A Treatise on Socioeconomic Roles of Zakah
A major preoccupation of policymakers is the design and implementation of public policy for efficient resource mobilization, allocation, stabilization of the economy and redistribution of wealth to guarantee minimum standard of living for all. At the extremes, the Capitalist and Socialist systems are characterized by the supremacy of self-interest in the former and total state control in the latter. Exacerbated by the prevalence of riba in the systems, unwanted economic outcomes; social and economic inequality, poverty, unemployment, crimes, booms and recessions, thrive. The Islamic economic system which blends the material pursuit with spiritual upliftment tailors economic policies towards attainment of Maqasid al-Shari’ah. As a pillar of Islam and an omnibus instrument of economic stabilization, Zakah serves as an automatic catalyst with backward and forward implications on resource mobilization, allocation, stabilization and redistribution of wealth. Using a heuristic approach, the paper conducts an in-depth assessment of the socioeconomic impact of Zakah in an Islamic economy. Evidences from review of both classical and empirical literature unveil the positive impact of Zakah on consumption, savings, investment leading to employment and higher productivity, (Kahf 1980; Metwally 1983; Khan 1984;Ahmad, 1985; Kuran 2006; Azmi, 2009 and Norulazidah, Ali & Myles,2010. Further, Zakah acts as an expansionary tool to those at lower income level and a discretionary tool to those at higher income level to redistribute income, remove poverty and facilitates provision of desired public good for the benefit of the poor Faridi (1983). The paper posits that in view of the overwhelming empirical evidences in the literature, Zakah is an effective tool for tackling socioeconomic problems of our modern times.
|Date of creation:||01 Sep 2017|
|Date of revision:||05 Sep 2017|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:81155. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.