A Treatise on Socioeconomic Roles of Zakah

Year 2019, Volume: 5 Issue: 1, 77 - 92, 31.03.2019

Shehu Usman Rano Aliyu

https://doi.org/10.25272/ijisef.460304

Abstract

Keywords

Zakah, socioeconomic, stabilization, redistribution, povetry

A Treatise on Socioeconomic Roles of Zakah

Abstract

A major preoccupation of policymakers is the
design and implementation of public policy for efficient resource mobilization,
allocation, stabilization of the economy and redistribution of wealth to
guarantee minimum standard of living for all. At the extremes, the Capitalist
and Socialist systems are characterized by the supremacy of self-interest in
the former and total state control in the latter. Exacerbated by the prevalence
of riba in the systems, unwanted economic outcomes; social and economic
inequality, poverty, unemployment, crimes, booms and recessions, thrive. The
Islamic economic system which blends the material pursuit with spiritual
upliftment tailors economic policies towards attainment of Maqasid al-Shari’ah.
As a pillar of Islam and an omnibus instrument of economic stabilization, Zakah
serves as an automatic catalyst with backward and forward implications on
resource mobilization, allocation, stabilization and redistribution of wealth.
Using a heuristic approach, the paper conducts an in-depth assessment of the
socioeconomic impact of Zakah in an Islamic economy. Evidences from review of
both classical and empirical literature unveil the positive impact of Zakah on
consumption, savings, investment leading to employment and higher productivity,
(Kahf 1980; Metwally 1983; Khan 1984; Ahmad, 1985;   Kuran 2006; Azmi, 2009 and Norulazidah, Ali
& Myles, 2010. Further, Zakah acts as an expansionary tool to those at
lower income level and a discretionary tool to those at higher income level to
redistribute income, remove poverty and facilitates provision of desired public
good for the benefit of the poor Faridi (1983). The paper posits that in view
of the overwhelming empirical evidences in the literature, Zakah is an
effective tool for tackling socioeconomic problems of our modern times.

Keywords

Zakah, socioeconomic, stabilization, redistribution, poverty

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