Foundations of Islamic Economics

This module aims to emphasise the practical relevance of Islamic economics through combining the implicit economic insight of jurisprudence (Maqasid al-Shariah) and relevant mainstream economic theory, thereby  yielding a coherent discipline of public moral policy. The scope and significance of Islamic economics is presented within the current debate on economic methodology. Islamic economics emerges as a pragmatic policy-oriented discipline that rests on the Qur'an, the Prophet's tradition (peace by upon him) and the ongoing up to date Itjihad.

Core Module for MA Islamic Banking Finance & Management

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• Introduction of methodology of Islamic economics
• Major structural themes of Islamic economics
• Islamic principles of economic exchange
• Money and productive resources
• Market imperfections: scope and treatments
• Non-market behaviour and public goods
• Economic management of Zakah and Awqaf

Knowledge and understanding

On successful completion of this module students should be able to:

1.     Appreciate the scope, significance, methodology and major structural themes of Islamic economics.

2.     Appreciate the analytical difference between 'trade' and 'usury' as implied in the Qur'an.

3.     Understand the principles of economic exchange through reference to sale contract.

4.     Critically examine the Islamic concept of money, productive factor rewards and return on risks.

5.     Appreciate the breadth of market imperfections in the Islamic perspective and why they include 'gambling and sales’ usury.

6.     Understand the background of Islamic political economy and how it relates to the financing of public goods.

7.     Appreciate the role of Shura in the economic management of Zakah and Awqaf.

Skills

By the end of the module, students should have developed skills in:

1.     Crystallising Islamic moral values in terms of definite public goods.

2.     Working within the existing world economic order with Islamic economic values.

3.     Distinguishing between state moral policy and government discretionary policy.

4.     Analysing economic risk from the Islamic perspective.

5.     Clearly distinguishing between profit rate and forbidden usury.

6.     Appreciating the importance of efficient Zakah management in realising its socio-economic goals.

7.   Analysing the leading role of the third sector through the institution of waqf.

Each student should participate in 150 hours of study, including lectures (6 hours), seminars (6 hours), tutorials (6 hours), plus personal guided study (132 hours).

Examination (2.5 hours, standard closed)              30%                                   

One assignment of 2,500 words                            60%

Presentation                                                       10%

• Ahmed Khurshid, “Nature and Significance of Islamic Economics” published in 'Lectures on Islamic Economics’ IDB/IRTI, 1992.  
• Blaug, M. 1992 ‘The Methodology of Economics’ Cambridge University Press.
• Chapra, Umar 2000. 'The Future of Economics’ Islamic Foundation.
• 2000 ‘What is Islamic Economics’ IDB/IRTI
• Khaf, Monzer.  “Islamic Economics: Notes on Definition and Methodology” published in Review of Islamic Economics, No. 13, 2003.
• Hausman, M. D. & McPherson, M. 2000. ‘Economic Analysis & Moral Philosophy’ Cambridge University Press.
• Tag el-Din, Seif ‘Foundations of Islamic Economics’ unpublished book MIHE forthcoming EUP.
• “Riba Elimination: A measure truly dedicated to poverty alleviation” published in 'Islamic Institutions and the Elimination of Poverty' IDB and the Islamic Foundation and the International Association of Islamic Economics, UK, 2002.
• Buckley, Susan L. 2000 'Teachings on Usury in Judaism, Christianity, and Islam' Edinburgh University Press.  
• Zarqa, Anas, “Islamic Jurisprudence and Economics of Exchange” published in 'Lectures in Islamic Economics’ 1992, Pp. 93-100.
• “Methodology of Islamic Economics”
• Published in 'Lectures on Islamic Economics, 1992.
• Siddiqi M.D. 2000 'Role of the State in Economy’ The Islamic Foundation.  
• Cizakca, Murat, 2000, 'History of Philanthropic Foundations’, Istanbul Bogazici University Press. 

Journals/articles

• The Review of Islamic Economics
• IIUM Journal of Economics and Management
• Journal of King Abdul Azziz University (Islamic Economics).