Rent-Seeking Behaviour and Zulm (Injustice/Exploitation) Beyond Riba-Interest Equation

ISRA International Journal of Islamic Finance, Vol. 11, No. 1, pp. 110-123

14 Pages Posted: 11 Jul 2018 Last revised: 29 Jul 2019

Date Written: 2019

Abstract

Prohibition of riba (as part of the Riba-Interest equation) is one of the key dimensions of Islamic economics and finance. While it is recognized that riba is a form of unjust and unearned income or gain, the focus on riba is too narrow to capture the wider implications of unearned income or gain as part of rent-seeking behavior. Islamic economics and finance literature is gradually incorporating the theme of rent-seeking behavior, but there is scanty resource on rent-seeking behavior or rentier economy to put riba, one of the forms of unearned income, in perspective as part of the rent-seeking behavior. Riba is prohibited with a fundamental concern about zulm (injustice and exploitation). However, the scope of riba, especially in the modern context, seems to be much narrower than rent-seeking behavior. This conceptual paper argues that if zulm is a fundamental concern from Islamic viewpoint, then the discourse should be broadened beyond the narrow focus on riba and interest and address rent-seeking behavior and rentier economy in general.

Keywords: Islamic Economics, Islamic Finance, Rent-Seeking Behavior, Rentier Society, Riba, Interest, Riba-Interest Equation, Islamic Banking

JEL Classification: P16, P4, P48

Suggested Citation

Farooq, Mohammad Omar, Rent-Seeking Behaviour and Zulm (Injustice/Exploitation) Beyond Riba-Interest Equation (2019). ISRA International Journal of Islamic Finance, Vol. 11, No. 1, pp. 110-123, Available at SSRN: https://ssrn.com/abstract=3197653 or http://dx.doi.org/10.2139/ssrn.3197653

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