Analysis of the Influence of Contemporary Economic Law on Public Policy in Muslim Majority Countries
Abstract
Modern economic law is very dynamic and covers a lot of things about markets, investment, fiscal policy, and international trade. Sharia principles that emphasize fairness, transparency, and prohibition of usury often influence the implementation of economic law in Muslim-majority countries. The main objective of this study is to analyze the impact of modern economic law on public policy in Muslim-majority countries. Specifically, this study aims to identify the principles of modern economic law that are relevant to Muslim-majority countries, evaluate how these principles are incorporated into public policy, and assess the impact of the application of modern economic law on increasing democratic expectations. This study uses a qualitative approach with a case study method. Data were collected through in-depth interviews with legal and economic experts, public policy observations in several Muslim-majority countries such as Indonesia, Malaysia, and Saudi Arabia. The results of the study show that Muslim-majority countries face various difficulties in integrating sharia values with the principles of modern economic law. This study finds that modern economic law influences public policy in Muslim-majority countries. It is possible to promote inclusive and sustainable economic growth by incorporating Sharia principles into the structure of modern economic law. However, successful implementation depends largely on the government’s ability to balance market rules with religious principles.
Full text article
References
Abasimel, N.A. (2023). Islamic Banking and Economics: Concepts and Instruments, Features, Advantages, Differences from Conventional Banks, and Contributions to Economic Growth. Journal of the Knowledge Economy, 14(2), 1923–1950.https://doi.org/10.1007/s13132-022-00940-z
Abubakar, M., Hassan, MK, & Haruna, M.A. (2019). Cryptocurrency Tide and Islamic Finance Development: Any Issue? In J. J. Choi & B. Ozkan (Eds.), International Finance Review (pp. 189–200). Emerald Publishing Limited.https://doi.org/10.1108/S1569-376720190000020019
Akbar, T., & Siti-Nabiha, AK (2022). Objectives and measures of performance of Islamic microfinance banks in Indonesia: The stakeholders' perspectives. ISRA International Journal of Islamic Finance, 14(2), 124–140.https://doi.org/10.1108/IJIF-11-2020-0231
AlAbbad, A., Anantharaman, D., & Govindaraj, S. (2021). Depositor Characteristics and the Performance of Islamic Banks. Journal of Accounting, Auditing & Finance, 36(3), 643–666.https://doi.org/10.1177/0148558X20916338
Albarrak, H., & El-Halaby, S. (2019). AAOIFI governance standards: Sharia disclosure and financial performance for Islamic banks. Journal of Governance and Regulation, 8(1), 19–37.https://doi.org/10.22495/jgr_v8_i1_p2
Archer, S., & Abdel Karim, R.A. (2019). When benchmark rates change: The case of Islamic banks. Journal of Financial Regulation and Compliance, 27(2), 197–214.https://doi.org/10.1108/JFRC-11-2017-0104
Ascarya, A., Hosen, MN, & Rahmawati, S. (2022). Designing simple productive waqf models for Indonesia. International Journal of Ethics and Systems, 38(3), 380–401.https://doi.org/10.1108/IJOES-07-2020-0101
Aslam, F., Ferreira, P., Ali, H., Arifa, & Oliveira, M. (2023). Islamic vs. Conventional Equity Markets: A Multifractal Cross-Correlation Analysis with Economic Policy Uncertainty. Economies, 11(1), 16.https://doi.org/10.3390/economies11010016
Baehaqi, A., Birton, MNA, & Hudaefi, F.A. (2020). Time value of money in Islamic accounting practice: A critical analysis from maq??id al-Shar?'ah. Journal of Islamic Accounting and Business Research, 11(10), 2035–2052.https://doi.org/10.1108/JIABR-09-2018-0155
Bakkar, Y., & Ögcem, A. R. (2019). Democracy and Economic Development: Disentangling the Effect of Elections and the Rule of Law. Baltic Journal of European Studies, 9(4), 173–205.https://doi.org/10.1515/bjes-2019-0042
Bektas, E., Elbadri, M., & Molyneux, P. (2022). Do institutions, religion and the economic cycle impact bank stability in dual banking systems? Journal of International Financial Management & Accounting, 33(2), 252–284.https://doi.org/10.1111/jifm.12146
