Assessing Socio-Economic Development based on Maqāṣid al-Sharīʿah Principles: Normative Frameworks, Methods and Implementation in Indonesia

Abstract

Despite calls to expand and implement the concept of Maqāṣid al-Sharīʿah, it has been rarely utilized in economics and development studies. This paper fills this gap and proposes a framework to assess socio-economic development of Muslim societies based on the maqāṣid principles. It is argued that human wellbeing/poverty is a central theme in the historical deliberations of maqāṣid and should be the same when using it to frame policies to resolve development challenges in current Muslim world. Drawing insights from the discourses on happiness, quality of life and multidimensional poverty based on the capability approach pioneered by Amartya Sen, the paper reviews a number of operational indicators and multidimensional poverty indices. It then proposes a simple, linear and decomposable multidimensional Maqāṣid al-Sharīʿah based poverty index encompassing five dimensions of wellbeing/poverty consistent with the maqāṣid perspective. The index is subsequently applied to evaluate the welfare changes amongst the recipients of zakāh in Indonesia by using data collected through a survey conducted covering 685 households living in Jakarta, Indonesia. While the study found that zakāh institutions have the expected positive contribution in reducing poverty amongst the poor, it also provides a workable example of how Maqāṣid al-Sharīʿah principles can be implemented in assessing impacts of socio-economic policies in Muslim societies.