THE DESIGN OF INSTRUMENTS FOR GOVERNMENT FINANCE IN AN ISLAMIC ECONOMY

Nadeem Ul Haque and Abbas Mirakhor
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Nadeem Ul Haque: Research Department and Executive Director in IMF
Abbas Mirakhor: Research Department and Executive Director in IMF

Islamic Economic Studies, 1999, vol. 06-2, 27-43

Abstract: This paper attempts to present a viable approach for the design of an instrument of government finance (and monetary management) in an Islamic economy where conventional transactions based on an ex-ante promise of a risk-free rate of return are forbidden. Resources to finance government infrastructural and development projects can be mobilized through the issuance of a national participation paper (NPP) and this instrument can also serve as an instrument of monetary management. Various conceptional issues underpinning the introduction of such an instrument and methods of calculating a corresponding rate of return are discussed In principle, this approach has been accepted in Iran.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ris:isecst:0089

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