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Islam, Inequality and Pre-Industrial Comparative Development

Stelios Michalopoulos (), Alireza Naghavi () and Giovanni Prarolo ()

No 377, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: This study explores the interaction between trade and geography in shaping the Islamic economic doctrine and in turn the comparative development of the Muslim world. We build a model where an unequal distribution of land quality in presence of trade opportunities conferred differential gains from trade across regions, fostering predatory behavior from the poorly endowed ones. We show that in such an environment it was mutually beneficial to institute an economic system of income redistribution featuring direct income transfers in return for safe passage to conduct trade. A com-mitment problem, however, rendered a merely static redistribution system unsustainable. Islam add-ed a set of dynamic redistributive rules that were self-enforcing under large gains from trade and high proportions of arid land. While such principles fostered the expansion of trade within the Mus-lim world they limited the accumulation of wealth by the commercial elite, shaping the economic trajectory of Islamic lands in the preindustrial era.

Keywords: Religion; Islam; Geography; Inequality in land quality; Wealth accumulation; Public good investment; Trade; Conflict. (search for similar items in EconPapers)
JEL-codes: O10 O13 O16 O17 O18 F10 Z12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo and nep-gro
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Related works:
Journal Article: Islam, inequality and pre-industrial comparative development (2016) Downloads
Working Paper: Islam, Inequality and Pre-Industrial Comparative Development (2015) Downloads
Working Paper: Islam, Inequality and Pre-Industrial Comparative Development (2015) Downloads
Working Paper: Islam, Inequality and Pre-Industrial Comparative Development (2014) Downloads
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