Socio-economic Development

JKAU: Islamic Econ., Vol. 30 No. 1, pp: 3-19 (January 2017)
DOI: 10.4197 / Islec. 30-1.1
3
Institutional Values Needed for Transformative
Socio-economic Development in the Muslim World
Abstract. There is a growing amount of literature that tries to explain what
institutions are, how they are established and how they can be reformed for desired
social and economic development. This paper explores key institutional values
needed for transformative socio-economic development in the Muslim world. The
paper begins by examining the role of uplifting institutional values found in the
Golden Ages of the Muslim world and how they moved to the West. It then
presents new institutional economics as an effective tool to understand long-term
development. The paper adds a new layer to institutional economics literature by
addressing the importance of hidden internalized institutional values (liberty,
critical thinking, justice, rule of law, equality, participatory culture, accountability,
competency, punctuality, and plurality) in explaining the socio-economic success
of the West and failure of the Muslim world over the last few centuries. The paper
concludes with some developmental policy recommendations for Muslim countries
based on these internalized institutional values.
Keywords: Institutional economics, development, institution, Muslim world,
informal institutions, formal institutions.
KAUJIE Classification: G5, H4.
4 Necati Ayden
1. Introduction
New institutional economics (NIE) places great importance on social, cultural, and legal norms and rules in
understanding long-term economic development. It defines institutions as the rules of games while
organizations as players who partake in economic transactions based on those rules. Institutional economists
believe that it is impossible to explain how some countries have been successful while others have failed
without examining institutions. In North’s terms, the core issue of economic development is “to account for
evolution of political and economic institutions that create an economic environment that induces increasing
productivity” (North 1991, p. 98). That is because institutions set incentives for better economic performance.
This paper is an attempt to explain the relative success of the West
1 compared to the Muslim world. We will
use an NIE approach to understand the rise of the West over the East
2. First, we will provide a historical
overview of the Golden Age of Islam. Second, we will discuss how the sun set in the East and rose in the West.
Third, we will contrast the West for the West and the West for the Rest
3. Fourth, we will explore the roles of
ten internalized institutional values that facilitated Western success in the last few centuries. Fifth, we will
deliberate on the path dependence and challenges for a transformational change. Finally, we will derive
important lessons of the institutional approach to have a better understanding of the Golden Age of Islam, and
policy implications for the current development of Muslim societies.
2. Golden Age of the Muslim World
From the eighth to almost the thirteenth century, the Muslim world was experiencing its Golden Age
(George, 1998). The Muslim world thrived in science during its Golden Age while the Western world was in
the Dark Ages of ignorance, intolerance, superstition, and religious oppression. The Muslim world was the
center of science and inventions. The Islamic civilization, rooted upon the fabric of Qur’ānic principles and
prophetic practices (Sunnah), was spreading certain values such as justice, equality, rule of law, and critical
thinking which resulted in great scientific accomplishments. The spiritual, moral, and intellectual valuebased Islamic teaching reached three continents within the first century after the birth of Islam.
Increasingly, scholars in the West are now acknowledging the role of Muslims in science and technology
(Collins and Huff, 1994; Kaviani et al., 2012; West, 2008), while the National Geographic published a book
documenting 1001 inventions of Muslim scientists (al-Hassani, 2012). Those studies reveal that the Muslim world
in the early Middle Ages (the 8
th to the 13th century) were the center of learning, tolerance, science, peace, and
prosperity. For instance, during the Abbasid era, Baghdad became the capital of scientific knowledge. The
supportive tolerant cultural values attracted scholars of various religions around the world to the House of
Wisdom (Bayt Al-Hikma) in Baghdad, which had extensive book collections in Persian, Indian, Greek, and even
Chinese. The translation of Greek literature was particularly an ambitious historical project. The scholars gathered
the accumulated knowledge of the world and added their own discoveries. Great advancement was observed in
many fields, including mathematics, astronomy, medicine, chemistry, zoology and geography. For instance, AlKhawarizmi, in his book of “Kitab al-Jabr”, devised modern algebra while trying to solve inheritance problems
for Muslims based on the verses in the Qur’ān. Al-Hasan Ibn Al-Haytham truly revolutionized the study of light
and optics. Abu Raihan al-Biruni, a Persian scholar, calculated the earth’s circumference with only 1% error from
what is known today. Furthermore, Muslim scholars played significant roles in preserving and transferring the
intellectual heritage of ancient Greek, which became the seed of the Western Enlightenment later on (al-Khalili,
2012).
In recent decades, several books have been written documenting the contributions of Muslims to science
during the Golden Age. One of them was written by Jim Al-Khalili, an Iraqi-born non-Muslim physicist,
(1) There are various definitions of the West used by different disciplines. In this paper, we used a definition of the West as Europe
and European Offshoots including USA, Canada, Australia, and New Zealand. Indeed, this definition is used by the official
statistics bureau of Norway in categorizing countries for the purpose of immigration statistics.
(2) In this article, we refer to the Muslim world as “the East” for the sake of easy and memorable comparison.
(3) By “the Rest”, we mean any country other than those which are considered to be part of the West.

