One of Islam’s five canonical pillars is a predictable, fixed, and mildly progressive tax system called zakat. It was meant to finance various causes typical of a pre-modern government. Implicit in the entire transfer system was personal property rights as well as constraints on government—two key elements of a liberal order. Those features could have provided the starting point for broadening political liberties under a state with explicitly restricted functions. Instead, just a few decades after the rise of Islam, zakat opened the door to arbitrary political rule and material insecurity. A major reason is that the Quran does not make explicit the underlying principles of governance. It simply outlines the specifics of zakat as they related to conditions in seventh-century Arabia.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
On the Quran’s economic vocabulary and comparative counts of particular usages, see Kuran (2010, pp. 493–494).
For example, 2:177, 2:215, 4:8, 9:60, 24:22. “God’s servants” is a translation for fi sabīllilāh, literally “in the cause of Allah”.
Leviticus 25:10. For a history, see Zuckermann (1857/1974).
Slave labor, too, was used to build such structures.
Zakat also has anti-avoidance rules. Transactions undertaken specifically to avoid zakat, such as transferring assets to another person right before the tax is due, do not eliminate the legal duty (Askari et al. 1982, p. 81).
Illiteracy can pose a complementary problem. Illiterate persons depend on what literates select to read from the Quran; they cannot browse through it on their own. Even for literate readers, however, understanding the meanings of verses can be challenging. Few modern Arabs understand classical Arabic, the language of the Quran. The challenge is even more serious for non-Arab Muslims, who form three-quarters of the global Muslim population.
Verse 2:261 says that “those who give their wealth for the cause of Allah” will reap rewards; and verse 59:9 that “those who preserve themselves from their own greed shall surely prosper.” Neither requires resource sharing. On that basis, a plausible interpretation of these verses is that payment is voluntary.
Of the 32 Quranic verses that mention zakat, 20 warn believers that punishment awaits those who do not pay. Sixteen of those 20 verses are from the Medina period.
Quran 9:34–35. Hoarding is condemned also in chapters that Quran chronologists date to the Meccan period; see 70:15–18, 104:1–4.
The verse is 9:60. Its usage of sadaqa came to be interpreted as referring to zakat while maintaining the meaning of voluntary almsgiving in other verses. See Benthall (1999, pp, 29–31).
Quran: 9:98. All chronologies of the Quran consider chapter 9 to be among the latest. See Pearson (1986, pp. 414–419).
The available historical sources do not allow modern interpreters to identify the evolution of zakat practices with confidence. We do not know the full range of controversies surrounding the drastic re-interpretation that occurred soon after the Prophet’s death.
A similar point is made by Rahman (1974, p. 33).
As of 2018, for the five most populated countries of the Middle East (Egypt, Iran, Turkey, Iraq, Saudi Arabia), the average number of ministries is 23.
In modern times, Twelver Shiis have taken this position. Zakat revenue can be used to cover expenses in the community’s common interest (Tabātabā’i 1983, pp. 25–27).
Mattson (2003, p. 39). These jurists included Malik ibn Anas (711–796), Abu Ubayd (770–838), and Ahmad ibn Hanbal (780–855).
Løkkegaard (1950), who focuses on Iraq’s early Islamic centuries, stresses this point. His work mentions zakat just seven times, which is consistent with its loss of significance. Six of the references define zakat, or point out that rulers preferred other taxes, or report that believers sought to avoid paying zakat.
In a sample of 7724 Istanbul waqf deeds, 2146 name “the poor” (fukarâ) among their initial or subsequent beneficiaries (28.8%), and 1202 name mosque employees or other clerics (15.6%). Moreover, 1399 set aside funds for prayer reading, usually for the soul of the founder (18.1%); typically, those funds accrued to clerics. The deeds in question, catalogued in Aydın et al. (2015), represent about half of the 14,000 waqf deeds that Istanbul courts are thought to have registered from 1600 to the mid-1800s. For complementary evidence, see Hoexter (2003, pp. 150–151) and Ginio (2003, pp. 167–171). Ginio shows that of the 89 new waqfs registered in Salonica between 1694 and 1768, 58 delivered resources directly to clerics; the beneficiaries were “the poor” in 23 cases, with the category defined expansively to include clerics.
World Bank (2016). In 2013, the World Bank defined extreme poverty as living on less than $1.90 a day.
Abu Yusuf. (790/1969). Taxation in Islam (trans: Ben Shemesh, A.). Leiden: E. J. Brill.
