Durham University
Programme and Module Handbook

Postgraduate Programme and Module Handbook 2007-2008 (archived)

Module SGIA45815: ISLAMIC POLITICAL ECONOMY AND SHARIAH COMPLIANT FINANCE

Department: Government and International Affairs

SGIA45815: ISLAMIC POLITICAL ECONOMY AND SHARIAH COMPLIANT FINANCE

Type Tied Level 4 Credits 15 Availability Available in 2007/08
Tied to L2K107
Tied to L2K207
Tied to M1K507
Tied to M9K607
Tied to M9L007
Tied to M1K607

Prerequisites

  • None.

Corequisites

  • None.

Excluded Combination of Modules

  • None.

Aims

  • To provide students with an advanced understanding of key concepts and theories of Islamic political economy.
  • To enable students to critically evaluate the contributions of leading scholars to the fields of Islamic political econmy and Islamic economics.
  • To provide students with an advanced understanding of the principles and implications of shariah law for economic and financial systems.
  • To critically examine the systems of governance and regulation applied to Islamic banking and financial intermediation.

Content

  • 1. Scope and definition of Islamic political economy - The role of the state in Muslim society. Religious law versus state law. The remit of shariah courts. Sources of Islamic law and the four major schools of Islamic jurisprudence.
  • 2. The principles of Islamic economics and finance - Relationship with conventional economics and finance. Methodological controversies and the interpretation of Koranic teaching and the Shariah law. The position of Syed Naqvi. The norms for ethical behaviour by market participants. The moral justification for rewards and issues of income distribution.
  • 3. Classical Islamic economic thought - Ibn Khaldun's moral theory of the business cycle. Just prices, market prices and the Hisba. Economic organization and property rights.
  • 4. Islam, capitalism and Marxism - The views of Muhammad Baqir Al-Sadr and Umer Chapra. Nejatullah Siddiqi on the role of the state in an Islamic economy. Taxation and zakat collection.
  • 5. Islam and economic development - Objectives of development in an Islamic society. Dissatisfaction with conventional measures of development.
  • 6. Islamic banking principles and methods - Islamic alternatives to conventional banking. The rationale for the prohibition of riba and its consequences. Islamic financing techniques: murabaha, bai al salam, ijara, mudaraba and musharaka.
  • 7. Islamic banking in practice - The experience of Islamic banking in the Middle East, Malaysia and Europe. The viability of Islamic banking in a conventional banking environment. Islamisation of a financial system: the case of Iran.
  • 8. Islamic financial markets - Financial markets in the Islamic world and applying shariah law to stock market dealings. Islamic sukuk securities. The issue of gharar. The emergence of Islamic mutual funds. Islam and insurance.
  • 9. The Iranian and Saudi Arabian Islamic political economy models - Processes for ensuring law is Sharia compliant. The role of Iran's council of moral guardians. The 1983 Usury Free Banking Act and its implications for Iran. Regulation of the banking and financial systems compared.

Learning Outcomes

Subject-specific Knowledge:
  • An advanced knowledge of the nature and scope of Islamic economics and finance and its relationship with conventional economics and finance.
  • An advanced understanding of Islamic views on trade and commercial activity and the moral justification for rewards under the Shariah law.
  • Advanced knowledge and understanding of the views of Islamic economists on capitalism and Marxism, notably those of Muhammad Baqir Al-Sadr, Umer Chapra and Nejatullah Siddiqi.
  • An advanced understanding of the principles of Islamic finance and an advanced knowledge of current practice.
Subject-specific Skills:
  • The ability to evaluate whether the lack of development of many Muslim countries is explained by behavioural factors and consider Ibn Khaldun's moral theory of the business cycle.
  • The ability to explain convincingly the rationale for the prohibition of riba and its consequences for finance in Muslim countries.
  • The ability to critically review the experiences of Islamic banking in the Middle East, Malaysia and Europe.
  • An advanced ability to analyse financial markets in the Islamic world and explain how Islamic mutual funds operate.
  • The intellectual capacity to judge the extent to which Iran and Saudi Arabia can be considered models of Islamic economies.
Key Skills:
  • Independent learning within a defined framework of study at an advanced level.
  • Independent thought in analysing and critiquing existing scholarship on the subject area and in evaluating its contribution.
  • The ability to work to a deadline and complete written work within word limits.
  • Advanced essay-writing skills.
  • The ability to seek out and use relevant data sources, including electronic and bibliographic sources.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

  • The modes of teaching are seminars, which allow the students to discuss freely the assigned topics. Guidelines will be given by the tutor. At MA level, seminars are appropriate for the students because they are from different academic backgrounds. Seminars also allow a better exchange of views and ideas.
  • Assessment is through formative presentation and discussion, as well as a summative essay on a specific topic. Essay writing is an appropriate method with the maximum freedom for the students to respond with what they have learnt.

Teaching Methods and Learning Hours

Activity Number Frequency Duration Total/Hours
Lectures 2 First two weeks 2 4
Seminars 8 Weekly 2 hours 16
Preparation and Reading 130
Total 150

Summative Assessment

Component: Essay Component Weighting: 100%
Element Length / duration Element Weighting Resit Opportunity
Essay 3000 words 100%

Formative Assessment:

Individual presentation and discussion. Presentation outline (500 words).


Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University