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 5
who has lived in England since 1979. Fascinated by the contributions of Muslims to modern science, alKhalili in his bestseller,
The House of Wisdom (2012), reveals these important Muslim contributions based
on historical evidence. He makes a compelling case by presenting tolerant, plural, and pro-science views of
rulers in the Muslim world during the Middle Ages when the West was in its Dark Ages. He states that
Arabic was the language of science for 700 years. People had to learn Arabic to study science. It was the
West that translated scientific books written by Muslims. For instance, Ibn-i Sina’s book on medicine (
Canon
of Medicine)
was translated and used in Western universities until the 17th century, for a period spanning
almost six hundred years.
Al-Khalili also discusses in detail the contributions of Abbasids to science. He reports that the Abbasid
caliph Al-Mamun made Baghdad the center of intellectual flowering in the early ninth century. Al-Mamun
established an institute called the House of Wisdom that offered great opportunities for scholarly flourishing.
Over the next two centuries, many great works of Greek philosophers, Persian and Indian thinkers were
translated into Arabic to support intellectual endeavors. Al-Khalili argues that if it were not for the
translation project of Al-Mamun, we might have lost the major Greek texts forever. As he repeats in the
book, while the Greek works were being destroyed in the West, the Arabs were translating and preserving
them for the future. This was happening not only in Baghdad as Muslims were repeating similar success
patterns in other places such as Damascus, Cairo, Isfahan, and Cordoba that were centers of scientific
learning at the height of the Muslim rule. For instance, there were many more books in libraries in Cordoba
during the 11
th century than there were in all the European libraries combined (Al-Khalili, 2012).
Al-Khalili states that many of the innovations that we think of as symbols of Western science were the
products of Muslims’ works.
“Astronomers laid the foundations for the heliocentric model of the solar
system long before Copernicus; physicians accurately described blood circulation and the inner workings of
the eye ages before Europeans solved those mysteries; physicists made discoveries that laid the foundation
for Newton’s theories of optics”
(Al-Khalili, 2012, outside back cover). The West even acquired certain
economic instruments from the East. As clearly stated by North (1991), Europe borrowed necessary
economic techniques and instruments, for example, the Italian city-states borrowed from the Muslim or
Byzantines commercial contracts such as the commenda, to lower transaction costs of economic exchange
over long distances.
3. The Sunrise from the West
The Golden Age of the Muslim world did not last forever. The biggest blow came from the Mongol invasion
in the mid-13th century. Later, the Ottoman Empire ruled for almost six centuries. The glory of the Ottomans
was mostly military, not scientific. Meanwhile, the sunlight began to emerge in the West, almost 600 years
ago. The dawn of Western civilization dates back to the 14
th century when Europe began having the
Renaissance. It gave birth to the Industrial revolution in the 18
th century. The West did not stop there but
progressed toward the Information Society in the second part of the 20
th Century while the East had barely
woken up from its multi-centurial hibernation.
Many scholars have tried to unearth the success of the West in the last few centuries. They provide
several competing arguments to explain long-term economic growth in Western Europe and Western
offshoot countries. For instance, some economists attribute the development to geography (Sachs, 2001),
while others put weight on political competition (North and Thomas, 1973; Rosenberg and Birdzell, 1986)
and international trade (Dollar, Kleineberg, and Kraay, 2016; Dollar and Kraay, 2003; Sachs and Warner,
1995). Ferguson (2012) postulates six factors determining the Western success over the Rest: scientific
revolution, modern medicine, work ethics, the rule of law, competition, and consumer society. He calls them
six killer apps behind the Western power.
It is important to mention Weber’s view of economic development. He gave great importance to values to
understand the emergence of capitalism in the West. Weber (2001), in his famous book,
The Protestant Ethic
6 Necati Ayden
Educa&onal ins&tu&ons and
organiza&ons
(Provide tools and training)
Legal ins&tu&ons and
organiza&ons
(Protect property rights)
Poli&cal ins&tu&ons and
organiza&ons
(Provide security and governance)
Economic ins&tu&ons and
organiza&ons
(Reward the works of the mind)
Treasure of the mind
and the Spirit of Capitalism, argues that the main reason that capitalism emerged in Western Europe is the
Protestant Ethics which considers working for this world as a sacred duty for believers. According to Weber,
it was certain ethical values which promoted hard work and rational pursuit of economic gains leading to
capitalist accumulation. In recent decades, economists began paying more attention to values as the driving
force behind long-term economic development. Those who approach from NIE make a strong case for
institutions as the key determinant of long-term economic development (Hall and Jones, 1999).
We agree with the NIE approach in understanding the success of the West over the East. As shown in the
chart below, we think the main secret of the Western success since the Enlightenment is the discovery of the
mind. While the Dark Ages was the enemy of the mind and thinking, the Enlightenment thinkers considered
the mind as the greatest treasure ever. Since then, the West has established educational, legal, political, and
economic institutions to unearth the treasures of the mind. Thus, we could reduce Ferguson’s six killer apps
to a single one: mining the minds. In other words, the West has gained its essential economic and
technological power from mining the treasure of the mind through proper institutions. Indeed, science is built
upon the understanding that the human mind is the most valuable treasure. While scientific works unearth the
gold and diamonds of the mind, such as cars, computers, airplanes, etc., the competitive market system
provides an effective reward mechanism for the products of minds. The legal system assures the freedom to
mine the minds. Modern medicine helps to maintain a healthy body for a healthy mind. A work ethic makes
people do their best while mining and exchanging the products of minds. As a result, the gap between the
West and the East has widened for several centuries. It is still growing because the East is not investing in
minds as the West does. Indeed, according to recent data, the 57 countries in the Organization of the Islamic
Conference spend only 0.81% of GDP on research and development; about a third of the world average. On
the other hand, the United States, which has the world’s biggest science budget, spends 2.9%, while Israel
lavishes 4.4% (The Economist, 2013).
Figure (1). Institutions and organizations to unearth the treasure of the mind
4. Two Different Wests: The West for the
West and the West for the Rest
We think it is important to provide clarification on
what we mean by the West. Indeed, we consider
two different Wests. The first West is the one
which implements certain informal and formal
institutional values for internal peace and
prosperity. This is what we call the West for the
West. The second West does not necessarily follow
those values when they deal with the rest of the

