Religion and Ethics-Based Economic and Financial Systems: A Survey of Insights into Islamic Economics and Finance

Abstract

This article examines the foundations of Islamic economic thought and its implications for a financial system as developed by its key proponent, Sayyid Abul Ala Mawdūdī, and his disciples. A critical analysis of the ideology follows this examination. We explore the reasons for it not finding general support in the mainstream academic circles, and for not leading to meaningful and innovative financial products or economic programs. Our analysis and the extant empirical evidence support the idea that the Islamic economics’ framework needs major revisions. It appears from our survey and analysis of the recent literature that Islamic economics and finance is still a work in progress and has a long way to go before it can offer a viable market-consistent alternative to the modern banking and financial system.