TY - JOUR
AU - Calder,, Ryan
AB - Abstract Why did Islamic finance become durably institutionalized between the 1970s and early 2000s in the Arab Gulf states, where no mass movement demanded it, but not in Pakistan, where activists had demanded it for decades? I argue that institutionalization required a stable coalition among religious authorities, market actors and the state that shared understandings of religio-economic virtue. Those understandings also had to be compatible with the neoliberal financial order. In the Gulf, an elite social movement presented usury as an individual sin and agreed on the roles of religious authorities and the state in Islamic finance. Their vision was compatible with the social order of national and international credit markets. In Pakistan, a stable coalition and shared understandings were absent. A popular Islamist movement, presenting the defeat of usury as a large-scale political–economic transformation, pursued a revolutionary overhaul of the economy that threatened domestic and international financial interests. 1. Introduction In 1970, there was no ‘Islamic finance’. But if conditions for Islamic finance looked auspicious anywhere, it was in Pakistan. More than anywhere else, the modern Islamic economy has intellectual roots in 20th-century South Asia (Kuran, 1997). In Pakistan, in the late 1950s, perhaps the earliest experiment in modern Islamic finance appeared: a rural bank that extended interest-free credit (Wilson, 1983, p. 75). Pakistan’s constitutions of 1956, 1962 and 1973 all called for the elimination of usury (ribā) on Islamic grounds. And Abū al-Aʿlá Mawdūdī, the Pakistani scholar-activist described as the Karl Marx of political Islam (Paracha, 2015), had long demanded the Islamization of Pakistan’s economy and enjoyed widespread support there. In 1977, a government sympathetic to Mawdūdī’s vision took power and declared that it would Islamize Pakistan’s financial system by outlawing interest. Islamic finance was to support a just, virtuous Islamic socioeconomic system. By contrast, circa 1970, the Arab Gulf countries looked like unpromising soil for Islamic finance. Neither constitutions nor governments advocated the application of Islamic principles to finance. Leading religious authorities described usury as a personal sin. No activist movement demanded the elimination of interest from the economy, and the press said little on the topic. How to explain, then, the state of Islamic finance by the early 2000s? As Figure 1 shows, in 2002–2003, Islamic banks held much larger market share in the Gulf than in Pakistan. In 2002, Kuwait’s second-largest commercial bank was Islamic; so were Saudi Arabia’s fourth-largest, Qatar’s fourth- and fifth-largest and Bahrain’s fourth-largest.1 By contrast, in Pakistan at this time, Islamic finance was in disarray—‘a disappointment to many advocates of shariah compliant financing’ (italics in original) (Wilson, 2002). Not a single Pakistani domestic Islamic commercial bank existed until 2002, even though activists had been demanding Islamic finance for decades. Figure 1. View largeDownload slide Islamic banking’s market share by country (2002). Sources: State Bank of Pakistan (2010); von Pock (2007, p. 51). Figure 1. View largeDownload slide Islamic banking’s market share by country (2002). Sources: State Bank of Pakistan (2010); von Pock (2007, p. 51). Why did Islamic finance become durably entrenched in the Arab Gulf economies, but not in Pakistan? This question takes on special significance as Islamic finance grows into a major feature of the world financial landscape. Global Islamic financial assets now total approximately $2.5 trillion,2 exceeding the financial asset base of India and South America. One percent of global financial assets are now Islamic.3 This article also speaks to a broader theoretical question: what conditions allow for the stable establishment of a modern economic institution regulated by religious values? Sociologists have long theorized how modern economic institutions emerge, stabilize and change (White, 2002; Fligstein, 2001; Schneiberg, 2007). They have also explored how actors construct virtuous economic institutions, and how new conceptions of virtue emerge from processes, such as market formation, valuation and certification (Zelizer, 1979; Healy, 2006; Quinn, 2008; Fourcade, 2011; Bartley and Child, 2014). And they have investigated the religious roots of modern rational capitalism (Weber, 2002 (1905)). However, few sociologists have theorized recently how actors succeed or fail in bringing modern economic systems under explicit religious control.4 This article shows that the world’s most conspicuous religio-economic project today,5 Islamic finance, managed to succeed only when it formed a social world of its own. In this case, the institutionalization of a contemporary religio-economic project required (a) a stable coalition among religious authorities, market actors and the state that (b) shared basic understandings of religio-economic virtue and of the purpose of the project. Those shared understandings also had to be (c) compatible with the neoliberal financial order. In the Gulf, a coalition