The Economic Ascent of the Middle East's Religious Minorities: The Role of Islamic Legal Pluralism

Abstract:     
In the nineteenth century the Middle East's Christian and Jewish minorities registered conspicuous economic advances relative to the Muslim majority. These advances are generally linked to trans-national networks stretching into Western Europe. Left unclear is why non-Muslims joined these networks in vastly disproportionate numbers and why the networks proved especially lucrative in the early modern era. The missing link is the choice of law available to non-Muslim subjects. Until the late eighteenth century, on matters critical to financial and commercial success non-Muslims tended to exercise this privilege in favor of Islamic law; and this pattern prompted their own court systems to emulate Islamic legal practices. However, as Western Europe developed the legal infrastructure of modern capitalism, vast numbers of Christians and Jews made jurisdictional switches by obtaining the protection of European states. Along with tax concessions, they thus gained the ability to conduct business under Western laws.

Keywords: Islam, Islamic World, Middle East, Economic Development, Modernization, Choice of Law, Legal Pluralism, Minorities, Christians, Armenians, Greeks, Jews, Muslims, Partnership, Courts, Banking, Commerce, Inheritance

JEL Classification: N85, K00, O58, P48, P50

Accepted Paper Series