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 7
world. This is what we call the west for the rest.
By the two Wests, we do not mean that the West is
hypocritical when it comes to foreign affairs.
Actually, we think that what the West does
domestically and internationally is perfectly in-line
with its underlying secular worldview. We argue
that the first West has established certain humane
institutional values such as liberty, justice, etc., not
because they truly believed in them as ends.
Rather, they considered those values as means to
the end. The supreme value, the ultimate end, is
utility (benefit and pleasure). The West, through a
painful historical experience, has learned that
implementing certain values would be in their best
interest even if they did not really believe in them.
Particularly, the first West learned its lessons of
institutional values from very bloody civil wars it
went through. For instance, during the English
Civil War (1642–1651), the number of deaths is
estimated to be around 876,000. Likewise, during
the American Civil War, 750,000 people were
killed. As a result, people came to the firm
understanding that they shall establish a society on
certain informal and formal institutions to allow
everyone to follow their dreams without fighting
with each other.
Some Muslim scholars also suggest avoiding
thinking about one version of the West. For
instance, Nursi (1996) considers European
civilization as having two different subcivilizations. The first Europe is guided by sacred
values coming from Christianity while the second
Europe is guided by secular values coming from
atheist and materialist philosophy. He argues the
second Europe:
“accepts ‘force’ as its point of support in the life
of society. It considers its aim to be ‘benefits’.
The principle of its life it recognizes to be
‘conflict’. It holds the bond between communities
to be ‘racialism and negative nationalism’. Its
fruits are ‘gratifying the appetites of the soul and
increasing human needs’. However, the mark of
force is ‘aggression’. The mark of benefit – since
they are insufficient for every desire – is ‘jostling
and tussling’. While the mark of conflict is
‘strife’. And the mark of racialism – since it is
nourished by devouring others – is ‘aggression’. It
is for these reasons that it has negated the
happiness of mankind” (Nursi, 1996, The Words,
12th Word, p.146).
We agree with Nursi in terms of the supreme
values of secular Western civilization. The
exploitation and oppression of the Rest by the
Western colonialism provides strong historical
evidence that the West believes in power and
benefits, rather than justice, fairness, and equality.
Likewise, in the modern time, the veto right of five
permanent members of the UN Security Council
clearly reveals that the West follows certain values
because of pragmatic reasons, not virtuous ones.
Even though their domestic institutions are based
on great values, they have not truly internalized
those values. They shall not be blamed for that
because perhaps it is not possible to internalize
those values without belief in God and the
hereafter. However, they believe that for their
interest, it is important to follow those values at the
national level. Since those values are like physical
laws for socio-economic development, they are
internally very successful compared to those
countries which do not follow those values. In
other words, the Western people have established
certain uplifting institutional values because they
are convinced those values are in their best interest
in the long-run. Through their historical
experience, educational, and cultural upbringing,
they have realized that those values are the
necessary foundations for successful formal and
informal institutions and organizations that provide
higher economic returns from economic
transactions.
As well documented by institutional economics,
the first West has established uplifting institutions
to do much better than the Rest for the last three
centuries. Since the Enlightenment, the first West
has realized that the real treasure is buried in the
minds, not mountains. It has developed necessary
educational, legal, political, and economic
institutions and organizations to unearth this
treasure. Educational entities provide training and
tools to explore the treasure of the mind. Political
and legal entities assure safety and freedom in
working to unearth the treasure. Economic
institutions promise competitive rewards for the
hard works of treasure hunters.

8 Necati Ayden
The Muslim world first ignored what was
happening in the first West. Then, it began
wondering and envying the West. Then, it had
attempted to duplicate the Western success.
However, it has largely failed. We think the failure is
due to the lack of understanding the embedded
institutional values behind the Western success. We
argue that what makes the West better than the
Muslim world in socio-economic development is
nothing but ten internalized institutional values.
Those values are necessary to get efficient institutions
dedicated to unearthing the treasure of the mind.
It is important to note that even the first West has
failed to bring promised subjective wellbeing despite
its success in science, technology, and economic
development. This is known as “progress paradox” in
the welfare literature. Thus, we are not claiming that
the first West is a perfect model for the Muslim
world. However, we are saying that we need to
implement tested informal and formal values to bring
socio-economic development along spiritual and
moral values. In the following section, we will
present those internalized institutional values that
resulted in efficient economics, political, social, and
legal institutions, and organizations in the West at
present, and in the East in the past (from the 8
th to
11
th centuries).
5. Ten Internalized Institutional Values
behind the Western Success
As well established by Adam Smith, conventional
economics considers self-interest as the driving
force (invisible hand) behind people’s choices. In
other words, from a conventional economic
perspective, we all care about ourselves first and
foremost. That is just our nature. As rational beings,
we compare the costs and benefits of alternative
options and decide on the one that gives us the
highest benefit (or utility). Even though modern
economics acknowledges the shortcoming of
rational calculus, it still relies mostly on rational
choice theory when analyzing human preferences.
We argue that the Western people have internalized
certain uplifting institutional values because they are
convinced those values are in their best interest in
the long run. Therefore, they are largely committed
to those values in making their choices, even when
it has short-term high opportunity costs for them.
Through their historical experience, education, and
cultural upbringing, they have realized that those
values are the necessary foundations for successful
formal and informal institutions and organizations,
which will provide higher economic returns from
economic transactions. In this section, we will
discuss the following ten internalized institutional
values as the tenets of Western institutions: liberty,
critical thinking, justice, rule of law, equality,
participatory culture, accountability, competency,
punctuality, and plurality.
First Value: Liberty
Perhaps, the most important value among the ten
institutional values is liberty of all kinds, including
liberty of thought, liberty of speech, liberty of
religion, economic liberty, political liberty, etc.
The mind can work best once it is free from any
kind of actual or potential coercion. The Western
Enlightenment movement was first a war for
liberty. The war was waged against the religious
establishments who were the enemies of liberty.
Once the West won the war against religion, they
soon realized that the liberty should be both from
religion and for religion. Thus, they engraved
liberty, including religious freedom, into their
formal and informal institutions. For Western
individuals, liberty has become more important
than almost anything. For instance, while in almost
all developing countries, flag-burning is considered
a form of treason, in the US, the Supreme Court
has ruled that flag-burning is a form of expression
that is protected by the First Amendment
provisions for free speech. Of course, there is a
limit to liberty in every country and culture.
However, generally speaking, the West has
championed the liberty of all kinds since the
Enlightenment. Thus, we can see both good and
bad fruit of freedom in the West. For instance,
from an Islamic perspective, it might be fair to say
that in the modern time the shortest path to the
Paradise and the Hellfire both pass through
democratic Western countries such as the USA.
The West and Western offshoot countries have
paid a high price for liberty, and therefore, truly
have internalized liberty as a necessary value for
individual, social, economic, and national development. For instance, it is estimated that one in three
southern households in the US has lost at least one