of pious millionaires and powerful ulama (religious scholars) formed an elite social movement that enjoyed good relations with the Gulf’s patrimonial dynasts. The Gulf coalition’s conception of usury as a problem of individual sin made possible a form of Islamic finance in which customers could freely choose Islamic financial products certified as sin-free by religious scholars. Gulf-style Islamic finance did not challenge the neoliberal financial order, but rather created new market opportunities for domestic and international banks. In contrast, the Pakistani popular movement sought to impose a groundbreaking new financial system on all Pakistanis. Business elites and senior civil servants resisted mightily. Pakistan’s position as a semi-peripheral debtor nation undergoing structural adjustment also stymied the movement. Eventually, in 2002, a neoliberal military government imposed the Gulf model on Pakistan, short-circuiting Islamic financial revolution. While we may now take for granted that Islamic finance forms part of the global neoliberal financial order, and that a vision of Islamic finance challenging this order would fail, such outcomes only appear natural in hindsight. As discussed at the end of the article, the same movement that ultimately failed to Islamize Pakistan’s financial system succeeded in Islamizing Pakistan’s education and justice systems, with results that persist today. It is therefore worth investigating the unique characteristics of national and international financial fields and the conditions under which religio-economic projects may challenge them or, alternatively, merge into them. 2. Religio-economic projects and field theory Religio-economic projects are efforts to design and build modern economic institutions explicitly governed by religious rules, principles or values. At the most ‘macro’ level, they include ventures to transform entire national economies. Besides the Pakistani case discussed here, one example is the post-1979 Iranian state’s venture to build an Islamic economy that would eliminate poverty and provide robust social welfare (Harris, 2017, pp. 80–115). At the ‘meso’ level, some religio-economic projects have become social movements, such as the Religious Kibbutz Movement (ha-kibbutz ha-dati) (Fishman, 1983). Others have ‘gone secular’, such as Fair Trade, which has Christian roots (Anderson, 2015). Still other religio-economic projects remain primarily intellectual endeavors, such as Buddhist economics (Brown, 2017) and Hindu economics (Vinod, 2012). Historically, most religio-economic projects have fallen within the ‘moral economy’ paradigm (Thompson, 1971; Scott, 1976; Tripp, 2006) insofar as they seek to institutionalize fairness, justice and risk aversion in defense against the commodifying effects of markets. However, in recent decades, religio-economic projects have increasingly embraced markets. Entrepreneurs have launched new religiously certified sectors, such as Islamic finance, halal biotech (Fischer, 2016), Christian mutual funds (Peifer, 2011), kosher enzymes (Fischer, 2016) and cow-urine-based cleaning supplies for Hindus (Crair, 2018). This article proposes that field theory suits the study of religio-economic projects particularly well. Field theory depicts all social action as being embedded in socially constructed fields where individual or collective agents have structural positions reflecting their relationships with other agents (Bourdieu, 1984; Martin, 2003; Fligstein and McAdam, 2012). It tackles the structure-agency problem by presenting actors as simultaneously shaped by their history, resource endowments and field positions while also formulating and executing their own strategies. Fittingly, religio-economic projects typically involve coalitions and contests among heterogeneous actors. While strategies depend partly on the material interests of actors (such as bankers, customers and state leaders), they cannot be reduced to straightforward pursuit of those interests. Field theory also lets us analyze the conditions under which religio-economic projects can reconcile conflict between religious and economic logics. It thus extends research in the institutional logics (IL) literature, which has examined tensions among the logics of arenas, such as the capitalist market, religion, the bureaucratic state and the nuclear family (Friedland and Alford 1991).6 Scholars of IL explore how institutional logics are blended, bridged and reconciled. For example, academics cope with the rigor-relevance contradiction by publishing basic research early in their careers and applied research later (Bullinger et al., 2015); universities confront multiple legitimacy criteria by compartmentalizing identities (Kraatz and Block, 2008); and hybrid organizations can turn plural logics to their advantage (Hsu et al., 2012; Battilana et al., 2017). Boone and Özcan (2016) describe how Turkish Islamic bankers decide whether to hybridize logics by hiring employees from conventional banks or to maintain ideological purity by not doing so. Building on such explorations, but returning to the birth of Islamic finance—a seminal time of institutional emergence and