Divergence between Aspirations and Realities of Islamic Economics: A Political Economy Approach to Bridging the Divide

IIUM Journal of Economics and Management, Vol. 17, No. 1, pp. 73-96, 2009

24 Pages Posted: 7 Jan 2011

See all articles by Mehmet Asutay

Mehmet Asutay

Durham Business School

Nazim Zaman

Durham University - School of Government and International Affairs

Date Written: 2009

Abstract

Early writings in Islamic economics depicted a grand and, some would say, utopian image of the type of societal development that would result from implementing Islamic social and economic theory. However, despite the emergence of Islamic economics in a modern sense in the 1960s, we now find that the only manifestation that represents an Islamic alternative to mainstream neo-classical development is the Islamic banking and finance industry (IBF). However, the developments in the IBF industry indicate that it has converged towards conventional finance. Consequently, it has failed to fulfill the institutional and policy aspirations of Islamic economic system. This paper, thus, attempts to identify how such divergence has taken place, presents a conceptual model of development in Islam that goes beyond mere economics and hiqh considerations and suggests a political economy approach to demonstrate that the foundational axioms in fact rely wholly on major institutional implementation. It also identifies the pre-requisites for achieving this that includes political vision, will and leadership.

Suggested Citation

Asutay, Mehmet and Zaman, Nazim Ali, Divergence between Aspirations and Realities of Islamic Economics: A Political Economy Approach to Bridging the Divide (2009). IIUM Journal of Economics and Management, Vol. 17, No. 1, pp. 73-96, 2009. Available at SSRN: https://ssrn.com/abstract=1735627

Mehmet Asutay (Contact Author)

Durham Business School ( email )

Mill Hill Lane
Durham, Durham DH1 3LB
United Kingdom

Nazim Ali Zaman

Durham University - School of Government and International Affairs ( email )

Durham, DH1 3HP
United Kingdom

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