Resource Rich Muslim Countries and Islamic Institutional Reforms
Summary
Excerpt
Table Of Contents
- Cover
- Title
- Copyright
- About the author(s)/editor(s)
- About the book
- This eBook can be cited
- Contents
- Illustrations
- Figure
- Tables
- Foreword (Latifah Merican Cheong)
- Preface
- Acknowledgments
- Abbreviations
- Chapter 1: The OIC Countries
- Introduction
- OIC Countries and the Resource Curse
- Conclusion
- References
- Chapter 2: The Resource Curse—Theory, Explanations and Its Reversal
- Introduction
- The Resource Curse Theory—Sachs and Warner
- Supporters of the Resource Curse Theory
- Resource Curse Explanation—Dutch Disease
- Resource Curse Explanation—The Role of Institutions (Nigerian Disease)
- Military Expenditures, Armed Conflicts and the Resource Curse Theory
- Assessment of the Explanations for the Resource Curse
- Natural Resource Effects on Financial Development
- Reversing the Resource Curse
- Conclusion
- References
- Chapter 3: Resource Curse in OIC Countries: The Role of Institutions
- Introduction
- Institutions and Oil Rent Relations
- Financial Development and Oil Rent Relations
- Data
- Estimation Methods
- Basic Panel Estimation
- Pooled Mean Group (“PMG”) and Mean Group (“MG”) Methods
- The Results
- Empirical Results for Model 1—Resource Growth Equation
- Empirical Results for Model 2—Resource Growth Equation with Interaction Term
- Empirical Results for Model 3—Institutions and Oil Rent Relations
- Empirical Results for Model 4—Financial Development and Oil Rent Relations
- Robustness Analysis
- PMG Method
- Comparison with Top Oil-Producing Non-OIC Countries
- Conclusion
- References
- Chapter 4: Theories of Institutions
- Introduction
- Definition of Institutions in the Conventional Literature
- Institutional Change Propositions (North)
- Do Effective Institutions Support Economic Growth?
- Institutions According to Islam
- Islamic Institutional Economic Framework
- Do Institutions Support Sustained Economic Growth?
- Institutional Condition of Muslim Countries
- Conclusion
- References
- Chapter 5: Addressing the Resource Curse through an Ideal Islamic Institutional Framework
- Introduction
- Proposed Recommendations to Address the Curse and Strengthen Institutions
- Redirection of Education
- Duties and Accountability of State Authority and Citizens
- Enhanced Supervision
- Is Economic Reform Possible in the Absence of Political Reform?
- Conclusion
- References
- Chapter 6: Policy Assessment: Saudi Arabia, Malaysia and Qatar
- Introduction
- Saudi Arabia
- Malaysia
- Qatar
- Conclusion
- References
- Chapter 7: Summary, Conclusions and Looking Ahead
- Introduction
- Summary and Conclusions
- References
- Index
- Series index
Figure
6.1: Percentage Distribution of the Population by Ethnic Group, Malaysia.
Tables
2.1: Sachs and Warner Dutch Disease Sector Breakdown.
3.1: Data Description.
3.2: Panel Estimation Results of Model 1 (Dependent Variable GDP).
3.3: Panel Estimation Results of Model 2 (Dependent Variable GDP).
3.4: Marginal Effects of Oil Rent on GDP.
3.5: Estimation Results of Model 3 (Dependent Variable Institutions).
3.6: Estimation Results of Model 4 (Dependent Variable Financial Development). ← ix | x →
3.7: PMG Estimation Results for Models 1–4.
3.8: Panel Estimation Results of Model 1.
4.1: Economic Islamicity Index (Top 10 Countries).
4.2: Legal and Governance Islamicity Index (Top 10 Countries).
4.3: Human and Political Rights Islamicity Index (Top 10 Countries).
4.4: International Relations Islamicity Index (Top 10 Countries).
4.5: Overall Islamicity Index (Top 10 Countries).
4.6: Economic Islamicity Index (Countries Included in This Study).
4.7: Legal and Governance Islamicity Index (Countries Included in This Study).
4.8: Human and Political Islamicity Index (Countries Included in This Study).
4.9: International Relations Islamicity Index (Countries Included in This Study).
4.10: Overall Islamicity Index of the Countries (Countries Included in This Study).
4.11: Corruption Perceptions Index Ranking (Countries Included in This Study).
