O'Reilly logo

Introduction to Islamic Economics: Theory and Application by Abbas Mirakhor, Zamir Iqbal, Hossein Askari

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 3Institutional Framework and Key Institutions

  1. The nature of risk and its economic implications.
  2. How trust mitigates uncertainty and risk.
  3. Rules are the essence of institutions.
  4. What rules are important in all economic systems.
  5. Islam is a rules-based system.
  6. Rule compliance enhances trust and builds effective institutions.
  7. Effective institutions are the foundation of economic and social progress.
  8. The important institutions in Islam.
  9. The importance of work ethic in Islam.

All societies face two interrelated problems—uncertainty and coordination. The first stems from the fact that the future is unknown. Yet every human has to make decisions and take actions that affect his or her own future as well as the future of others. Making decisions is one of the most fundamental capabilities of humans, but it is bound up with uncertainty. Facing an unknown, and generally unknowable, future, humans make decisions and choose among alternative courses of action based on their expectations of future consequences of their actions. The problem becomes more complicated when uncertainty about the future is coupled with ignorance about how other individuals, or their collectivities, behave in response to unknown states of the world.

The problem of decision making under uncertainly is compounded by two additional factors: the competence of the decision maker and the difficulty of selecting the most preferable among alternative possibilities, especially if there is a ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required