Crescent-Shaped Decline

Why have economies in Muslim countries been slow to develop?
June 1, 2011
Islamic society flourished for much of its first half-millennium, but today, Muslim economies worldwide lag behind the West in many basic ways: There are few large private companies and sophisticated financial exchanges, and massive unemployment among youth plagues a large number of countries.

Some have suggested that geography, colonialism, Muslim attitudes, or some incompatibility between Islam and capitalism have hindered these countries. Timur Kuran, professor of economics and political science and Gorter Family Professor of Islamic studies at Duke, has offered a more nuanced hypothesis in a new book, The Long Divergence: How Islamic Law Held Back the Middle East.

Starting around the tenth century C.E., Kuran says, Islamic legal institutions slowed or blocked the emergence of central features of a modern economy. The Islamic inheritance system—which served to divide individual fortunes—and the absence of the corporation, Kuran says, are among the factors that have prevented growth.

“Classical Islam’s distinct combination of economic institutions was obviously compatible with success in the medieval global economy,” Kuran says. “But they failed to produce the transformations necessary for keeping the Middle East globally competitive.” Kuran hopes his effort will help people develop a more complex understanding of the history of the Islamic Middle East and perhaps also serve to cultivate an appreciation for the unintended consequences of certain social institutions.