An Efficiency and Productivity of Zakat Institution in Malaysia and Indonesia: The Comparative Study

Abstract

The efficiency and productivity of Zakat institution have widely discussed, it is an organization based on social which looks after economic disparities. Most recently, Indonesia made a standardization policy and system of zakat institution, so that the zakat institution in Indonesia can reach the same quality or higher rather than other countries. It called Zakat Core Principles. Therefore, this research will focus on the zakat institution in Indonesia and Malaysia. The purpose of this study is to measure and compare the efficiency and productivity using Data Envelopment Analysis (DEA) and Malmquist Productivity Index (MPI), which is a non-parametric and deterministic methodology for determining the relative efficiency and productivity. The result of this research shows, The first quadrant is the best efficient and productive institutions gained by zakat institution in Indonesia namely Sinergi Foundation and 3 zakat institutions in Malaysia namely Kedah, Melayu Perak, and Selangor. The second quadrant is highly productive but low efficient achieved by zakat institutions in Indonesia namely Baznas, RZ, Dompet Dhuafa and 1 zakat institution in Malaysia namely Jawhar. The third quadrant is high efficient but low productive didn’t achieve by any zakat institution in Indonesia or Malaysia. The fourth quadrant is low efficient and low productive reached by 1 zakat institution in Indonesia namely PKPU and 3 zakat institution in Malaysia namely Kelantan, PPZ and Pahang. The implication in this study is describing the position of zakat institution in Indonesia and Malaysia so that it is known which zakat institution could be a role model or benchmarking for other zakat institution.