Abstract
Purpose The purpose of this paper is to explore the concept of rent-seeking behaviour and rentier state in the context of ẓulm (injustice and exploitation), which is one of the key concerns in Islam in general and Islamic economics and finance in particular. Design/methodology/approach As a conceptual paper, it draws on the literature of rent-seeking as part of public choice theory and examines the potential vulnerabilities as well as existence of rent-seeking in Muslim-majority countries, where Islamic finance industry primarily operates. Findings The paper identifies several areas where both actual and potential rent-seeking exists. Research limitations/implications The paper is conceptual. Based on the analysis presented here further studies can be undertaken to determine the scope of rent-seeking and their impact in Muslim-majority societies. Practical implications Incorporating rent-seeking in the theoretical and conceptual framework of Islamic economics and finance can enhance understanding about ẓulm and its ubiquitous presence, as Islam has a firm stance to aspire to have a ẓulm-free society. Social implications Understanding rent-seeking behaviour can help appreciate why corruption, inequality and poverty are so entrenched, and why limiting the discourse to ribā (interest) ignores the broader scope of injustice and exploitation. Originality/value This might be the first focused paper that conceptually deals with rent-seeking behaviour, connecting the discourse about ribā-interest equation.
Highlights
IntroductionThe Islamic finance industry is steadily growing across the Muslim world and beyond
Based on the analysis presented here further studies can be undertaken to determine the scope of rent-seeking and their impact in Muslimmajority societies
The Islamic finance industry is steadily growing across the Muslim world and beyond
Summary
The Islamic finance industry is steadily growing across the Muslim world and beyond. To. Muslims, the key appeal of Islamic finance is avoidance of certain major prohibitions, most importantly, riba, generally equated with interest. The Quran is categorical in prohibiting riba and explicitly mentions linking it with Ázulm that neither party in a (injustice, exploitation). The Quran (2:279) financial transaction should inflict injustice nor be its recipient. ISRA International Journal of Islamic Finance Vol 11 No 1, 2019 pp. The Quran’s sternness in prohibiting riba indicates that it is something exceedingly consequential for any and tafsir (exegesis), rsiobcaieitny.fiAnsanevciiadlentrcaendstahcrtoioungshiesaarlylifIes-lrauminiicnsgouerxcpeesr,iiennccleu;diitnpguhÁtasdtīhthe weaker party in such a transaction on the path of ruin. The Quran calls upon those who persist on riba to get ready for war from God and His Messenger: Rent-seeking behaviour and
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