Methods of Bayt al Māl (Treasury)
Distribution in the Early Days of Islam

Hamed Montazeri Moghaddam1

Fundamentally in the view of Islam, the method of distribution has an intimate relationship with justice and therefore has important economic and social implications. This paper reviews the methods of bait-ul-Maal treasury distribution during the advent of Islam. Using historical analysis, three methods of distribution have been determined including (1) immediate, equal distribution of public wealth by the Holy Prophet (S), the first caliph, and Imam Ali (‘A); (2) biased annual distribution by the second caliph; and (3) amassment of public treasury and arbitrary expenditure by the majority of later rulers of the Muslim people. According to historical evidence, divergence from the method of equal distribution of public treasury resulted in formation of class gaps in the society. Accordingly, though Islamic rulers digressed from the manner of the holy Prophet (S) in dispensation of public wealth, his way has perpetually been considered the ideal method.

Key Words: Bayt al Māl (Treasury), Economic History of Islam, the Holy Prophet, Imam Ali, the three caliphs, Equal Distribution, Biased Distribution.



Criteria for Price Determination in accordance
with Shia Jurisprudence

Seyyed Abbas Musavian* / Hasan Bahari Gharamaleki**

An important issue in economics is the method of price determination in the market, which has multifarious impacts on investment, employment, production, aggregate supply, and the general level of prices. Although considering short-term effects, government pricing has been preferred by some, most Islamic thinkers, especially jurisprudents, consider such pricing forbidden in line with canonical evidence as well as due to the effects of prescriptive price assignment. using canonical evidence, this paper aims at proving the following premises..

(1) In normal circumstances, no party has the right to assign prices as prices must be determined by the market.

(2) In conditions where goods are hoarded or there is a monopoly or collusion, offenders must be required to supply their goods.

(3) If offenders refuse to price their goods fairly, they must be forced to decrease their prices.

(4) If they still refrain from fair pricing, a price must be determined form them.

(5) In cases of obligatory price determination, experts shall determine a fair price such that neither the seller nor buyers are dealt with unjustly.

The method of research is rational in accordance with common methods of ijtihad. Accordingly, the canonical prerequisites and evidence, including principles, annexes, and special Narrations, have been reviewed first. Then, the various juristic opinions are discussed and critiqued. Finally, the research hypotheses have been substantiated.

Key Words: Price Evaluation, Price Determination, Hoarding, Collusion, Fair Price.



Culturo-Economic abnormality of Iran’s Tax Revenues and Solutions based on Islamic Teachings

Hasan Aghanazari*

Doubtless normality of taxation in every society is dependent on formation of suitable, especially cultural, infrastructure. Present article analytically deals with the aberrance of Iran’s tax culture using field research on medical doctors in northern areas of the city of Tehran. According to this study, tax culture aberration is one of the reasons behind taxation non-compliance in the Iranian society. This problem stems from Iran’s past and now has deep roots in all societal strata. This Paper holds the hypothesis that the solution to this problem is not merely increasing public awareness regarding the role of taxation in the society. Enactment of tax laws as legal sanctions are not sufficiently effective either since such laws do not derive Financial rights from religious teachings. However, presentation of a jurisprudential basis for taxation can facilitate the development of tax culture. To achieve this aim, the belief must be produced in the people that tax is the ‘Financial right’ of the Islamic government. Considering the general policies presiding over fixed Islamic taxes, expansion of the tax base and establishment of a suitable rate may be an appropriate mechanism for acquiring the economic infrastructure for the tax system.

Key Words: Tax Culture, tax Compliance, Cultural, Abnormalty Financial Right, Taxation, Tax rate, Tax base.



Principals of Consumption in
the Islamic Society and Methods of Reform in its Pattern

Mohammad Jamal Khalilian Ashkezari*


According to Islamic belief, practical principles of consumption in the society are rooted in theoretical principles of consumption. These theoretical principles determine the general approach of Islam regarding consumption. This orientation results in formation of behavioral standards as practical principles governing consumption in the Islamic society. Utilizing an analytical method, the present paper aims at studying the theoretical and practical principles of consumption in the Islamic society, collating these principles to consumption in Iran, and presenting operational procedures to achieve these practical principles in the Islamic society. The main hypothesis of the paper is that in order to realize these practical principles of consumption in Iran, a series of cultural and economic strategies must be executed. After presenting the theoretical and practical principles of consumption, the following four important strategies have been offered as methods to correct consumption paradigms in the society: heightening public awareness and correcting media orientations; introduction of superior paradigms; correction of the price system; and implementation of appropriate standards and programs.

Key Words: Consumption, Theoretical and Practical Principles of Consumption of Reform in Consumption pattern.



Social Capital or Religious Capital,
One which is more Useful for the Economy?

