Critical perspective on public deficits: contrasting conventional and Islamic views

Ihda Arifin Faiz

Journal of Islamic Accounting and Business Research, 2023, vol. 15, issue 8, 1315-1337

Abstract: Purpose - This study aims to investigate the public deficit issue by contrasting conventional and Islamic views encompassing the paradigm, technical base, orientation and consequence detailed in nine discussions, which are rarely investigated in the research. There is a predisposition that contemporary Muslim scholars discuss the public deficit as well as the private sector perspective, which is used in the conventional conception, withoutribaas a primary feature. Design/methodology/approach - The paper develops a comparative approach that derives two perspectives from the available literature using the qualitative method under the critical thinking method. It was drawn up in detail on how the paradigm and its related budgeting process contribute to public deficits, mainly in government institutions. Findings - The paper reveals a prominent difference in public deficit in the Islamic view from a conventional perspective. From 9 points of comparison, the analysis covers 18 discussion that differentiates between private and public area criticism seems to overlap. The foundation giving a unique perspective in Islam toward public deficit is the concept of ownership that differs from capitalism, mainly the function of public spending is to distribute the wealth among people not for economic growth. The Islamic Government spent for public purposes based on cash-basis budgeting. The budgeting system in Islamic public spending is founded on treasure availability. Research limitations/implications - The paper uses a qualitative method that cannot empirically snapshot the actual or factual condition, in which subjectivity plays a plausible role. Furthermore, there is no actual sample (best practices) of the concept to be examined. Practical implications - The research encompasses overlap between Islamic and conventional perspectives, including public and private issues regarding public deficits. The main beneficiary of the paper is a policymaker, including academicians or practitioners who are appropriate to use the concept in their circumstances. Originality/value - The study is a pioneering study in public deficit comprehensively comparing conventional and Islamic perspectives and drawing up conceptual and technical aspects.

Keywords: Islamic public debt; Conventional public debt; Islamic public deficit; Public debt; Conventional debt; Islamic debt; Public deficit (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-09-2021-0245

DOI: 10.1108/JIABR-09-2021-0245

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