1:p:20-34 is not listed on IDEAS
    4. repec:eee:joepsy:v:63:y:2017:i:c:p:184-198 is not listed on IDEAS
    5. 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.
    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:

    • F10 - International Economics - - Trade - - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Z0 - Other Special Topics - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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