There have been numerous studies on the resource curse. This book is a first on this subject from a new perspective and focus of the resource curse in Muslim countries endowed with natural resources. The authors have done extensive economic analysis to trace the developments in the commodities-rich Muslim countries and provide the evidence-based explanations for their rather inferior economic performance. In many Muslim countries, the unfortunate loss of opportunities to gain economically has indeed been due to presence of oil, the major resource curse. The more innovative aspect of the analysis of the resource curse in these Muslim majority countries is the attribution of poor governance and institutional failure as key factors causing the severe lag in economic performance.
The other innovation in the book is the study of the resource curse from an Islamic lens. Would application of the fundamental Islamic principles of justice and equal distribution of resource benefits been able to reverse the resource curse? This book provides an illuminating understanding of the Qur’an that the gatekeepers of countries endowed with resources are duty bound to exercise the highest standards of morality and good governance to ensure fair distribution of the benefits from the resources gift from God to the population. This analysis of the impact of poor governance on managing ← xi | xii → resources is timely at this time when there is a global momentum to put in place good governance across the whole spectrum of political, social, financial and economic management. This book makes invaluable contributions on the merits of applying Islamic principles on development and distribution of wealth emanating from resources.
The authors provide policy recommendations that are aligned within an Islamic framework and discuss at length how these Muslim countries can achieve the ideal structure envisioned by the Qur’an. They trace the fundamental differences between Institutions from the conventional and the Islamic perspectives and present why an Islamic institutional framework offers the most complete solution for the countries managing rich resources.
This added Islamic perspective on managing resources makes recommendations on resolving the resource curse as one of the most comprehensive in resource curse literature. These recommendations of adopting Islamic principles on economic management as envisioned in the Qur’an are also modern in terms of the emphasis on the importance of building strong institutions and leadership practising good governance as essential in deriving optimal rewards from the resource gift. Islamic principles of management ranging from rules of behavior relating to property rights, trust on contractual arrangements and conduct of economic dealings to economic policies undertaken with social justice and high standards of morality, are all aligned with the current global concerns of promoting social unity in the market place for more equitable distribution of wealth in the pursuit of social justice.
There is no evidence that prior research had looked at Islamic teachings to ameliorate the resource curse problem. This book is an important contribution and could serve as a reference in Islamic economics and studies to manage depletable resources.
The country specific studies on Malaysia, Saudi Arabia and Qatar allow readers to understand the extent of the resource curse issue in leading resource rich Muslim countries. They provide the stark reality that corrosion of quality of institutions in these countries and the misallocation of the vast wealth from natural resources have resulted in imbalanced and unsatisfactory economic conditions. The authors provide sound justification on the need to change the current institutional framework.
In the case of Malaysia in particular which made great strides in affirmative action policies for more equitable distribution of wealth, a more Islamic slant in using proceeds of resource development could have avoided the channeling of benefits to certain groups and the income disparity in the Muslim ← xii | xiii → population may not remain so stark today, more than 40 years after implementing the New Economic Policy. The Malaysian country study demonstrates the more acute impact of political actions undermining competitive behavior to favor select groups. Non-adherence to Islamic principles of distribution of the resource wealth show how the behavior of the political elite entrusted to take care of it citizens can actually deepen the resources curse. Policies which aim to maintain power while weakening institutions further deepen the social injustice in resource management. Results could have been different for Malaysia if leaders had sustained the institutions built by the forefathers and applied the globally accepted principles of fairness and social justice through good governance in managing the rich resources in the country. The analytical content and evidence based analysis make this book a valuable contribution to the understanding of the resource curse problem in Muslim countries. The suggestions in adopting specific principles of economic management aligned to fundamental Islamic principles of justice in distribution of resource benefits are worth serious consideration for resource rich Muslim countries to begin their path towards building strong institutions and practicing good governance.
Details
- Pages
- XX, 172
- Publication Year
- 2018
- ISBN (PDF)
- 9781433143526
- ISBN (ePUB)
- 9781433143533
- ISBN (MOBI)
- 9781433143540
- ISBN (Hardcover)
- 9781433143519
- DOI
- 10.3726/b11157
- Language
- English
- Publication date
- 2018 (March)
- Published
- New York, Bern, Berlin, Bruxelles, Vienna, Oxford, Wien, 2018. XX, 172 pp., 1 b/w ill., 20 tbl.