Al-Ghazali, A. Ha. (1100/1978). Revival of the religious sciences, issued as Imam Ghazali’s ihya ulum-id-din, vol. 1 (trans: Fazul-ul-Karim). Lahore: Sind Sagar Academy.
Al-Mawardi. (1050/1996). The ordinances of government (trans: Wahba, W. H.). Reading: Garnet.
Al-Shiekh, A. (1995). Zakāt. Oxford encyclopedia of the modern Islamic world (vol. 4, 366–370). New York: Oxford University Press.
Askari, H., Cummings, J. T., & Glover, M. (1982). Taxation and tax policies in the Middle East. London: Butterworth Scientific.
Aydın, B., Yurdakul, İ., Işık, A., Kurt, İ., & Yıldız, E. (Eds.). (2015). İstanbul şer’iyye sicilleri vakfiyeler kataloğu. Istanbul: İSAM.
Bashear, S. (1993). On the origins and development of the meaning of zakāt in early Islam. Arabica,40(1), 84–113.
Belhaj, A. (2019). Bayt al-māl. Oxford encyclopedia of Islam and politics. Oxford Islamic studies online. http://www.oxfordislamicstudies.com/article/opr/t342/e0116. Accessed 4 April 2019.
Benhabib, J., & Rustichini, A. (1997). Optimal taxes without commitment. Journal of Economic Theory,77(2), 231–259.
Benthall, J. (1999). Financial worship: The Quranic injunction to almsgiving. Journal of the Royal Anthropological Institute,5(1), 27–42.
Bonner, M. (2003). Poverty and charity in the rise of Islam. In M. Bonner, M. Ener, & A. Singer (Eds.), Poverty and charity in Middle Eastern contexts (pp. 13–30). Albany, NY: State University of New York Press.
Bravmann, M. (1963). Surplus of property: An early Arab social concept. Der Islam,38(1), 28–50.
Cahen, C. (1956). La régime des impôts dans le Fayyūm Ayyūbide. Arabica,3(1), 8–30.
Cahen, C. (1986). Bayt al-māl, history. Encyclopaedia of Islam (2nd ed., vol. 1, pp. 1143–1147). Leiden: E. J. Brill.
Cansunar, A. (2018). Redistribution by the rich: Information, perceptions, and preferences. Ph.D. dissertation, Duke University.
Cansunar, A., & Kuran, T. (2019). Economic harbingers of political modernization: Peaceful explosion of rights in Ottoman Istanbul. Working paper, Duke University.
Cantoni, D., Dittmar, J., & Yuchtman, N. (2018). Religious competition and reallocation: The political economy of secularization in the Protestant Reformation. Quarterly Journal of Economics,133(4), 2037–2096.
Cohen, M. (2005). Feeding the poor and clothing the naked: The Cairo Geniza. Journal of Interdisciplinary History,35(3), 407–421.
Commins, D. D. (1990). Islamic reform: Politics and social change in late Ottoman Syria. New York: Oxford University Press.
Constable, G. (1964). Monastic tithes: From their origins to the twelfth century. Cambridge: Cambridge University Press.
Coşgel, M. (2006). Taxes, efficiency, and redistribution: Discriminatory taxation of villages in Ottoman Palestine, Southern Syria, and Transjordan in the sixteenth century. Explorations in Economic History,43(2), 332–356.
Coulson, N. (1986). Bayt al-māl. Encyclopaedia of Islam (2nd ed., vol. 1, pp. 1141–1143). Leiden: E. J. Brill.
Cox, G. W. (2012). Was the Glorious Revolution a constitutional watershed? Journal of Economic History,72(3), 567–600.
Crone, P. (1987). Meccan trade and the rise of Islam. Princeton: Princeton University Press.
Duri, A. (2011). Early Islamic institutions: Administration and taxation in the Caliphate to the Umayyads and ʿAbbāsids. New York: I. B. Tauris.
Ekelund, R. B., Tollison, R. D., Anderson, G. M., Hébert, R. F., & Davidson, A. B. (1994). Sacred trust: The Medieval Church as an economic firm. New York: Oxford University Press.
Finer, S. E. (1997). The history of government, vol. 1. Oxford: Oxford University Press.
Floor, W. (1998). A fiscal history of Iran in the Safavid and Qajar periods, 1500–1925. New York: Bibliotheca Persica Press.
Gaus, G. (2015). The egalitarian species. Social Philosophy and Policy,31(2), 1–27.
Ginio, E. (2003). Living on the margins of charity: Coping with poverty in an Ottoman provincial city. In M. Bonner, M. Ener, & A. Singer (Eds.), Poverty and charity in Middle Eastern contexts (pp. 165–184). Albany, NY: State University of New York Press.
