Economics Push Islamic Political Reform
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"There is great disorder in the heavens, and the situation is excellent."
The preceding quotation is often attributed to Mao Zedong, and it succinctly describes the evolution of a stable political economy in the Islamic world, capturing some of the key opposing trends at play.
Much has been written about the instability of the political structures of the Islamic world, and a variety of possible causes has been proposed. These range from a tendency of many to blame the British, French and Americans for local hardships to an equally disturbing trend of those who insinuate that, somehow, Islam or local cultures are at the root of economic problems.
But it is much more exciting and satisfying to think about the solutions that are making their presence felt. In spite of the U.S State Department's delusional efforts to engage in cultural discourse or any other similar endeavors, real progress is being made.
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By Farooq Tirmizi
Senior, School of Foreign Service, Georgetown University
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Before I proceed any further with my argument, it is necessary to lay out the theoretical framework. The Nobel Prize-winning political economist Douglas North once wrote a book called "The Rise of the Western World" in which he posits the theory that the route that any country takes to economic development depends to a great extent on the political institutions that it sets up.
Among the important factors that North points out are what he calls "credible constraints" on the powers of the government, in addition to the traditional Weberian monopoly on force in order to secure property rights. These "credible constraints" can take any form, although the ones with which the modern world is most familiar are called democracy and an independent judiciary.
So how do these ideas apply to those areas of the Islamic world where democracy has still yet to take hold? A casual glance seems to indicate that political institutions in the Muslim world do not seem to be doing very well, even though some of the economies there seem to have high growth rates. If anything, North's theories should be a cause for pessimism, suggesting that those growth rates are unsustainable.
But the theory seems to work quite well in the reverse direction, as well - at least in the Persian Gulf and South Asia. Economic necessities seem to be pushing many Islamic governments to constrain their own powers, at least with regard to commercial activity.
Saudi Arabia, for instance, has an elaborate bureaucratic structure that seems designed to keep the royal family from interfering in the economy by ensuring that civil servants retain control of the judiciary and economic regulatory agencies. Demonstrating North's theory in a different way, the Pakistani government is working to achieve the same goals by actively reducing the size of its bureaucracy - limiting the amount of red tape required to maintain a business in that country, thereby removing opportunities for corruption.
Other Muslim countries have undertaken similar programs, geared at actively seeking to change the political structure of the country in order to meet economic goals and attract investment.
Finally, what makes this whole process even more interesting is the introduction of Islamic finance, something that several financial institutions, including such conservative Western houses as Deutsche Bank and Morgan Stanley, are seeking to embrace.
The prohibition on Interest and Usury in Islam derives from a particular view of what economic and social justice means. An increased interest in Islamic finance should compel Muslim economists, jurists, theologians and philosophers to come up with economic and financial systems acceptable under the Quran.
What does this worldview translate into, in terms of economic ideas and public policy goals?
How does that relate to the political system again?
Simple: it defines, in a uniquely Islamic manner, the economic goals that governments must pursue and, by extension, around which they must design their political systems.
Despite the seeming disorder in that part of the world, that is, indeed, an excellent thing.
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Farooq Tirmizi is a senior in the School of Foreign Service. He can be reached at tirmizi@thehoya.com . Fresh Off The Boat appears every other Tuesday.