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 9
family member. As a result, the Western society has
a better appreciation of liberty than the Eastern one
does. It is not negotiable. It does not matter who
comes to power; no one can touch the core liberty.
Therefore, voter turnout in general elections is
relatively low. For instance, in the last U.S. presidential election, only 55% of people cast their votes.
We argue that through painful historical
experience and rich intellectual discourse on all
varieties of liberty, Western society has recognized
liberty as the most important value. Of course, liberty
has to be supplemented by proper institutions and
organizations in order to breed success. Indeed, the
success of the US lies in the formal and informal
institutions established before and after the American
Revolution (Hughes, 1989). Particularly, when we
compare the historical progress of Latin American
countries under the Spanish and Portuguese rule, the
role of institutions becomes quite evident.
Centralized bureaucracy and strict religious
intolerance were not friendly for developing required
institutions, which led to inefficient economic
transactions in Latin American colonies.
Economic literature is full of theoretical and
empirical studies exploring the relationship between
liberty, economic growth, and economic
development. Indeed, free market economy is based
upon the concept of free enterprise and freedom of
consumer choices. Therefore, the market economy
is also known as laissez-faire economy which puts
emphasis on freedom of choice as an efficient form
of allocating resources. Particularly, using various
social, political, and economic freedom indices,
economists frequently examine the importance of
liberty. Indeed, Nobel Laurate Amartya Sen (1999)
considers development as freedom. He makes a
compelling argument that millions of people living
in the Third World are denied basic freedom
because of economic poverty, social deficiency, and
political oppression. He argues that the ultimate
purpose of development is to provide freedom for
flourishing in life.
Second Value: Critical thinking
Critical thinking is possible only if liberty of
thought and speech is truly internalized and
protected. This is absolutely essential for economic
development because if the mind is a treasure as
argued before, the best way to unearth this treasure
is through critical thinking. Particularly, if we
acknowledge the limitations of the human mind, it is
essential to engage in critical thinking to make sure
we separate truth from falsehood. Since the
Enlightenment, the West has realized the
importance of critical thinking. Indeed, Immanuel
Kant (1996) defines the very concept of
enlightenment as “to dare to think”. We think
internalizing critical thinking is different from
promoting it without truly believing in it. We argue
that in the East, even when organizations promote
critical thinking, individuals do not truly believe in
the merit of critical thinking. The desired values are
obedience and blind imitation rather than critical
thinking.
We argue that critical thinking has played a
crucial role in the development of science and
technology in the West. Indeed, Wuthnow (1979)
states that Western Europe did accomplish a
scientific revolution mainly due to scientific
autonomy dating back to the sixteenth century. In
his terms,
“The importance of autonomy to engage in
critical reflection, to advance and test its own
paradigms, to allocate rewards on the basis of
professionally evaluated performance, and to
develop and maintain open internal
communication has been emphasized as one of
the conditions essential to the sustained
development of modern science” (Wuthnow,
1979, p. 217).
Critical thinking also plays a significant role in
economic transaction costs. NIE scholars turn to
cognitive science to redefine our understanding of
economic transactions. The NIE approach differs
from neoclassical economics when it comes to
rationality. It does not accept humans as perfect
rational agents with the ability to come up with
good calculations. Rather, as decisively argued by
leading institutional economists such as Douglas
North (1991) and Herbert Simon (1986), the
instrumental rationality of neoclassical economics
does not leave any room for institutions. In Simon’s
terms,
If we accept values as given and constant, if we
postulate an objective description of the world
as it really is, and if we assume that the decision

10 Necati Ayden
maker’s computational powers are unlimited
then two important consequences follow. First
we do not need to distinguish between the real
world and the decision maker’s perception of it:
he or she perceives the world as it really is.
Second we can predict the choices that will be
made by a rational decision maker entirely from
our knowledge of the real world and without a
knowledge of the decision maker’s perceptions
or modes of calculation (we do, of course, have
to know his or her utility function) (Simon,
1986, p. 210).
Indeed, if we have the capacity and willingness to
make right choices, then, the instrumental rationality
will be sufficient to solve our problems. We do not
need to pay attention to institutions or underlying
values. The fact is that we are limited both in
capacity and judgment to process the input data
(Hayek, 1945). Therefore, it is essential to move
beyond instrumental rationality. Indeed,
conventional economics has moved from perfectly
rational agents to bounded rationality and even
predictably irrational agents. Thus, it acknowledges
the limit of the human mind and recognizes the
importance of cognitive studies in analyzing human
choices and preferences.
North argues that it is essential to know how
minds perceive phenomenal reality based on
different mental models. In his terms, we perceive
the “immense variation in mental models and as a
result different perceptions of the world and the way
it “works”. … individuals make choices on the basis
of their mental models” (North, 1993, p. 2). The
mental models help players develop their
perceptions of payoff and make their choices. We
think it is essential to first build intellectual capacity
to understand the payoff of certain values leading to
efficient institutions and organizations. The West
did develop such mental models, mostly through
intellectual discourse and critical thinking. The
Enlightenment movement in the West did help
greatly in terms of nurturing thinking in general and
critical thinking in particular.
Critical thinking also mediates between education
and economic growth. Economics puts great
importance on education. There have been many
studies on the impact of education on economic
development since the creation of endogenous
growth theories in the 1980s. For instance, Romer
(1986; 1987; 1989), Lucas (1988), and Robelo (1991)
provide empirical evidence showing education as the
main driving force for economic growth. Therefore,
many policy makers in developing countries consider
investment in education as a game changer,
particularly in the long run. Even though investment
in education might be necessary, it appears to be
insufficient for an economic revolution, as seen in
many third world countries and the Eastern European
economies. That might be due to the lack of critical
thinking in education. The mission of education shall
not be filling the empty mind of students with great
ideas of the educators. Rather, it shall be opening the
mind of students through critical thinking. Then, it
would be possible to unearth the great treasures of the
mind.
Third Value: Justice
Justice is an important value to get the mind working
at an optimum level. The West has realized the
importance of social and economic justice for peace
and prosperity. Western individuals have developed a
better sense of justice largely due to extensive
intellectual discourse on what is justice, why we need
justice, and how we can achieve justice.
Indeed, the father of modern economics, Adam
Smith, in his famous book
Wealth of Nations,
explicitly refers to justice as a necessary value for
efficient market transactions:
Commerce and manufactures can seldom
flourish long in any state which does not enjoy
a regular administration of justice, in which the
people do not feel themselves secure in the
possession of their property, in which the faith
of contracts is not supported by law, and in
which the authority of the state is not supposed
to be regularly employed in enforcing the
payment of debts from all those who are able
to pay. Commerce and manufactures, in short,
can seldom flourish in any state in which there
is not a certain degree of confidence in the
justice of government. (Smith, 2005, Book V,
Chapter 3).
While the East relies on story telling on how to be
just, the West has engaged in much deep