Greif, A. (2006). Institutions and the path to the modern economy: Lessons from medieval trade. New York: Cambridge University Press.
Greif, A., & Rubin, J. (2015). Endogenous political legitimacy: The English Reformation and the institutional foundations of limited government. Working paper, Stanford University.
Henkelman, W. F. M., & Kleber, K. (2007). Babylonian workers in the Persian heartland: Palace building at Matannan during the reign of Cambyses. In C. Tuplin (Ed.), Persian responses: Political and cultural interaction with(in) the Achaemenid Empire (pp. 163–176). Oxford: Classical Press of Wales.
Henrich, N., & Henrich, J. (2007). Why humans cooperate: A cultural and evolutionary explanation. Oxford: Oxford University Press.
Hoexter, M. (2003). Charity, the poor, and distribution of alms in Ottoman Algiers. In M. Bonner, M. Ener, & A. Singer (Eds.), Poverty and charity in Middle Eastern contexts (pp. 145–162). Albany, NY: State University of New York Press.
Holmes, G. (1962). The later Middle Ages, 1272–1485. Edinburgh: Thomas Nelson and Sons.
Hurgronje, C. S. (1882/1957). La zakāt. In Œuvres choisies, edited by Bousquet, G.-H. & Schacht, J. (pp. 150–170). Leiden: E.J. Brill.
Ibrahim, M. (1990). Merchant capital and Islam. Austin: University of Texas Press.
Issawi, C. (1982). An economic history of the Middle East and North Africa. New York: Columbia University Press.
Jabbari, A. (1981). Economic factors in Iran’s revolution: Poverty, inequality, and inflation. In A. Jabbari & R. Olson (Eds.), Iran: Essays on a revolution in the making (pp. 163–214). Lexington, KY: Mazda Publishers.
Johnson, N. D., & Koyama, M. (2019). Persecution and toleration: The long road to religious freedom. Cambridge: Cambridge University Press.
Kuran, T. (2001). The provision of public goods under Islamic law: Origins, impact, and limitations of the waqf system. Law and Society Review,35(4), 841–897.
Kuran, T. (2003). Islamic redistribution through zakat: Historical record and modern realities. In M. Bonner, M. Ener, & A. Singer (Eds.), Poverty and charity in Middle Eastern contexts (pp. 275–293). Albany, NY: State University of New York Press.
Kuran, T. (2010). Modern Islam and the economy. In R. W. Hefner (Ed.), The new Cambridge history of Islam: Volume 6, Muslims and modernity, culture and society since 800 (pp. 473–494). Cambridge: Cambridge University Press.
Kuran, T. (2011). The long divergence: How Islamic law held back the Middle East. Princeton, NJ: Princeton University Press.
Kuran, T. (2016). Legal roots of authoritarian rule in the Middle East: Civic legacies of the Islamic waqf. American Journal of Comparative Law,64(2), 419–454.
Lapidus, I. M. (1969). The grain economy of Mamluk Egypt. Journal of the Economic and Social History of the Orient,12(1), 1–15.
Løkkegaard, F. (1950). Islamic taxation in the classic period, with special reference to circumstances in Iraq. Copenhagen: Branner and Korch.
Marcus, A. (1990). Poverty and poor relief in eighteenth-century Aleppo. Révue du Monde Musulman et de la Méditerranée,55–56(1–2), 171–179.
Mattson, I. (2003). Status-based definitions of need in early Islamic zakat and maintenance laws. In M. Bonner, M. Ener, & A. Singer (Eds.), Poverty and charity in Middle Eastern contexts (pp. 31–51). Albany, NY: State University of New York Press.
Mendelsohn, I. (1962). Corvée labor in ancient Canaan and Israel. Bulletin of the American Schools of Oriental Research,167(3), 31–35.
Millar, F. (1984). Condemnation to hard labour in the Roman Empire, from the Julio-Claudians to Constantine. Papers in the British School at Rome,52, 124–147.
Mirrlees, J. A. (1986). The theory of optimal taxation. In K. J. Arrow & M. Intriligator (Eds.), Handbook of mathematical economics (Vol. 3, pp. 1197–1249). Amsterdam: North-Holland.
North, D. C., Wallis, J. J., & Weingast, B. R. (2009). Violence and social orders: A conceptual framework for interpreting recorded history. Cambridge: Cambridge University Press.
