Social capital and economic performance of the Muslim world

Purpose - The research on causes of economic performance has largely focused on economic factors. However, a simple focus on economic indicators cannot cause sustained equilibrium of economic performance. Social solidarity is of central importance in the fall or rise of a civilization. This study aims to analytically explore and empirically test the relationship of social capital with economic performance of the Muslim world using Islamic perspectives and an inclusive development approach. Design/methodology/approach - This study uses a new index of “interpersonal safety and trust” to measure social capital. The empirical analysis is based on both cross-sectional and panel data methods of estimations. Findings - The empirical findings of the study show that social capital is an important cause of economic performance in the Muslim world. The findings of the study are shown to be robust to different specifications, additional controls, econometric techniques and outliers. Originality/value - To the best of the authors’ knowledge, this is first study of its kindly that analytically explores and empirically tests the relationship of social solidarity with economic performance of the Muslim world using Islamic perspectives.