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 11
philosophical discourse on why justice is needed
(Boot, 2012; Rawls, 1957, 1999). For instance,
John Rawls’ theory of justice provides compelling
intellectual arguments on the need for justice and
reasons for redistribution in favor of the least
advantaged in a society. Amartya Sen is a
pioneering economist incorporating the theory of
justice into economics (Brown, 2010). He
establishes a strong link between social justice and
his capability approach (Nussbaum, 2003).
Fourth Value: Rule of law
Belief in the rule of law is necessary to allow the
mind to do its best. It is an assurance to individuals
that they shall work hard and their property rights
are under the protection of the laws. The rule of
laws requires that the power shall reside in the
laws, not in the people. No one shall be above the
laws. This shall be internalized by everyone in a
society, not just be on paper. The West has
accomplished this value to a great extent while in
the East, the people of power are the de facto laws;
thus, formal laws work mostly for the weak, not
for everyone, mainly because people do not believe
in the power of laws. Again, it is not about having
good legislation on paper, it is about having a
mental mode or belief of realizing that the power
shall reside in the laws.
NIE pays great attention to the legal
environment in exploring the impact of the rules of
the game on economic development. NIE truly
appreciates the overlap between economics and
law. Scholars have been particularly interested in
contract law (Macneil, 1980), property law
(Anderson, McChesney, and Dhami, 2004), and
more recently, intellectual property law (Besen and
Raskind, 1991). Judiciary is important in terms of
enforcing property rights, thus, reducing
transaction costs to create higher gains from trade.
There are many studies regarding the
importance of property rights. As stated by Coase
(1959, p. 12), “A private-enterprise system cannot
function properly unless property rights are created
in resources, and, when this is done, someone
wishing to use a resource has to pay the owner to
obtain it”. Once property rights are well defined,
they have to be efficiently governed through
contractual relations and the judiciary system.
Securing property rights is absolutely essential
for efficient market transactions. Particularly, to
move from autarky toward free market transactions
at the local, regional, national, and international
levels, it is important to secure property rights. In
modern economies, the transaction sector becomes
a large component of the gross national product. In
response to various transaction needs, we observe
highly specialized transaction organizations. The
key question of economic development is how
those organizations could evolve to become more
productive in handling limited resources. Why do
they work differently in different countries?
Particularly, why do educational, political,
economic, legal, and social organizations in the
West work more efficiently than those in the East?
NIE scholars explore the relationship between
property rights and transactions costs to find an
answer to the questions above. For instance, North
(1991) puts the evolvement of transactions in three
forms. First, in the tribal society, transaction costs
were lowered through trust and the tribal network.
Second, the
sūq (the market) was developed to
allow bigger and relatively impersonal
transactions. Sellers and buyers from long
distances met at the
sūq (the market) at a certain
time of the year to find the best deals through
bargaining. The third form of exchange, caravan
trade, expanded the trade opportunity to a much
further distance.
While in the tribal society, informal institutions
such as trust and social reputation/network were key
to assuring secure transactions (Greif, 1989;
Milgrom et al., 1990), in long-distance trade for
better gains, in the modern society, it was necessary
to secure transactions through formal institutions
such as the constitution and laws. Particularly, it
was important to establish a constitution that set
limits on the power of a ruler to prevent arbitrary
seizure of assets. For instance, in England, the
Glorious Revolution (1688) and in the United
States, the Bill of Rights (1791) set a strong limit on
the power of government in favor of protecting
individuals and their rights, including property
rights. North and Weingast (1989) explore the
constitutional limits set in seventeenth-century
England following the Glorious Revolution. They
conclude that the resulting institutional changes

12 Necati Ayden
were a key determinant of economic development
through securing property rights, protecting private
wealth, and eliminating confiscatory government
practices.
Fifth Value: Equality
Equality is the quality of having the same rights,
status, opportunities without being discriminated.
A belief in equality means to recognize that any
mind can create great values, regardless of gender,
race, or religion. It means to believe that any mind
might contain a great treasure. The West came to
this realization after painful and costly historical
experiences. As a result, they have established a
relatively fair system, which provides a relatively
fair opportunity to every mind to flourish. In the
US, they have witnessed the great merit of a nondiscriminatory value, which allows every mind to
make a contribution to social and economic
outcomes. Electing a Black person as president and
selecting Indians as CEOs of Google and
Microsoft are evidence of this value. The East at
this moment remains far from understanding that
equality, not privilege, is the best for everyone in
the long run.
Acemoglu and Robinson (2012) provide strong
historical evidence for the importance of fair
opportunity. They identify two types of institutions
that account for success or failure of nations. In
their book,
Why Nations Fail, they argue that it is
the nature of institutions that determine the fate of
nations. Using historical data, they show that the
success of nations mostly is the product of
inclusive and pluralistic institutions, which provide
opportunities for everyone to participate in wealth
creation. On the other hand, nations fail when they
have extractive institutions, which favor only the
small elite for political and economic power while
extracting resources from the rest.
Schwartz (1999) explores the relationship
between certain values and basic human needs, as
suggested by his six layered model that consists of
embeddedness vs. autonomy, mastery vs. harmony,
and hierarchy vs. egalitarian. He finds that countries
with a higher rule of law, less corruption, and higher
democratic accountability are likely to be tilted
toward autonomy, mastery, and egalitarianism.
Sixth Value: Participatory culture
Participatory culture is necessary to connect the
minds toward common goals. It is a belief in
teamwork. It is a recognition of the power of
connected minds and the understanding that higher
outcomes are achieved by working together. It is a
core value behind the success of the free market
system. It is a recognition of power and productivity
in specialization. As Said Nursi states through a
metaphorical example, teaming can accomplish the
outcomes of 1111 people from four persons. In
other words, if four individuals work individually,
the accumulated outcome of their works would be:
1+1+1+1 =4. They will accomplish the total
outcomes of four individuals. However, if they work
as a team, side by side (true solidarity), united as
one figure with nothing in between (no horizontal
hierarchy), at the same level (no vertical hierarchy),
the outcomes of their works will be equivalent to
that of 1111 individuals.
“If four times four remain apart, they have a
value of sixteen. But if, through the mystery of
brotherhood and having a common goal and
joint duty, they unite coming together shoulder
to shoulder on a line, they acquire the strength
and value of four thousand four hundred and
forty-four. Indeed, numerous historical events
testify that the moral strength and value of
sixteen self-sacrificing brothers have exceeded
that of four thousand” (Nursi, 1996, The
Flashes, p. 215).
The West has realized the power of participation in
accomplishing higher productivity. Indeed, in
Wealth of Nation, Adam Smith explains the merits
of teamwork and productivity through a pin-maker.
He refers his observation at a pin factory in which
pin production is divided into eighteen distinct
tasks. One person is specialized in up to three tasks
rather than doing all tasks as described in the book:
“One man draws out the wire, another straights
it, a third cuts it, a fourth points it, a fifth
grinds it at the top for receiving, the head; to
make the head requires two or three distinct
operations; to put it on is a peculiar business, to
whiten the pins is another; it is even a trade by
itself to put them into the paper…. Each
person, therefore, making a tenth part of fortyeight thousand pins, might be considered as

