Introduction

Linking effort and reward

A well-regulated economic system requires incentives that reward productive and withhold rewards from unproductive activity. Such incentives are put in place by means of legislation and enforced with the help of regulatory agencies. A well-managed system will allocate resources more efficiently than a system in which income may be gained without active participation in economic activity, by lending at interest in particular, which invariably increases the prices of finished goods without, however, adding any value. Despite many adverse macroeconomic effects of debt financing, lending at interest occupies a prominent place in conventional banking and finance and, to a lesser extent, in Islamic finance, in a replicated form. This should be of concern. What should be of even greater concern, in particular to policymakers in Muslim nations, is that to the extent that Islamic finance replicates mainstream finance, it also replicates the latter’s harmful effects.

To download the file in PDF, click the link below:

Issues in Islamic and Conventional Finance – Introduction

Author: Abdul Karim Abdullah

Writer and editor

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s