experimentation—this article explores how particular field environments facilitate (in the Gulf) or impede (in Pakistan) the reconciliation of logics. Fligstein and McAdam’s field theory views strategic action fields as ‘the fundamental units of collective action in society’ (2012, p. 9). Strategic action fields have their own internal social order, formed by incumbents trying to preserve their dominance and challengers vying to unseat them. This social order is defined by shared understandings about (a) the general stakes of strategic action (the ‘what-are-we-playing-for’); (b) the state of social relations among actors in the field (e.g. challengers and incumbents, cooperative or hierarchical relations); (c) the formal and informal rules governing which tactics are possible or legitimate; and (d) interpretive frames for comprehending action. Strategic action fields are embedded in a latticework of other strategic action fields, so effects in one field ripple into proximate fields (Fligstein and McAdam, 2012, p. 19). Often, fields nest within one another like ‘Russian dolls’ (Fligstein and McAdam, 2012, p. 58). For example, during the present phase of financial globalization, national financial fields—including domestic banks, national regulators and local customers—fit within the international financial field, in which large multinational banks and the International Monetary Fund (IMF) exert power. This article will show how the nestedness of Gulf countries’ financial fields within the international field helped the Gulf model of Islamic finance thrive, whereas the nestedness of Pakistan’s financial field within the international field stymied the Pakistani Islamists’ vision for Islamic finance. When challengers succeed in introducing novel understandings or innovative tactics (McAdam, 2003) that disrupt existing models of action, social orders and governance regimes, they may help create new fields. In the late 20th century, microfinance, Islamic finance and socially responsible finance have all introduced novel understandings of financial action into existing fields of national and international finance—while quickly being subsumed in Russian-doll fashion. We will see that the understandings of Islamic finance shared by the Gulf coalition allowed existing national and international financial fields to absorb Gulf-style Islamic finance smoothly. In contrast, the understandings of Islamic finance held by Pakistan’s neorevivalist Islamists prevented their project from merging into existing fields. In the theory of strategic action fields, internal governance units (IGUs) are formal non-state institutions that ‘[oversee] compliance with field rules and … [facilitate] the overall smooth functioning and reproduction of the system’ (Fligstein and McAdam, 2012, pp. 13–14). They regulate, enforce, and certify procedures and determine which agents and actions are legitimate (Fligstein and McAdam, 2012, pp. 77–78). Examples include trade associations, accrediting bodies and bond-rating agencies (Fligstein and McAdam, 2012, p. 14). IGUs generally function as a conservative force in that they bear the imprint of powerful incumbents and reproduce ideas justifying incumbents’ dominance. They also free incumbents from responsibility for field management, standardize conventions across the field and link their field to other fields (Fligstein and McAdam, 2012, pp. 14 and 77–78). In religio-economic projects, IGUs may be staffed by religious authorities who certify actions or products as religiously compliant. 3. Islam and finance in the 20th century Interest has long caused controversy in Islam. The Quran states that ‘those who devour usury [ribā] will not stand except as stands one whom the Evil one by his touch Hath driven to madness’, and equates dealing in usury to warring against God (2:275–279). The ḥadīth literature, which comprises records of the Prophet Muhammad’s words and deeds, confirms this position. Historically, a majority of Islamic jurists have averred that all interest counts as usury. In practice, Muslims’ approaches to interest have varied widely over space and time (Calder, 2016). Until the early 1970s, no institution provided large-scale financial intermediation in a manner designed to comply with Islamic law. Secularists and Islamic modernists considered such institutions unnecessary, while most classical scholars and their tradition-minded supporters avoided banking entirely. A few experimental institutions offered interest-free savings and investment in the 1950s and 1960s (Warde, 2010). However, before 1975, shariah-compliant alternatives to interest-bearing loans, savings accounts and other staples of modern banking were virtually unavailable. After all, until the mid-20th century, banking and capital markets in Muslim-majority countries had catered mostly to financially sophisticated elites. Through the 1950s, 1960s and 1970s, however, industrialization and urbanization integrated the middle and working classes into circuits of financial capital. Ordinary people now had to decide whether to deal with banks and interest. Decolonization provided the impetus for imagining a radical break with Western