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 13
making four thousand eight hundred pins in a
day. But if they had all wrought separately and
independently, and without any of them having
been educated to this peculiar business, they
certainly could not each of them have made
twenty, perhaps not one pin in a day” (Smith,
2005, Book 1, Chapter 1).
The West has extended the spirit of participatory
culture beyond economic transactions. They
encourage participation of stakeholders at school,
work, and governmental levels. While the East
mostly has a leading figure with many blind
followers, the West promotes collaborative
participatory leadership. In the East, the political
system is mostly a strong man show even if it
purports to be democratic because people do not
truly believe in a participatory culture. Bureaucracy
is a means to control people rather than serve them.
Political institutions also have received
significant attention in NIE. For instance, some
political economists explore efficient political
institutions that allow bureaucrats to make policy
choices that will last beyond their own terms of
service (Moe, 1989). Inclusive, rather than
extractive, political and economic institutions are
essential for real economic transformation. Even
though it is possible to have economic growth
under a dictatorship, in the long run, it is not
possible to accomplish market efficiency without
participatory political institutions defining and
enforcing property rights.
Tabellini (2010) explores the impact of
individual values and beliefs such as trust, control,
respect, and obedience on institutions and
economic development in European regions. Using
historical data for the last few centuries, he reports
a strong positive correlation between the first three
values and economic development while a negative
correlation between obedience and economic
development. He documents higher GDP per
capita and economic growth in those regions with
higher levels of the good cultural values such as
trust and self-confidence, and autonomy. He
concludes that history shapes institutions and
institutions determine economic development in
the long run.
Seventh Value: Accountability
Accountability is the culture of taking
responsibility. It is making those who do not play
the game according to the rules pay the price. It is
an awareness of the opportunity cost for
everything. It is an understanding of fairness in
fulfilling your tasks as a team member of society.
Internalizing accountability is to take personal
responsibility for your mistakes or wrongdoings.
The West has implemented the sense of
accountability at every level. At home, from an
early age, children are given responsibility and
held accountable for consequences. At school,
students are held accountable if they do not study,
while teachers are held accountable if they do not
fulfill their responsibilities. At the corporate level,
workers and managers are given responsibilities
and held accountable to the stakeholders. At the
government level, government officials are held
accountable if they mishandle public resources or
do not fulfill their jobs properly. As a result,
Western countries have the lowest corruption rate
while Eastern countries have high corruption rates.
Indeed, a World Bank study reveals that political
institutions play a crucial role in determining the
occurrence of corruption (Lederman, et al., 2001).
The study points to the importance of political and
legal system as well as freedom of the press in
preventing corruption. Since corruption is largely a
waste of resources, it has a negative impact on the
economy. Many empirical studies reveal that a
high corruption rate is inversely related to
economic growth and development (Aidt, 2009).
Eighth Value: Competence
Competence is the required abilities, knowledge,
commitment, and skills to do a certain task or job.
Thus, feeling competent means to have selfreliance, rather than relying on one’s parents and
the government. It is the awareness of incredible
human potential. It is cognizance of the selftreasure of the mind. The West gives people a
sense of self-confidence at a very early age.
Children are taught how to rely on themselves.
Everyone is pushed to work hard to support his/her
life rather than being dependent on others.
Everyone is expected to trust in their competency
rather than trust in their connections. For instance,
in the US, if you are 18 years old, you are an adult.

14 Necati Ayden
You are expected to work and earn your living.
Even if you happen to stay with your parents after
18, you are expected to pay rent and share utility
and grocery bills. In the East, you could rely on
your parents until you die. You have a free lifelong
credit line from “Baba (father) Bank”. We might
consider the West to be heartless and the East to be
compassionate. In the end, the West helps new
generations to help themselves rather than being
dependent, while the East kills the potential of its
new generation. Thus, the East is compassionate,
but a “compassionate killer”. The West is
heartless, but a “heartless helper”.
Doepke and Zilibotti (2014) explore the role of
parenting in raising their kids as entrepreneurs.
They found that parental upbringing is directly
linked to entrepreneurship skills. They argue that it
was such “entrepreneurial spirit” that led to the
British Industrial Revolution. In a survey of
development experiences of different nations,
Landes (1998) concludes that successful nations
tend to have uplifting cultural values such as thrift,
hard work, tenacity, honesty, and tolerance; while
failed nations are associated with contrasting
values such as intolerance, xenophobia, corruption,
and government welfare dependence.
Ninth Value: Punctuality
Punctuality is to understand the importance of time
and use it for the optimum outcome. It is a
necessary byproduct of accountability and
competency. It is a conviction that no time shall be
wasted in unearthing the treasures of the mind. It is
a belief in doing everything in a timely manner to
accomplish higher outcomes. The West has mostly
succeeded in making people punctual in fulfilling
their work. At a very early age, it teaches
individuals the importance of punctuality. It makes
them develop a second nature internalizing
punctuality. On the other hand, the East does not
value time that much (White, Valk, and Dialmy,
2011). The most common waste in the East is the
mind and time. This is a major impediment to
development because knowing the value of time
and completing the work on time is an important
factor affecting productivity and economic growth,
as recently found by economists (Basu and
Weibull, 2002).
Tenth Value: Plurality
Plurality is not only tolerating differences but
treasuring them. It is to realize the enriching value
of being different. It is to acknowledge diversity as
the essence of human beings. It is to become aware
of the importance of the treasure of the mind of
different individuals regardless of their cultural
outlook and preferences. It is an understanding that
syntheses of existing ideas could be possible when
you have competing ones. The West has realized
the importance of a pluralist culture in modern
times to benefit from the minds around the world.
They provide a fertilizing environment for people
of different views to live side by side toward
common goals. The relatively pluralist nature of
American and European countries is a testimony to
the Western success in creating a plural society. In
a global world, learning how to live with people of
different cultures and religions is not an option
anymore. It is a necessity. And it is an important
factor for economic development. Indeed, some
studies provide clear evidence on the positive
contribution of tolerant culture to economic growth
(Berggren and Elinder, 2012).
6. Challenges in Change and Path Dependence
How to help the rest of the world to be as efficient
as the West? Economists used to think that it is easy
to bring the change. Indeed, early neoclassical
analyses predicted that poor countries would have
higher growth rates compared to wealthy countries
because of diminishing returns to capital in the
latter. Ironically, the prediction turned out to be
false. Some economists suggest that the reason
behind this false prediction was the underestimation
of institutions (Knack and Keefer, 1997). Using
empirical evidence, they argue that the ability of the
poor countries to catch up with the rich ones is
determined by institutional quality. Indeed, those
studies conclude that in the absence of proper
institutions, the gap is growing and the poor are
getting poorer.
Ironically, even though it has taken perhaps ten
millennia to truly appreciate the ten underlying
social and cultural values leading to scientific and
economic development, we still do not know how
to create those institutions with their embedded
values for at least half of the world’s population.
Indeed, it is not easy to bring change to society.

