Islam and Economic Performance: Historical and Contemporary Links
Journal of Economic Literature
no. 4, December 2018
This essay critically evaluates the analytic literature concerned with causal connections between Islam and economic performance. It focuses on works since 1997, when this literature was
last surveyed. Among the findings are the following: Ramadan fasting by pregnant women harms prenatal development; Islamic charities mainly benefit the middle class; Islam affects
educational outcomes less through Islamic schooling than through structural factors that handicap learning as a whole; Islamic finance hardly affects Muslim financial behavior; and low
generalized trust depresses Muslim trade. The last feature reflects the Muslim world's delay in transitioning from personal to impersonal exchange. The delay resulted from the persistent
simplicity of the private enterprises formed under Islamic law. Weak property rights reinforced the private sector's stagnation by driving capital out of commerce and into rigid waqfs. Waqfs
limited economic development through their inflexibility and democratization by restraining the development of civil society. Parts of the Muslim world conquered by Arab armies are
especially undemocratic, which suggests that early Islamic institutions, including slave-based armies, were particularly critical to the persistence of authoritarian patterns of governance.
States have contributed themselves to the persistence of authoritarianism by treating Islam as an instrument of governance. As the world started to industrialize, non-Muslim subjects of
Muslim-governed states pulled ahead of their Muslim neighbors by exercising the choice of law they enjoyed under Islamic law in favor of a Western legal system.
"Islam and Economic Performance: Historical and Contemporary Links."
Journal of Economic Literature,
Economic History: Financial Markets and Institutions: Asia including Middle East
Economic History: Government, War, Law, International Relations, and Regulation: Asia including Middle East
Institutions and Growth
Economywide Country Studies: Asia including Middle East
Comparative Analysis of Economic Systems
Cultural Economics: Religion