capitalist finance. Seeking to improve Muslims’ socioeconomic conditions and build a more equitable society, post-colonial intellectuals proposed designs for a modern Islamic economy (Tripp, 2006). They felt interest-based finance retarded Muslims’ economic development, making the rich richer and the poor poorer. They pointed to Iran and Egypt, which had relinquished vast commercial concessions to European creditors at the expense of national sovereignty. At a humbler level, capital-poor peasants and shopkeepers faced a sad choice: sell off their assets or turn to moneylenders. While some reformers looked to communism, most considered it incompatible with Islam. The Prophet, himself a merchant, had promoted trade, encouraged the circulation of capital and acknowledged private property. So the intellectuals and activists called for a third way: a modern Islamic financial system that avoided interest while facilitating trade and investment. 4. Case 1: the Arab Gulf states This section examines the trajectory of Islamic finance in the Arab Gulf states (henceforth, ‘the Gulf’). The case study includes Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Qatar and Bahrain.7 The religious, political and economic differences among these countries are small enough that the five can be treated as one case here. All five are rentier hydrocarbon economies ruled since independence by pro-Western, authoritarian Sunni dynastic families. Classical Islamic law shapes everyday piety, and neotraditionalist ulama enjoy wide prestige. These countries have constituted the largest hub of market-driven Islamic finance since the industry’s birth in the 1970s. 4.1 The religious field and state power in the 1970s and early 1980s: neotraditionalist ulama view interest as a problem of individual sin Although Western news media covering Islam in the Middle East often highlight militant discourses, politically quiescent manifestations of Islamic neotraditionalism have held the leading role in the Gulf states since the 1970s (Hatina, 2009). Since the 1970s, the Gulf’s ruling monarchies have maintained a grand bargain with their leading neotraditionalist Sunni ulama. These scholars, employed or funded by the state, oversee endowments and charities, mosque administration, shariah courts, religious curricula and institutions for fatwa issuance (Brown, 2017; Freer, 2018). They insist that Islam play a major role in schooling and domestic life while also encouraging the state to uphold a shariah-minded, socially conservative public morality. However, unlike neorevivalist Islamists, the neotraditionalist ulama avoid challenging the authoritarian dynasts’ pro-Western foreign policies and market-oriented economic policies (Al-Rasheed, 2007, pp. 22–58). They do not question the royal families’ right to rule. These pro-government neotraditionalist ulama are also embedded in Gulf societies. In the 1970s—as today, if to a lesser extent—ordinary citizens could visit famous ulama at their homes or offices for advice on everyday matters (N. Yaquby, interview with author, November 4, 2009). In the 1970s and 1980s, the boom in religious programming in state-controlled media expanded the ulama’s mass audience (Prokop, 2003, p. 78). The growth in religious education in the 1980s, lasting in some Gulf countries into the 1990s, further increased the ulama’s influence. As we will see, Pakistan’s neorevivalists hoped Islamic finance would revolutionize Pakistan’s socioeconomic structure. The Gulf’s neotraditionalist ulama did not. Few had studied economics, and while they considered interest gravely sinful, they saw no need to overhaul entire economic systems. Instead, they affirmed that Islam enshrines free enterprise, private property and the wage-labor relation—so long as immorality and gross exploitation were avoided. Ibn Bāz, a towering figure in the Saudi neotraditionalist ulama, wrote: Islam protects private property (māl8) and its acquisition in lawful ways that avoid injustice, deceit, usury, oppression, and infringement upon others … Islam permits and encourages the acquisition of money, but only in judicious ways (bi-l-ṭuruq al-ḥakīmah) that do not stand in the way of being obedient to God and his Messenger or of performing one’s duties to God. (bin Bāz, n.d., p. 340) Neotraditionalist ulama also asserted that shariah limits state interference in the economy (Muslim World League Islamic Fiqh Council, 2007, pp. 51–52). Still, the neotraditionalist ulama regularly stressed that usury is a grave sin. Saudi Arabia’s establishment ulama categorize usury with adultery, alcohol consumption, filial impiety, banditry and sodomy (bin Bāz, n.d., p. 43). They do not extrapolate, however, to a larger economic system of which the usury ban might be a pillar. We will see that the ‘Gulf model’ of Islamic finance develops around an understanding of interest primarily as individual sin. 4.2 Mobilization (1970s–1980s): the banker–scholar coalition and Islamic finance as elite social movement The Arab oil embargo of October 1973 birthed modern commercial Islamic finance (Warde, 2010). The petrodollar boom of the 1970s and early 1980s enriched Gulf royals and produced a stratum of