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Dynamic Role of Zakat in Alleviating Poverty: A Case Study of Pakistan

Author

Listed:
  • M. Akram, Mian
  • Afzal, Muhammad

Abstract

Poverty is a curse at individual as well as community level. It is a threat to humanity at whatever level it exists. All the societies of the world have made efforts to address this challenge. Islam being the religion of all times has also presented a comprehensive system to alleviate this curse. The present study explores the application of some of these measures in collective way and brought into consideration the Zakat system exercised in Pakistan since 1980. This is hypothesized that weather Zakat disbursement along with other Islamic measures has proved to bail out the poor from poverty. Descriptive as well as empirical appraisal of the existing system showed that the Zakat disbursement among the poor, needy, destitute, orphans and widows has played a significant role in poverty alleviation. The ARDL approach to cointegration is used to evaluate the short run and long run impact of Zakat disbursement along with the other exogenous variables on poverty. The results of the study show that there is an inverse relationship between poverty and Zakat disbursement both in the short run and long run. The study also investigated the certain flaws in the system operated in Pakistan and suggested the remedies.

Suggested Citation

  • M. Akram, Mian & Afzal, Muhammad, 2014. "Dynamic Role of Zakat in Alleviating Poverty: A Case Study of Pakistan," MPRA Paper 56013, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56013
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    References listed on IDEAS

    as
    1. Monzer Kahf, 1989. "Zakat: Unresolved Issues In The Contemporary Fiqh," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 2(1), pages 1-22, January.
    2. Salman Syed Ali & Sayyid Tahir, 1999. "Dynamics of Growth, Poverty, and Inequality in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 837-858.
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    4. Nasim Shah Shirazi, 2006. "Providing For The Resource Shortfall For Poverty Elimination Through The Institution Of Zakat In Low-Income Muslim Countries," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 14(1), pages 1-28, December.
    5. Ahmad Bello, Dogarawa, 2009. "Poverty Alleviation through Zakah and Waqf Institutions: A Case for the Muslim Ummah in Ghana," MPRA Paper 23191, University Library of Munich, Germany.
    6. Pervez Zammurad Janjua & Usman Ahmad Kamal, 2011. "The Role of Education and Income in Poverty Alleviation: A Cross-Country Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(1), pages 143-172, Jan-Jun.
    7. Gobind M. Herani & Pervez Wasim & Allah Wasayo Rajar & Riaz Ahmed Shaikh, 2008. "The Nature of Poverty and Its Prospects: Pakistan Evidence," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 4(3), pages 184-195, September.
    8. Muhammad Ramzan Akhtar, 2000. "Poverty Alleviation on a Sustainable Basis in the Islamic Framework," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 631-647.
    9. Linh Vu & Bob Baulch, 2011. "Assessing Alternative Poverty Proxy Methods in Rural Vietnam," Oxford Development Studies, Taylor & Francis Journals, vol. 39(3), pages 339-367, September.
    10. Mohammed B Yusoff, 2012. "Zakat Distribution and Growth in the Federal Territory of Malaysia," Journal of Economics and Behavioral Studies, AMH International, vol. 4(8), pages 449-456.
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    Cited by:

    1. Mejda Bouanani & Besma Belhadj, 2019. "Zakat and Poverty Alleviation in Tunisia Using the Fuzzy Approach," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(2), pages 421-432, June.
    2. Salman Ahmed Shaikh, 2015. "Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 1011-1027.
    3. Nilofer, Nilofer & Qayyum, Abdul, 2018. "Impact of Foreign Direct Investment on Growth in Pakistan: The ARDL Approach," MPRA Paper 86961, University Library of Munich, Germany, revised 2018.
    4. Suriani & Ridwan Nurdin & Muhammad Haris Riyaldi, 2020. "Causality Relationship of Zakat, Income Inequality, and Poverty: A Panel Co-Integration Approach," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 875-887.
    5. Mejda Bouanani & Besma Belhadj, 2020. "Does Zakat reduce poverty? Evidence from Tunisia using the Fuzzy Approach," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 835-850, November.

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    More about this item

    Keywords

    Religion; Zakat; Poverty Alleviation; ARDL;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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