How Islamic are Islamic Countries?

Abstract

In the post 9/11 era, there is growing interest in the complex relationship between religion, economics, finance, politics, law, and social behavior. This has brought with it a disagreement on how to investigate the impact of religiosity, whether religion affects the economic, political, and social outlook of countries or whether these factors affect religiosity? In other words, should religion be viewed as a dependent or an independent variable? In this paper we ask what we believe to be the precursor question to such linkages, namely, do self-declared Islamic countries, as attested by membership in the OIC (Organization of Islamic Conference), embrace policies that are founded on Islamic teachings? We believe that only once this question is addressed can one begin to estimate how Islam adherence to Islam may affect economic, political and social behavior. In the first part of the paper we present what we believe should be the characteristics and scaffolding of an “Islamic" country. We base our depiction on the Quran, and the life, practices and sayings of the Prophet Mohammad -- the two principal channels that provide Muslims with the road map. In the second part, we develop an index to measure the “Islamicity" of Islamic and non-Islamic countries. This IslamicityIndex (or I2) measures 208 countries adherence to Islamic principles using four sub-indices related to economics, legal and governance, human and political rights, and international relations.

How does microfinance prosper? An analysis of environmental, social, and governance context

“…However, the dummy variable is found to be insignificant throughout all models, which implies that MFIs in OIC countries are no different from MFIs in non‐OIC countries. One explanation for this is that OIC countries are not properly adopting Islamic principles (Rehman & Askari, ). However, our proxy variable is unable to capture religious inclination or religiosity of the citizens in the country (Ashraf, Hassan, & Hippler, ).…”

Towards a Maq¯as. id al-Shar¯ı‘ah based Development Index

“…A number of researchers have attempted to derive religious and ethical based socio-economic development indices. Among these include Ethics-Augmented Human Development Index (Dar, 2004), Islamic Human Development Index (Anto, 2010) and Islamicity Index (Rehman & Askari, 2010). However, the existing available value-neutral indices are strongly correlated with these indices .…”

Spiritual Intermediation in Islamic Microfinance: Evidence from Indonesia

“…Indonesia, a country with a majority of Muslim population, only ranks at 140 (15) . Thus, it gave rise to various negative stigma in society that IMFIs are no difference with MFIs (16) The manifestation of low-level of Islamic financial literacy and social piety can be seen from the preferences of the Muslim community who prefer MFIs based on economic factors (low interest rate, small collateral, and the size of the loan) and the non-economic factors (quality of service, ease, speed, closeness, the methods and profiles of loan officers), than relying on religious factor (17) .…”

“…This function is useful for fostering people based on sharia principles and practices (tarbiyah), deeply understood and practiced correctly (kaffah) by all IMFI's stakeholders. IMFI does not only in accordance with the Shari'a in all products, processes and activities, but also must be considered as such by their clients (25) 15 . Similarly, empirical studies that discuss spiritual intermediation in the MFI/IMFI has never been done.…”