elite capitalist families close to them who profited from government contracts and private investments. Often functioning as brokers or middlemen (Hertog, 2010), they dominated lucrative sectors, such as construction, transport, retail and oil-related products (Hanieh, 2011, pp. 57–84). Between 1975 and 1984, these elites organized and capitalized the first wave of Islamic banks. Of approximately 30 Islamic commercial banks and the handful of Islamic investment banks established during this period, two-thirds were founded by, or largely capitalized by, just four wealthy individuals: one Emirati and three Saudis.9 All four were pious, experimentally minded entrepreneurs who had grown rich during the oil boom. They called on state-aligned ulama (Kahf, 2004) to advise their Islamic banks about the financial activities that shariah allows. These ulama also legitimated Islamic banking to the public. Commercial Islamic finance did have some precedents (Warde, 2010). Following the rural Pakistani bank of the 1950s, an Egyptian development economist had launched a short-lived interest-free savings bank in the Nile Delta in the 1960s. A pilgrimage savings fund in Malaysia also invested on an interest-free basis in Islamically acceptable ventures only. And the Islamic Development Bank, a multilateral lending organization formed in 1973, announced that it would conduct its financial operations in accordance with shariah. Moreover, a few scholars had written tracts on how an interest-free banking system might work (al-Ṣadr, 1969/1970), including Pakistan’s Abū al-Aʿlá Mawdūdī, who is discussed later. As of 1974, however, none of these projects had produced widely shared understandings about how an Islamic bank would operate, who would judge the ‘Islamicity’ of products and how such judgments would be enforced. They also never cemented a coalition among powerful actors from the state, business and religious fields. The Gulf model of Islamic finance, a true innovation in the social order of markets, entrenched shared understandings reconciling religious virtue with economic interests. In the Gulf model, Islamic banks compete directly against conventional banks. The stakes of the game are essentially the same for Islamic and conventional banks: to maximize profit for their shareholders. However, the Gulf model tweaks the rules of strategic action in national banking fields. Islamic banks earn their profit by selling financial services branded as Islamic and structured to comply with shariah. Thus, they compete not only on the usual dimensions of price, customer service and financial reputation but also on shariah-compliance. 4.2.1 The shariah board The new Gulf model drew actors from the field of religious scholarship into a coalition with wealthy entrepreneurs from the field of business (Figure 2). An innovative IGU called the shariah board10 cemented the link between the two fields. Figure 2. View largeDownload slide The Gulf coalition for Islamic finance (mid-1970s to present). Figure 2. View largeDownload slide The Gulf coalition for Islamic finance (mid-1970s to present). In the late 1970s and 1980s, the Gulf-funded first-wave Islamic banks introduced the shariah board. Shariah boards, each comprising several neotraditionalist ulama, are empaneled by Islamic banks and typically meet several times a year. Upon reviewing the products and operations of the bank they supervise, they either issue fatwas confirming them as shariah-compliant (i.e. Islamically lawful) or advise the banks on adjustments necessary to make them shariah-compliant. Today, virtually every Islamic bank worldwide has a shariah board. The shariah board has created a novel understanding of Islamic economic piety. By drawing on the long-respected discursive tradition of Islamic jurisprudence (fiqh), it also legitimates Islamic banks. Shariah boards stabilize and nurture the field of Islamic finance in various ways. First, they serve a marketing function: prospective customers often check which scholars sit on the shariah board, looking for trusted names (customer interviews, April 2017). Second, as will be discussed in the next section, transnational shariah boards link Islamic finance to the global field of conventional finance. Third, the shariah board has created a lucrative new career for the growing number of new ulama. Although shariah-board members in the 1970s and early 1980s often served for free (C. Docrat, interview with author, January 12, 2014), today’s best-known shariah scholars receive honoraria of over $200 000 per year to sit on one shariah board. Since the most famous scholars sit on dozens of boards, their net income may be over 10 million dollars per year (Informant A, interview with author, October 17, 2016). The shariah board represents an intersection of (a) religious tradition with (b) the rising importance in late modernity of certification systems (Bartley, 2011) and of technical expertise that links agents, devices, concepts and institutional forms (Eyal, 2013). By functioning as an IGU and aligning the interests of Islamic bankers with the religious authority of government-aligned neotraditionalist ulama, the shariah board stabilizes