Institutional Values Needed for Transformative Socio-economic Development in the Muslim World

Abstract

There is a growing amount of literature that tries to explain what institutions are, how they are established and how they can be reformed for desired social and economic development. This paper explores key institutional values needed for transformative socio-economic development in the Muslim world. The paper begins by examining the role of uplifting institutional values found in the Golden Ages of the Muslim world and how they moved to the West. It then presents new institutional economics as an effective tool to understand long-term development. The paper adds a new layer to institutional economics literature by addressing the importance of hidden internalized institutional values (liberty, critical thinking, justice, rule of law, equality, participatory culture, accountability, competency, punctuality, and plurality) in explaining the socio-economic success of the West and failure of the Muslim world over the last few centuries. The paper concludes with some developmental policy recommendations for Muslim countries based on these internalized institutional values.