Zakat: A Case Study of Constraining Free Riding in Charity

18 Pages Posted: 2 Aug 2021 Last revised: 22 Oct 2021

See all articles by Rania Al-Bawwab

Rania Al-Bawwab

Middle Tennessee State University

Date Written: July 30, 2021

Abstract

When the private incentives faced by individuals in a society are not properly aligned with their shared goals, a collective action problem arises. This paper focuses on the free-rider problem of aid, the collective action problem of getting people to contribute privately to charity. It examines a unique Islamic solution to this problem. The third pillar of Islam, zakat, imposes internal religious constraints on free riding. In other words, zakat serves as a mechanism to coordinate expectations and effective communication between Muslims to mitigate the potential for free riding.

Keywords: Zakat, Free Riding, Collective Action Problems, Charity, Religion

JEL Classification: H41, I39, P49, Z12

Suggested Citation

Al-Bawwab, Rania, Zakat: A Case Study of Constraining Free Riding in Charity (July 30, 2021). Available at SSRN: https://ssrn.com/abstract=3896670 or http://dx.doi.org/10.2139/ssrn.3896670

Rania Al-Bawwab (Contact Author)

Middle Tennessee State University ( email )

MTSU Box 190
1301 E. Main St.
Murfreesboro, TN 37132
United States
3373829397 (Phone)

HOME PAGE: http://www.mtsu.edu/peri/phd-fellows.php

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