the coalition between the two. 4.2.2 Two modes of Islamic financing: profit-and-loss sharing and interest replication So how do Islamic financial institutions make money without charging interest? They adopt two tactics: (a) ‘profit-and-loss sharing’ (PLS) and (b) what we may call ‘Islamic interest replication’. The difference is essential to this article’s story. In all modern economies, capital moves from its providers to its users in two main ways: equity financing and debt financing. In equity financing (e.g. stocks, mutual funds, private equity and venture capital), the provider earns a profit or loss that varies based on the user’s financial success. In debt financing (e.g. loans, bonds and credit cards), the provider is entitled to her profit—which usually takes the form of interest—regardless of the user’s success. Islamic finance gives these two categories religious valence, while also adding a third. Members of the Islamic-finance community universally deem equity financing Islamically lawful. (‘PLS’ is basically synonymous with equity financing.) They also universally consider interest-based debt financing unlawful. However, they split on what we may call Islamic interest replication. This is financial activity that behaves economically like interest-bearing debt financing while carefully avoiding what shariah boards consider, from a neotraditionalist juristic perspective, to be interest. Interest replication employs combinations of asset sales, finance leases and other techniques that shariah boards deem shariah-compliant.11 Based on these moral distinctions, two very different visions of Islamic finance arose in the Gulf and Pakistan. In the Gulf, Islamic bankers and some of the neotraditionalist ulama advising them agreed that various forms of interest replication are morally acceptable, and that shariah boards would adjudicate whether a given transaction replicated the economic effect of interest in a shariah-compliant way. But in Pakistan, no such consensus formed. Interest replication remained hotly contested throughout the 1980s and 1990s. This difference matters because Islamic banking based on interest replication is less commercially risky and entails lower transaction costs than Islamic banking based on PLS. It also mimics the way conventional banks do business. To operate primarily along PLS lines, national financial systems must be overhauled. Instead of adjustment, a financial revolution is required: a new game with new rules. And for strong proponents of PLS, that is the point. A typical PLS instrument is muḍārabah, a form of partnership. In muḍārabah, an investor contributes capital while a manager contributes work and know-how. The investor bears all losses, while the manager and the investor split the profits according to a previously agreed ratio. The most common interest-replicating instrument is called murābaḥah (‘markup sale’ or ‘cost-plus sale’). Imagine a customer hoping to buy a $1000 appliance on credit. In this kind of murābaḥah financing,12 the Islamic bank buys the appliance from the store for $1000, then after some (usually very short) time sells it to the customer at a markup—say for $1070—on a deferred-payment basis. If payment is deferred for 1 year, for example, this arrangement replicates a 7% interest-bearing financing. 4.2.3 Interest replication wins the day Interest replication has come to dominate Islamic banking (Asutay, 2012). PLS-based instruments compose a very small portion of Islamic banks’ balance sheets. For example, between 1988 and 2006, they represented 1.7% of financing at Bank Islam Malaysia and 9.3% at Dubai Islamic Bank (Nagaoka, 2007). Even when Islamic banks do technically employ PLS instruments, they usually include clauses that guarantee a nearly fixed return. Because Islamic banks can replicate interest-bearing instruments efficiently, nearly every sector of the capitalist financial ecosystem has an Islamic analog today. Islamic banks use interest replication to offer Islamic mortgages, auto finance, unsecured personal loans, checking accounts, savings accounts, credit cards and certificates of deposit. At the corporate and government level, Islamic banks finance billion-dollar acquisitions, imports and exports, real estate, highways, airports, aircraft leases and much more. Islamic haute finance includes Islamic ‘bonds’ (ṣukūk), equity funds and indices (such as the Dow Jones Islamic indices and the S&P 500 Shariah), private equity, venture capital and derivatives. The head of shariah training at a major Gulf Islamic bank conceded: Replication is the biggest issue in Islamic finance. Almost all [Islamic] products are merely replicating the commercial objectives of conventional products. (K. Sherwani, interview with author, November 28, 2013) The spread of interest replication demonstrates how the Gulf-based economic elites who launched Islamic banking managed to entrench shared understandings of Islamic finance that worked in their favor. When the first wave of Islamic banks appeared, the ulama advising them disagreed about its acceptability. Some felt it not only violated Islamic law but also undermined the objective of Islamic banking. Others argued that Islamic law permitted it (at least in certain forms), and hence that scholars could not ban it. Bankers could not themselves declare interest replication acceptable, for they had no such authority in the eyes of the public. But thanks to the recent innovation of the shariah board, they were able to invite scholars friendly to interest replication to sit on their boards. Today, all scholars on shariah boards accept certain modes of interest replication as Islamically lawful. 