With a predominantly Muslim population which engages in significant private giving, social intermediaries who can transparently and efficiently mobilize charitable giving can enhance the socio-economic impact of private giving. Given the high prevalence of cash based giving and higher trust deficit between people and the public Zakat agency, the Islamic institution of cash Waqf can be suitable for effectively channelizing the charitable giving in the form of cash.
Scarcity of resources is the basic premise on which the theories of classical and neoclassical economics are based upon. It implies that resources are scarce relatively as compared to the wants that are unlimited. But, this premise uses the word ‘wants’ in a general sense which includes both necessities and luxuries that people desire to have.
Islmic economic framework does not argue for a state-led or state-run economy. In fact, Islamic economic principles are very much open and favorable towards market based economy. By enabling market economy to run competitively, an Islamic economy provides market based solutions to employment creation and improvement in living standards through effective and efficient utilization of resources.
Islamic inheritance laws in Islamic economic framework have the potential to permanently and systematically reduce the concentration of wealth in every generation at the most micro level possible.
Abstaining from excessiveness in consumption, usury, speculation, gambling and fraud in trade and by engaging in charitable giving and living one’s life with the realization to be always helpful to the other members of society creates a sea of change if one starts believing in it and practice it.
Non-discretionary fiscal policy with automatic stabilizers can help in stabilizing the business cycles. This article discusses how the institution of Zakat can act as automatic stabilizer in an Islamic economic framework.
Islamic Economics Project 