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 15
Particularly, changing underlying values takes a
long time. That is because of the collective
learning manifested in a society over time. In
Hayek’s terms, collective knowledge makes people
do things in particular ways. It is culture to
transmit our experience from generation to
generation through an “accumulated stock of
knowledge” (Hayek, 1945).
Path dependence is a key concept developed to
explain the challenges in change. The concept was
originally proposed by Brian Arthur (1988, 1989)
and Paul David (1985) to describe the difficulty in
the path of technological change. A well-known
example is the QWERTY layout for typewriters.
Even though we have invented better keyboards
for faster typing, the majority of the people still
stick with the QWERTY layout. Path dependence
is also a useful concept to understand why it takes
hundreds of years to change mental models and
embedded values behind institutions. Path
dependence means that we could not ignore
completely the economic choices we made
yesterday when we decide on new ones today. Path
dependence theory predicts very slow change in
those values because of our cognitive dependence
on historical knowledge. In other words, the theory
argues that history does affect the way we think
about our problems. It is not easy to change
beliefs, customs, or taboos in the short run.
North agrees that change is not easy due to
path dependence.
“Once an economy is on an “inefficient” path
that produces stagnation it can persist (and
historically has persisted) because of the nature
of path dependence. Institutional path
dependence exists because of the network
externalities, economies of scope, and
complementarities that exist with a given
institutional matrix… paths do get reversed….
but reversal is a difficult process about which
we know all too little” (North, 1993, p. 3).
Thus, the key question is how to change the path
toward productive social and economic outcomes.
North defines five essential characteristics of
institutional change: (1) Ongoing interaction of
institutions and organizations. (2) Ongoing
competition leading to the gaining of knowledge
about organizational and institutional changes. (3)
The institutional framework with perceived
knowledge and skill for a better pay-off. (4)
Mental models leading to the right perception of
pay-off and means. (5) Incremental and pathdependent institutional changes as a result of
economies of scope, complementarities, and
network externalities (North 1993, p. 6). We think
the lasting changes shall begin at the value level.
As it is not possible to build a tall apartment
without a sound foundation, it is also not possible
to build lasting institutions and organizations
without supportive social and cultural values.
North (1993) argues that it is not possible to
replicate the success of developed countries by
transferring formal political and economic rules to
the third world because “the informal norms and
enforcement characteristics” are different. Thus, it
is almost impossible to have overnight economic
revolution. Rather, change is evolutionary because
it takes time to change underlying values.
“Revolutions are extraordinary and even when they
occur turn out over time to be far less
revolutionary than their initial rhetoric would
suggest” (North, 1993, economic history, p. 4).
As stated in his Nobel Prize speech, Coase
referred to the challenges of Eastern Europe in
moving toward the market economy without
establishing sound institutions:
“The value of including…. institutional factors
in the corpus of mainstream economics is made
clear by recent events in Eastern Europe. These
ex-communist countries are advised to move to
a market economy, and their leaders wish to do
so, but without the appropriate institutions no
market economy of any significance is
possible” (Coase, 1992, p. 714).
Two years later, Douglas North made a similar
comment about the importance of institutional
environment in his Nobel Prize speech. In his
view, even though we are now better informed in
terms of understanding the importance of polities
because “they define and enforce the economic
rules”… through creating and enforcing “efficient
property rights”. However, we still “know very
little about how to create such polities” (North
1994, p. 366).
7. Concluding Remarks and Future Studies
16 Necati Ayden
Is it possible to close the multi-centurial gap
between the West and the East? Is it possible to
catch up with the West in science and technology?
If yes, how? We think it is possible because the
gap is reduced to zero for every generation. Death
works as the perfect equalizer. While death kills
the old generation with all their knowledge and
experience, birth allows the new generation to start
from scratch at the perfectly equal level. Indeed,
there is no difference between children born in the
West and those born in the East. They all are
equally ignorant when they begin their journey on
this planet. They are born knowing nothing but few
survival instincts. This means that it takes one
generation to close the gap. In other words, if the
East were to learn the lessons from the West and
allocate enough resources to the mining of minds
through instilling uplifting institutional values,
establishing and enforcing right formal and
informal institutions, and developing proper
educational, legal, political, and economic
organizations, it could close the gap. The most
important change agent is formal and informal
education. The East needs to, first and foremost,
raise a new generation based on the uplifting
institutional values.
In this paper, we try to make a strong argument
that the Muslim world needs to regain certain
formal and informal institutional values to catch up
with the West. We think those values are not
Western, but universal. Indeed, we can show
evidence from the primary Islamic sources (the
Qur’ān and
ḥadīth) supporting each one of those
values
4. We argue that those values are similar to
the laws of nature; whoever follows them can
succeed. From the
tawḥīdi perspective, God is in
control of everything, not only physical
phenomena but social and individuals ones as well.
Nothing happens without God’s will, knowledge,
and power. He governs the physical world through
certain physical laws. Whoever complies with
those laws, they succeed. Whoever contradicts
(4) For further discussion on this subject please refer to the
following paper: Aydin (2016): “Ten Institutional Values
for Socio-Economic Development: Preached in the Muslim
World, Practiced in the West”, presented at the International
Conference on Islamic Finance, Islamic Economic
Development and Sustainability, 25-26 July 2016, Durham
University. The paper will be published in a book.
those laws, they fail. Similarly, one might argue
that God is directing individual and social affairs
through certain law-like values. The success of
individuals and society depends on compliance
with those values. In general, in this world, God
grants success to those who follow certain values
such as justice, fairness, accountability,
competence, etc. even if they are not believers.
During the Golden Age of Islam, Muslims used to
follow those values, therefore, they were
successful. However, once they gave up on those
values, they began failing in socio-economic
development. Then, the West picked up those
values and began practicing them. Thus, it is no
surprise that God has granted the success to the
West as they follow certain values in their
economic, political, and legal entities.
Unfortunately, the education system in the East
is far from its counterpart in the West. The East
does not see human minds as the most valuable
treasures to be discovered. Rather, it trashes the
mind rather than treasuring it. It fills the empty
mind with junk ideologies. Parents and educators
in the East generally treat children like computers
and upload certain knowledge to their memory,
rather than helping them to write their own
programs and unearth their own treasures. Minds
are chained through education rather than opening
minds and eyes to different ideas.
If the East wants to catch up with the West, it
first needs to understand that the real power,
wealth, and value come from “minds”, not mines
or minerals. It needs to perceive the minds as a
treasure more valuable than the treasure of gold
and diamonds. It needs to set up a good education
system that encourages students to unearth their
own gold and diamonds. Of course, such change
cannot happen overnight. It will take time. Indeed,
the change shall be evolutionary, not revolutionary.
It shall be through the use of smart power, not hard
or soft power. We argue that real change is not
possible through military power (hard power) or
political power (soft power), it is possible only
through proper formal and informal education
(smart power). It is through changing mental
models and instilling the uplifting values discussed
in this paper.