4.3 Challenge and settlement (1980s–2010s): incumbents absorb the challenge Shared understandings often emerge when movement actors, operating in unorganized social space, improvise solutions to practical problems (Chandler, 1993). My interviews with people who participated in the birth of Gulf Islamic finance suggest that in these early years, they felt they were improvising. Saeed bin Ahmad Al Lootah, founder of Dubai Islamic Bank in 1975 and now a spry nonagenarian billionaire philanthropist, recalls the early days (interview with author, December 18, 2013): Me: In the beginning, where did you get your ideas for how to run the bank? Al Lootah: From the Quran, of course. And from my own experience in life—my knowledge about savings and my years trading pearls around the world. … When I went to experts in economics [for advice], I found they knew nothing about religion. Me: And how did you decide what kind of products and services to offer? Al Lootah: I tried to do the same thing the conventional banks were doing—but by taking away all the elements that included ribā [usury]. The shariah board served as an institutional mechanism for gradually shifting the rules of Islamic finance in a direction amenable to bankers’ material interests. ‘Banks can’t tell the sheikhs [i.e. the religious scholars] supervising them to write a fatwa saying a product is shariah-compliant’, recalls one industry veteran working in Dubai. ‘These guys [i.e. the scholars] take their principles too seriously for that. But [the banks] can decide which sheikhs to invite to sit on their shariah boards … and which ones do you think they invite? The guys with a track record of approving certain kinds of products’ (Informant B, interview with author, November 23, 201313). Processes of selection and elective affinity drove the rules of what counts as shariah-compliant in a liberal direction. The shariah boards, functioning as IGUs, legitimated the emerging logic and rules of the strategic action field. They freed banks from the responsibility of justifying ever-more-sophisticated forms of interest replication to religiously minded customers. Actors in the new field of Islamic finance agree that the field’s purpose is to provide shariah-compliant financial services to Muslims—and not to overturn the existing financial system or re-engineer society. While their shared understandings do reflect the religious commitments and resource endowments of key actors such as the pioneering entrepreneurs and the neotraditionalist ulama, they are not preordained: they cannot be read cynically from the material interests of any individuals, nor derived unambiguously from Islamic scripture. Rather, they emerge out of the balance of power among coalition members, and from ongoing strategic action: ‘the attempt by social actors to create and sustain social worlds by securing the cooperation of others’ (Fligstein, 2001; Fligstein and McAdam, 2012, p. 17). 4.3.1 Gaining respectability and going global The Gulf model has proved so successful that since the 1990s, it has established supranational IGUs and started integrating into the global neoliberal financial order. Since 1990, for example, the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has issued global standards for how to structure shariah-compliant products. While non-binding and unenforceable, these rules invite widespread adoption because internationally renowned shariah scholars sit on AAOIFI’s shariah board. Meanwhile, the Malaysia-based Islamic Financial Services Board (IFSB), established in 2002, advises national governments on how to regulate Islamic banks and capital markets. In 2018, the IMF adopted core principles for Islamic-finance regulation developed by the IFSB (IMF, 2018). Such developments reflect the integration of Gulf-style Islamic finance into the world’s conventional financial architecture. Secondary support services for Islamic finance have also become burgeoning fields of their own. This includes Islamic accounting, into which all of the Big Four global accountancies have moved aggressively (M. Kasbati, interview with author, May 29, 2017; A. Jamall, interview with author, May 31, 2017). Another example is Islamic-finance education. In the late 1970s and early 1980s, ‘expertise in shariah was almost non-existent among lawyers and bankers’, recalls Richard de Belder, a Belgian lawyer and Islamic-finance veteran (interview with author, October 22, 2013). Since the mid-1990s, however, certificates, executive trainings, and master’s and doctoral degrees in Islamic finance have mushroomed. So has the study of Islamic commercial jurisprudence (fiqh al-muʿāmalāt) (N. Yaquby, interview with author, November 