Download This PaperZakat: Changing the Framework of Giving
Al-Bawwab, R. A. (2023). Zakat: Changing the framework of giving. Islamic Economic Studies. https://doi.org/10.1108/ies-08-2021-0026
18 Pages Posted: 2 Aug 2021 Last revised: 28 Feb 2023
Date Written: July 30, 2021
Abstract
When the private incentives faced by individuals in a society are not properly aligned with their shared goals, a collective action problem arises. This paper focuses on the free-rider problem of aid, the collective action problem of getting people to contribute privately to charity. It compares zakat, the third pillar of Islam, with voluntary charity to show that zakat solves the collective action problem by changing the very framework of giving.
Keywords: Zakat; Free Riding; Collective Action Problems; Charity; Religion
JEL Classification: H41; I39; P49; Z12
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