North, D. C., & Weingast, B. R. (1989). Constitutions and commitment: The evolution of institutions governing public choice in 17th-century England. Journal of Economic History,49(4), 803–832.
Oran, A., & Rashid, S. (1989). Fiscal policy in early Islam. Public Finance,44(1), 75–101.
Owen, R. (1993). The Middle East in the world economy, 1800–1914 (revised edn). London: I. B. Tauris.
Owen, R., & Pamuk, Ş. (1999). A history of Middle East economies in the twentieth century. Cambridge, MA: Harvard University Press.
Özbek, N. (2009). ‘Beggars’ and ‘vagrants’ in Ottoman state policy and public discourse. Middle Eastern Studies,45(5), 783–801.
Pearson, J. D. (1986). Al-Kur’ān. Encyclopaedia of Islam (2nd ed., vol. 5, pp. 400–432). Leiden: Brill.
Platteau, J.-P. (2001). Institutions, social norms, and economic development. Amsterdam: Harwood.
Posner, R. A. (1981). The economics of justice. Cambridge, MA: Harvard University Press.
Rahman, F. (1974). Islam and problem of economic justice. Pakistan Economist (August 24), 14–39.
Rodinson, M. (1966/1972). Islam and capitalism (trans: Pearce, B.). New York: Pantheon.
Sabra, A. (2000). Poverty and charity in medieval Islam: Mamluk Egypt, 1250–1517. Cambridge: Cambridge University Press.
Sabry, S. (2010). How poverty is underestimated in Greater Cairo, Egypt. Environment and Urbanization,22(2), 523–541.
Schacht, J. (1934). Zakāt. Encyclopedia of Islam (vol. 3, pp. 1202–1204). Leiden: E. J. Brill.
Scheidel, W. (2017). Slavery and forced labour in early China and the Roman world. In H. J. Kim, F. J. Vervaet, & S. F. Adalı (Eds.), Eurasian empires in Antiquity and the early Middle Ages: Contact and exchange between the Graeco-Roman world, Inner Asia and China (pp. 133–150). Cambridge: Cambridge University Press.
Shaban, M. A. (1971). Islamic history: A new interpretation, vol. 1. Cambridge: Cambridge University Press.
Sijpesteijn, P. M. (2013). Shaping a Muslim state: The world of a mid-eighth-century Egyptian official. Oxford: Oxford University Press.
Stasavage, D. (2002). Credible commitment in early modern Europe: North and Weingast revisited. Journal of Law Economics and Organization,18(1), 155–186.
Stillman, N. A. (1975). Charity and social service in medieval Islam. Societas,5(2), 105–115.
Tabātabā’i, H. M. (1983). Kharāj in Islamic law. London: Anchor Press.
Tanner, N., & Watson, S. (2006). Least of the laity: The Minimum requirements for a medieval Christian. Journal of Medieval History,32(4), 395–423.
The Koran. (1974). Translated with notes by Dawood, N. J. (4th rev edn). Harmondsworth, Middlesex: Penguin Classics.
Tsugitaka, S. (2007). Fiscal administration in Syria during the reign of Sultan al-Nāsir Muhammad. Mamluk Studies Review,11(1), 19–37.
Webber, C., & Wildavsky, A. (1986). A history of taxation and expenditure in the Western world. New York: Simon and Schuster.
Wittfogel, K. A. (1957). Oriental despotism: A comparative study of total power. New Haven: Yale University Press.
World Bank. (2016). Taking on inequality: Poverty and shared prosperity 2016. Washington, DC: World Bank.
Yılmaz, B. (2008). Entrapped in multidimensional exclusion: The perpetuation of poverty among conflict-induced migrants in an İstanbul neighborhood. New Perspectives on Turkey,38, 205–234.
Zuckermann, B. (1857/1974). A treatise on the sabbatical cycle and the jubilee (trans: Löwy, A.) New York: Hermon Press.
Zysow, A. (2002). Zakāt. Encyclopaedia of Islam (2nd ed., vol. 11, p. 406–422). Leiden: E.J. Brill.
Gloria Cheung and Dean Dulay provided excellent assistance, and helpful suggestions came from four anonymous referees. For financial support, I am grateful to the Religious Freedom Project of the Berkley Center for Religion, Peace, and World Affairs at Georgetown University. Funding was provided through Georgetown University’s Grant No. CON-005644.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
About this article
Cite this article
Kuran, T. Zakat: Islam’s missed opportunity to limit predatory taxation. Public Choice 182, 395–416 (2020). https://doi.org/10.1007/s11127-019-00663-x
- Property rights