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

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Chapter 12Economic Development and Growth

  1. The evolving conventional thinking on development from Adam Smith to Mahbub ul-Haque, Amartya Sen, and Douglass North.
  2. Islam's perspective on economic and social development.
  3. Why rules and institutions are the keys to development and growth.
  4. How cooperation, coordination, and trust are linked to development and growth.
  5. Dimensions of economic growth and development in Islam.

Evolution of Western Economic Thought: From Smith to North and Sen1

The concept of modern economic development in the Western economic literature owes its origin to the eighteenth-century writers of the Scottish Enlightenment, especially Adam Smith, who formulated the first systematic idea of economic development, beginning in his seminal work, The Theory of Moral Sentiments (1759).2 Smith believed that through effort and cooperation, motivated by self-love tempered by the moral value of “sympathy” for others, there would be continuous material improvement. Sympathy is the quality that each individual would take to the market as a mechanism that would translate the self-love, or self-interest, of each market participant into love for others. If individuals entering the market were devoid of sympathy and cooperation, progress would be undermined. The dimension of the self that is a reflective judge of a person's own actions and sense of duty would create an appropriate balance between the interests of the self and those of others. This guidance ...

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