The Political Economy and Underdevelopment of the Muslim World: A Juridico-Philosophical Perspective

Abstract

The ongoing political turmoil in the Muslim world necessitates an investigation of the factors leading to centuries of underdevelopment. This essay studies the various perspectives (for and against) attributing Islam as a factor holding back the progress of the Muslim economies. We critically appraise why ‘Islamic’ banking is not truly Islamic to identify: (i) the retrograding outlook of the jurists (fuqahā’); and (ii) their flawed ijtihād (interpretation or deduction of the divine sources of law) as the prime factors responsible for the paucity of development of financial instruments, markets and institutions. We also scrutinize co-option of the jurists by the ruling elite, thereby legitimizing their autocracy. Finally, we conclude the paper recommending the rectification of these issues to develop institutions fostering economic growth and development.

Keywords: flawed ijtihād, economic underdevelopment, 'hīlah (ruse), intellectual stalemate, ribā (Islamic injunction protecting property rights).

JEL Classification: G20, O16, Z12