Rationalizing the Takaful organizational form with institutional theory

Maryam Alhalboni, Muhammed Shahid Ebrahim and Wahyu Jatmiko

Chapter 27 in Handbook of Banking and Finance in Emerging Markets, 2022, pp 506-522 from Edward Elgar Publishing

Abstract: This article examines the organizational structure of Takaful ('Islamic' insurance) as it constitutes an interesting case study of a relatively inefficient system that has grown in popularity. This challenges the neoclassical economics view that the most efficient organizational form succeeds. We employ institutional theory to shed light on this puzzle. We realize the resolve of Muslim religious scholars and their political Islamic compatriots to regain legitimacy is the primary reason why this inefficient institution exists. Our results in this form of insurance lead us to question the ideology of blending religious values in the broad financial services sector. We conclude that it will ultimately lead to financial regression, perpetuate the further decline of the emerging Muslim economies and reinforce the spatial disparities between them and the developed world.

Keywords: Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781800880900/9781800880900.00036.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:20452_27

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().