Cultural Financial Traditions and Universal Ethics: The Case of Hawala

37 Pages Posted: 25 Aug 2014 Last revised: 13 Jul 2015

See all articles by Dulce Redin

Dulce Redin

University of Navarra

Reyes Calderon

University of Navarra

Ignacio Ferrero

School of Economics and Business

Date Written: October 1, 2012

Abstract

Taking into account the global expansion that certain traditional financial practices like hawala have experienced in the last decades, it is undeniable that both cultural diversity and different moral perceptions have become relevant questions in the international financial arena. Consequently, hawala, an ancient financial system profoundly rooted in Islamic moral traditions, offers an extraordinary setting to explore over a real institution the theoretical debate about the potential universality of ethics. Moreover, hawala makes us think over the relationship among legality, formality and morality.

This paper discusses the economic, social and ethical features of hawala, in order to shed some light into the question of whether diverse economic phenomena may be judged under Western standards or rather it is necessary to appeal to a superior body of universal values, respectful with the different cultures and religions. The authors show that the current — legalistic — approach to hawala results overly partial and biased. Therefore they conclude that it is essential to bring about a change towards a more ethically, culturally and economically sensitive approach, which would enable hawala to develop its full potential and become a vehicle for financial and economic development. It is necessary to consider the “hyper-norms” and fundamental principles inherent to humanity, which are common to both “formal” and “informal”, “Western” and “non-Western” financial practices, when designing a legal framework for these cultural financial traditions.

Keywords: Alternative remittance systems, Hawala, AML/CFT regulation, Virtue ethics, Triple Font Theory

Suggested Citation

Redin, Dulce and Calderon, Reyes and Ferrero, Ignacio, Cultural Financial Traditions and Universal Ethics: The Case of Hawala (October 1, 2012). Journal of Business Ethics, DOI: 10.1007/s10551-013-1874-0, Available at SSRN: https://ssrn.com/abstract=2486079 or http://dx.doi.org/10.2139/ssrn.2486079

Dulce Redin

University of Navarra ( email )

Camino del Cerro del Aguila, 3
Pamplona, Navarra 31080
Spain

Reyes Calderon

University of Navarra ( email )

Camino del Cerro del Aguila, 3
Pamplona, Navarra 31080
Spain

Ignacio Ferrero (Contact Author)

School of Economics and Business ( email )

Edificio Bibliotecas-Este
Pamplona, Navarra 31080
Spain

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