Bin-Nashwan, S.A., Abdul-Jabbar, H., Aziz, S.A., & Sarea, A. (2021). Zakah compliance in Muslim countries: An economic and socio-psychological perspective. Journal of Financial Reporting and Accounting, 19(3), 392–411.https://doi.org/10.1108/JFRA-03-2020-0057
Bin-Nashwan, S.A., Abdul-Jabbar, H., Aziz, S.A., & Viswanathan, K.K. (2020). A socio-economic model of Zakah compliance. International Journal of Sociology and Social Policy, 40(3/4), 304–320.https://doi.org/10.1108/IJSSP-11-2019-0240
Cahyandari, R., Kalfin, Sukono, Purwani, S., Ratnasari, D., Herawati, T., & Mahdi, S. (2023). The Development of Sharia Insurance and Its Future Sustainability in Risk Management: A Systematic Literature Review. Sustainability, 15(10), 8130.https://doi.org/10.3390/su15108130
Daud, Mohd. K., & Akbar, R. (2020). Hareuta Peunulang: Protection of Women in Aceh according to Customary and Islamic law. SAMARAH: Journal of Family Law and Islamic Law, 4(1), 259.https://doi.org/10.22373/sjhk.v4i1.5921
Delle Foglie, A., & Keshminder, J. S. (2022). Challenges and opportunities of SRI sukuk toward financial system sustainability: A bibliometric and systematic literature review. International Journal of Emerging Markets.https://doi.org/10.1108/IJOEM-04-2022-0601
Djatmiko, H. (2019). Re-formulation of the zakat system as tax reduction in Indonesia. Indonesian Journal of Islam and Muslim Societies, 9(1), 135.https://doi.org/10.18326/ijims.v9i1.135-162
Elmawazini, K., Khiyar, K.A., & Aydilek, A. (2020). Types of banking institutions and economic growth. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 553–578.https://doi.org/10.1108/IMEFM-09-2018-0304
Gengler, J.J., Alkazemi, M.F., & Alsharekh, A. (2021). Who Supports Honor-Based Violence in the Middle East? Findings From a National Survey of Kuwait. Journal of Interpersonal Violence, 36(11–12), NP6013–NP6039.https://doi.org/10.1177/0886260518812067
Guizani, M., & Abdalkrim, G. (2021). Does Shariah compliance affect corporate cash holdings and cash adjustment dynamics? Evidence from Malaysia. Pacific Accounting Review, 33(4), 459–473.https://doi.org/10.1108/PAR-07-2020-0100
Hafandi, A., & Handayati, P. (2021). Is Cash Waqf Linked Sukuk (CWLS) Less Than Ideal According to Islamic Laws? Studies of Applied Economics, 39(12).https://doi.org/10.25115/eea.v39i12.6207
Hakim, SA (2019). ANALYTICAL FRAMEWORK FOR STUDY THE FATWAS OF SHARIA ECONOMICS. AHKAM: Journal of Sharia Science, 19(2).https://doi.org/10.15408/ajis.v19i2.12219
Hisam Ahyani, Memet Slamet, & Tobroni. (2021). Building the Values of Rahmatan Lil 'Alamin for Indonesian Economic Development at 4.0 Era from the Perspective of Philosophy and Islamic Economic Law. AL-IHKAM: Journal of Law & Social Institutions, 16(1), 121–151.https://doi.org/10.19105/al-lhkam.v16i1.4550
Ho, HMY (2021). Localization of Malay Muslim Identity in Brunei Darussalam: A Modern Nation's Cultural and Economic Goals. In HMY Ho & D. Deterding (Eds.), Engaging Modern Brunei (pp. 127–143). Springer Singapore.https://doi.org/10.1007/978-981-33-4721-2_8
Hussein Kakembo, S., Abduh, M., & Pg Hj Md Salleh, PMHA (2021). Adopting Islamic microfinance as a mechanism of financing small and medium enterprises in Uganda. Journal of Small Business and Enterprise Development, 28(4), 537–552.https://doi.org/10.1108/JSBED-04-2019-0126
Iskandar, A., Bayu Taufiq Possumah, Khaerul Aqbar, & Akhmad Hanafi Dain Yunta. (2021). Islamic Philanthropy and Poverty Reduction in Indonesia: The Role of Integrated Islamic Social and Commercial Finance Institutions. AL-IHKAM: Journal of Law & Social Institutions, 16(2), 274–301.https://doi.org/10.19105/al-lhkam.v16i2.5026
Kusumaningtyas, RO, Subekti, R., Jaelani, AK, Orsantinutsakul, A., & Mishra, UK (2022). Reduction of Digitalization Policy in Indonesian MSMEs and Implications for Sharia Economic Development. JURIS (Shariah Scientific Journal), 21(2), 157.https://doi.org/10.31958/juris.v21i2.6855
Lattanzio, G. (2022). Beyond religion and culture: The economic consequences of the institutionalization of sharia law. Emerging Markets Review, 52, 100918.https://doi.org/10.1016/j.ememar.2022.100918
