The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Islamic Economic Institutions

  • Timur Kuran
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2556

Abstract

The economic institutions of the classical Islamic world include Islamic contract law and the waqf, a form of trust. Until modern times, these two institutions were generally beneficial to economic performance. However, each had limitations that eventually blocked modern economic growth. Islamic contract law discouraged the formation of large and long-lived partnerships, thus obviating the need for business techniques and organizational forms associated with economic modernization. The waqf, designed as a rigid organization, locked capital into inefficient uses. Not until modern times has the corporation, a more flexible organizational form, entered the legal systems of the Islamic world.

Keywords

Charitable contributions Choice of law Contract law Corporation Double-entry bookkeeping Industrial revolution Inheritance Interest Islamic economic institutions Limited liability Partnerships Tax farming Waqf Zakat 

JEL Classifications

N4 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Timur Kuran
    • 1
  1. 1.