Nader Mehregan* / Hassan Daliri**

Frome the emergence of human social life, there appeared interaction and participation Umong human beings which lasted for ages. In the 60’s scientists realized this as a power and they called it “social capital”. later on, many studies were Carried out on the concept social capital they showed that social capital, despite having positive effects, could bring about oppositions and contradictions in the soviety. With the accumulation of social capital may occur problems such as “Adverse Selection”, “Moral Hazard”, and “Free Riding” and "Group fish". So social capital is not always profitable. This paper seeks to introduce the concept “Religious Capital” based on Islamic doctrines showing that religious capital has the merits of social capital but it does not have its defects. So religious capital has much more positive effects than social capital in achieving the developmental objectives.

Key Words: Religious Capital, Social Capital, Free Riding, Adverse Selection, Moral Hazard.



The Effects of Islamic
Banks on Financial Stability in the process of Globaliztian

Reza Akbarian* / Mino Kheradso**

With the advent of the Islamic banking and its increasing development it in the world, which was associated with a climate of change brought about by the so-called globalization, the necessity for focusing the atlention to the Islamic banking system and role in this process is emphasized. Since in globalization issues, financial stability deserres consideration, this article has dealt with, the effects of globalization process and Islamic banking financial stability by means of z-score and globalization index The results show that Islamic banks in globalization process have effects on financial stability through siutable management in critical situations, market power, work by real section and shared system the effect of globalization on increasing financial stability of Islamic banks are :increasing efficiency ,using global ranking institution, and increasing investment diversity.

Key words: Globalization, Islamic Banking, Financial Stability, Globalization Index.


Analysis of Equilibrium and Sustainability in
an Interest-Free Macroeconomic Model in Contrast
with Sargent’s Classical Model

Noorollah Salehi Asfiji* / Rahim Dallali Esfahani** / Mohammad Vaez Barzani*** / Seyyed Reza Miraskari****

Investment, a critical issue in macroeconomics, depends upon rate of interest. Closely related to investment in macroeconomics are equilibrium and sustainability. This paper aims at using an analytical method to identify an interest-free macroeconomic model as opposed to capitalist macroeconomic models. The main premise of present Paper is that this model is sustainable in the same manner as models dependent upon interest rate. Furthermore, proposed model is even more sustainable than the macro-model of Sargent. In order to achieve viable models in an interest-free system, changes were made to a chosen model. Proposed model entails alterations in labor demand, production, consumption, and investment functions as well as equilibrium in the labor market. Since during rising inflation in an interest-free system, the true rate of return for monetary assets is preserved, the motivation for savings is not weakened. Thus, for developing countries faced with inflation and its resulting stagnation, it is preferable to substitute monetary systems based on interest with interest-free systems.

Keywords: Rate of Interest, Usury, Sustainability, Equilibrium, Islamic Profit



1. Assistant, professor,IKI.

* Associate Professor, Institute of Islamic Culture & Thought.

** Researcher on Islamic Economics.

* Associate professor, Hawzah & University Research Institute.

* Assistant Professor, IKI.

* Associate Professor, Ebn Sina University.

** PhD Student of Economics, Ebn Sina University.

* Assistant Professor , Shiraz University.

** M.A. Student of Economics , Shiraz University.

* Ph.D Student of Economics, Isfahan University.

** Associate Professor, Isfahan University.

*** Assistant Professor, Isfahan University

**** Ph.D Student of Economics, Isfahan University



Table of Contents

Analysis of Equilibrium and Sustainability in an Interest-Free Macroeconomic Model in Contrast with Sargent’s Classical Model / Noorollah Salehi Asfiji / Rahim Dallali Esfahani / Mohammad Vaez Barzani / Seyyed Reza Miraskari

The Effects of Islamic Banks on Financial Stability in the process of Globaliztian / Reza Akbarian / Mino Kheradso

Social Capital or Religious Capital, One Which is More Useful for the Economy? Nader Mehregan / Hassan Daliri

Principals of Consumption in the Islamic Society and Methods of Reform in its Pattern / Mohammad Jamal Khalilian Ashkezari

Culturo-Economic Abnormality of Iran’s Tax Revenues and Solutions Based on Islamic Teachings / Hasan Aghanazari

Criteria for Price Determination in Accordance with Shia Jurisprudence / Seyyed Abbas Musavian / Hasan Bahari Gharamaleki

Methods of Bayt al-māl (Treasury) Distribution During the Advent of Islam / Hamed Montazeri Moghaddam



In the Name of Allah

Economic Knowledge Vol.1, No.2
An Academi Semianual Journal on Islamic Economics Spring & Summer 2010


Proprietor: Imam Khomeini Educational and Research Institute

Editior in Chief: Mohammad Javad Tavakoli

Editor: Hasan Agha-Nazari

Executive manager: Ghasem Askari

Translation of Abstracts: Syyed Rahim Rastitabar


Editorial Board:

 Hamid Abrishami: Professor, Tehran University

 Parviz Davodi: Professor, Shahid Beheshti University

 Gholam Reza Mesbahi Moghadam: Assistant Professor Imam Sadeq University

 Farhad Rahbar: Associate Professor, Tehran University

 Masoud Derakhshan: Associate Professor Alameh TabaTabaii University

 Hasan Sobhani: Associate Professor, Tehran University

 Hasan Agha-Nazari: Associate Professor, Hawzeh and University Research Center

 Elyas Naderan: Associate Professor,Tehran University



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