At the heart of the contemporary Islamic doctrine of economics lies
a set of behavioral norms derived from the first Islamic society in seventh
century Arabia. This paper demostrates that these norms cannot be expected
to serve as the spearhead of a drive for modern economic development. For
one thing, the proposed norms are unlikely to enjoy widespread adherence
in large societies where it is difficult to achieve a common perception
of reality, elicit generalized altruism and overcome the free rider problem.
Secondly, many Islamic norms are ambiguous, and some interfere with institutions
designed to improve the workings of markets.
Journal of Economic Behavior and Organization, 4 (December 1983):