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 17
We argue that the real transformative socioeconomic change shall begin at the informal
institutional level first. Then, the formal
institutions and organizations shall be reformed.
The change has to start at the family level first.
Parents should be educated to implement
institutional values such as liberty, critical
thinking, and consultation at home. The
educational system shall be reformed to assure that
curricula reflect those values. Teachers should be
trained to practice those values at school to set an
example for students. More importantly, religious
messages should incorporate those values as well.
Religious teaching shall not be based on duality of
affairs that are related to this world and hereafter.
Rather, they shall be presented in a united manner
in which worldly affairs are just another face of
deeds related to the hereafter. Thus, Muslims shall
not consider Islam as something dealing with
worship in the form of relationship between human
and God. Rather, they shall consider Islam as a
guideline for human to human relationships based
on certain values. We argue that once we
incorporate ten institutional values at home, school
and mosques, we can easily create necessary
formal institutions and organizations to bring real
socio-economic transformation.
Indeed, the following Qur’ānic verse clearly
refers to internal transformation at the individual
level as a necessary condition for societal change
at the macro level: “…Verily, God does not change
men’s condition unless they change their inner
selves…” (Qur’ān, 13:11). We argue that the
condition meant in the verse above is informal
institutional values such as fairness, hard work,
competency, teamwork, etc. Indeed, another verse
explicitly states that people can have only what
they deserve in life: “That man can have nothing
but what he strives for” (Qur’ān, 53:39).
We suggest that future studies should use a
structural equation model with formative and
reflective variables to test the role of the ten
internalized institutional values in explaining the
success and failure of development in the West and
the East. We hypothesize that those values affect
development through the mediation of institutions.
Thus, we suggest conducting mediation analysis to
understand which values work through which
institutions in effecting development. We think
that empirical evidence will help to convince
policy makers and educators to give priority to
institutional values over organizations or even
institutions themselves.

18 Necati Ayden
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Necati Aydin is Associate Professor of Economics at Alfaisal University College
of Business. E-mail: [email protected]
Dr.Aydin is an associate professor of economics at Alfaisal University. He received his bachelor’s degree in
Public Finance, master’s degree in International Economics, and two doctoral degrees, one in Education
and the other in Economics. He worked as a researcher at Florida State University and Florida TaxWatch
Research Institute for nine years after receiving his first doctoral degree. He also taught at Florida A&M
University and Tallahassee Community College for several years. He had worked at King Saud University
for 3.5 years before moving to Alfaisal in August 2014.
Dr.Aydin has conducted research in variety of topics including local and state government budget analysis,
economic impact studies, tourism, higher education, virtual education, information technology, and
Medicaid. He has published theoretical and empirical papers on these matters. He presents his works
through conferences and seminars at top universities around the world including Harvard and Cambridge.
In total, Dr. Aydin has completed over forty research projects; authored seven, translated two, and coauthored three books; and published many peer-reviewed articles. Dr.Aydin currently focuses on Islamic
economics, human nature, subjective well-being, neureconomics, and institutional economics. He is
currently directing three projects worth of nearly four million riyals funded by KACST and SAGIA. He is
also technical director of three-year project on corporate governance index. He has published in top
academic journals including Journal of Business Ethics, International Journal of Social Economics,
International Journal of Islamic and Middle Eastern Finance and Management etc.
In the field of teaching, Dr.Aydin has experience of almost teaching all economics courses at graduate and
undergraduate levels including financial econometric, managerial economics, micro- and macroeconomics, advanced economic analysis, labor economics, international economics, etc. He has received

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 21
teaching excellence grants and awards few times. He has developed and conducted several effective
teaching workshops at different universities.

22 Necati Ayden
Institutional Values Needed for Transformative
Socio-economic Development in the Muslim World
المستخلص العربي
القیم المؤسسیة اللازمة للتنمیة الاقتصادیة والاجتماعیة التحویلیة في العالم الإسلامي
تستكشف ھذه الورقة القیم المؤسسیة الأساسیة اللازمة للتنمیة الاجتماعیة والاقتصادیة التحویلیة في العالم الإسلامي. تبدأ الورقة
بدراسة دور القیم المؤسسیة المساھممة في نھضة الاسلام في عصوره الذھبییة وكیفة انتقالھا إلى الغرب. ومن ثم یعرض الاقتصاد
المؤسساتي الجدید كأداة فعالة لفھم التنمیة على المدى الطویل. وتضیف الورقة لأدبیات الاقتصاد المؤسسي من خلال التطرق
لأھمیة القیم المؤسسیة الضمنیة )الحریة والتفكیر النقدي والعدالة وسیادة القانون والمساواة وثقافة المشاركة والمساءلة والكفاءة
والالتزام بالمواعید والتعددیة( في تفسیر النجاح الاجتماعي والاقتصادي في الغرب في حین فشل العالم المسلم في القرون القلیلة
الماضیة. وتعرض الورقة الدلیل على وجود ھذه القیم في التعالیم الإسلامیة رغم غیابھا عن حیاة المسلمین في العصر الحدیث.
وتخلص الورقة الى توصیة حول السیاسة التنمویة لبلاد المسلمین على أساس القیم المؤسسیة الضمنیة.

Institutional Values Needed for Transformative Socio-economic Development in the Muslim World 23