Mahdi Syahbandir, Wais Alqarni, Dahlawi Maz, Abdul Hakim, & Bunyamin Muhiddin. (2022). State Authority for Management of Zakat, Infaq, and Sadaqah as Locally-Generated Revenue: A Case Study at Baitul Mal in Aceh. AL-IHKAM: Journal of Law & Social Institutions, 17(2), 554–577.https://doi.org/10.19105/al-lhkam.v17i2.7229
Mensi, W., Hammoudeh, S., Tiwari, A.K., & Al-Yahyaee, K.H. (2020). Impact of Islamic banking development and major macroeconomic variables on economic growth for Islamic countries: Evidence from panel smooth transition models. Economic Systems, 44(1), 100739.https://doi.org/10.1016/j.ecosys.2019.100739
Nazaruddin, L.O., Gyenge, B., Fekete-Farkas, M., & Lakner, Z. (2023). The Future Direction of Halal Food Additive and Ingredient Research in Economics and Business: A Bibliometric Analysis. Sustainability, 15(7), 5680.https://doi.org/10.3390/su15075680
Pranata, AW, Yuliana, ND, Amalia, L., & Darmawan, N. (2021). Volatilomics for halal and non-halal meatball authentication using solid-phase microextraction–gas chromatography–mass spectrometry. Arabian Journal of Chemistry, 14(5), 103146.https://doi.org/10.1016/j.arabjc.2021.103146
Revkin, M.R. (2021). Competitive Governance and Displacement Decisions Under Rebel Rule: Evidence from the Islamic State in Iraq. Journal of Conflict Resolution, 65(1), 46–80.https://doi.org/10.1177/0022002720951864
Saharuddin, D., Meirison, M., Chusna, I., & Mulazid, AS (2020). Capitulation and Siyasah Syar'iyah Al-Maliyah Impact on Economic Stability of the 18th & 19th Ottoman Turks. QIJIS (Qudus International Journal of Islamic Studies), 7(2), 329.https://doi.org/10.21043/qijis.v7i2.4847
Sencal, H., & Asutay, M. (2019). The emergence of new Islamic economic and business morality. Thunderbird International Business Review, 61(5), 765–775.https://doi.org/10.1002/tie.22064
Shovkhalov, S., & Idrisov, H. (2021). Economic and Legal Analysis of Cryptocurrencies: Scientific Views from Russia and the Muslim World. Laws, 10(2), 32.https://doi.org/10.3390/laws10020032
State Institute of Islamic Studies (IAIN), Hadi, R., Sochimin, State Institute of Islamic Studies (IAIN), Basit, A., & State Institute of Islamic Studies (IAIN). (2021). Sharia strategic economic model on digital zakat technology in Indonesia. Economic Annals-??I, 187(1–2), 82–89.https://doi.org/10.21003/ea.V187-08
Sukmana, R. (2020). Critical assessment of Islamic endowment funds (Waqf) literature: Lessons for government and future directions. Heliyon, 6(10), e05074.https://doi.org/10.1016/j.heliyon.2020.e05074
Sulistiani, SL (2021). The Legal Position of Waqf for Non-Muslims in Efforts to Increase Waqf Assets in Indonesia. Samarah: Journal of Family Law and Islamic Law, 5(1), 357.https://doi.org/10.22373/sjhk.v5i1.9161
Suryani, I., Muhtar, MH, Rahman, YM, Mega Jaya, BP, & Khalaf, AA (2023). Integration of Islamic Law in Regional Development in Indonesia. JURIS (Jurnal Ilmiah Syariah), 22(1), 1.https://doi.org/10.31958/juris.v22i1.8770
Syahbandir, M., Alqarni, W., Abbas, S., Ali, B., & Samad, F. (2022). State and Islamic Law: A Study of Legal Politics on Zakat as a Tax Deduction in Aceh. AHKAM: Journal of Sharia Science, 22(1).https://doi.org/10.15408/ajis.v22i1.26200
Wan Ibrahim, WH, & Ismail, AG (2020). DO REGULATION, MAQASID SHARIAH AND INSTITUTIONAL PARAMETERS IMPROVE ISLAMIC BANK EFFICIENCY? Journal of Islamic Monetary Economics and Finance, 6(1).https://doi.org/10.21098/jimf.v6i1.1195
Zada, K., Windy Triana, Nur Hidayah, Ummi Kultsum, & Fathudin. (2022). Muslim Youth Under Sharia Regime in Aceh: From Accommodation to Resistance. AL-IHKAM: Journal of Law & Social Institutions, 17(2), 412–433.https://doi.org/10.19105/al-lhkam.v17i2.7262
Zaman, A. (2019). Islam's Gift: An Economy of Spiritual Development. The American Journal of Economics and Sociology, 78(2), 443–491.https://doi.org/10.1111/ajes.12272
Zawawi, Z., Yasin, Y., Helmy, MI, Ma'yuf, A., & Arwani, A. (2023). Waqf and sustainable development law: Models of waqf institutions in the Kingdom of Saudi Arabia and Indonesia. Ijtihad: Journal of Islamic Law and Humanitarian Discourse, 23(1), 93–114.https://doi.org/10.18326/ijtihad.v23i1.93-114
Authors
Copyright (c) 2024 Syamsu Rijal, Scherschligt Oscar, Morse Kathryn
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.