Law and Justice in Ibn Khaldun’s Perspectives on Development: An Application to Islamic Finance
Last modified: 28-04-2019
Abstract (400-500 words)
This paper examines the notions of law, justice and development discussed in contemporary literature and in light of Ibn Khaldun’s circle of justice and development in which he argues that the nature of laws enacted by the state would govern the status of justice and in turn determine development. Ibn Khaldun’s thoughts on the relationship between the state, laws, justice and development are first presented and then some key propositions based on his ideas are developed and discussed with similar concepts in contemporary literature and Islamic perspectives. Ibn Khaldun distinguishes between religious law and rational law in asserting that while the former would be just, the latter could have features that serve the interests of a certain group over the other. This paper argues that the coexistence of increasing wealth and inequalities of income during contemporary times is partly due to the interest-based financial system which is unjust from an Islamic perspective. Using the propositions derived from Ibn Khaldun’s circle of justice and development the paper examines the current practice of Islamic finance and shows the divergence of Islamic religious law and positive law applied in the industry. Instituting a just Islamic financial system would require setting up an independent institution of ifta that interprets religious laws in accordance with the principles of justice inherent in Shariah which are then implemented by the state or a regulatory authority.