4, 2009). Islamic finance has opened lucrative new job opportunities for ulama who might otherwise have become madrasah teachers or imams. It soaks up some of the oversupply of shariah specialists created as Islamic education has expanded since the 1970s. 4.3.2 National fields of finance are gradually ‘going Islamic’ Within the Gulf, Islamic finance has merged smoothly into existing national fields of finance too. It has altered the competitive landscapes of national banking markets without radically transforming them. Between 1985 and 2002, Islamic banking’s market share in the Gulf countries grew (Figure 3). Figure 3. View largeDownload slide Islamic banking’s market share in the Gulf countries (1985–2015). Sources: EY (2017:46–57), Habib (1989:164–167), Paxton (1987), Presley (1988), von Pock (2007, p. 51) Note: In 1985, no Islamic banks had yet received banking licenses in Saudi Arabia. Figure 3. View largeDownload slide Islamic banking’s market share in the Gulf countries (1985–2015). Sources: EY (2017:46–57), Habib (1989:164–167), Paxton (1987), Presley (1988), von Pock (2007, p. 51) Note: In 1985, no Islamic banks had yet received banking licenses in Saudi Arabia. But since the early 2000s, conventional incumbents in national banking fields have absorbed the challenge by ‘going Islamic’ themselves, contributing to continued growth of Islamic banking’s market share through the 2010s (Figure 3). At first, this meant opening Islamic ‘windows’—counters in their bank branches selling only Islamic products. Conventional banks then began opening dedicated Islamic branches. Some have acquired major stakes in Islamic banks. And some have converted themselves entirely into Islamic banks,14 or are in the process of doing so, including the region’s second-largest bank.15 The incumbents were able to go Islamic because the elite social movement’s innovations—interest replication and the shariah board—were by now standardized and portable. Any Gulf bank could establish a shariah board; it only had to find qualified scholars and offer them honoraria. ‘Ninety percent of what it takes to run an Islamic bank is the same as what it takes to run a conventional bank’, recalled one McKinsey consultant in 2003 whose Saudi client bank was considering converting into an Islamic bank (M. Wiegand, conversation with author, November 2003). In the final analysis, the growth of the Islamic-finance field has changed the rules of product structuring and marketing in the Gulf’s national banking markets, but has had limited effects on those markets’ social order. The major incumbents in national banking markets have hardly changed since the early days of Islamic banking, as Table 1 shows for the region’s two largest banking markets.16 Table 1. The six largest banks in Saudi Arabia and the UAE (1985–2015) Notes: (a) Domestic commercial banks only. (b) Emirates Bank International and National Bank of Dubai merged in 2007 to form Emirates-NBD. (c) Al Rajhi received a banking license in 1987, having operated prior to that under a moneychanging license. Sources: Bank annual reports; Habib (1989, pp. 164–167); Al-Hassan et al. (2010, pp. 31–33). View Large Table 1. The six largest banks in Saudi Arabia and the UAE (1985–2015) Notes: (a) Domestic commercial banks only. (b) Emirates Bank International and National Bank of Dubai merged in 2007 to form Emirates-NBD. (c) Al Rajhi received a banking license in 1987, having operated prior to that under a moneychanging license. Sources: Bank annual reports; Habib (1989, pp. 164–167); Al-Hassan et al. (2010, pp. 31–33). View Large 5. Case 2: Pakistan 5.1 The religious field and state power until the mid-1970s: Islamic groups clash with the state over interest Since the mid-20th century, the problem of interest has been more politically charged in Pakistan than anywhere else—for at least three reasons. First, disputes over the place of Islam and shariah in the legal system and in the regulation of public morality have persisted more or less continuously since independence in 1947. Second, intellectual debate about the acceptability of interest in Islam has deep roots. Since the early 20th century, South Asia—first British India, then Pakistan—has been one of the two centers for such debate (Kuran, 1997), alongside Egypt (Tripp, 2006). Third, major segments of the Pakistani population stand in very different socioeconomic and cultural relation to interest. Industrialists and modernizing state bureaucrats view interest-based finance as the lifeblood of a modern economy, but socially conservative religious fractions have overwhelmingly considered interest un-Islamic. Meanwhile, peasants have long suffered under usurious landlords and moneylenders.17 Throughout Pakistan’s independent history, two groups have consistently demanded that the state ban interest. The first is the neotraditionalist ulama: most prominently Deobandi scholars, but also Barelvis and the less numerous Ahl-e-Hadith. In Pakistan, unlike in the Gulf, these ulama have not enjoyed ‘establishment’ status (Shaikh, 2008, p. 596). Instead, some have formed political parties independent of the state, such as the Deobandi Jamīʿat Ulema-e-Islam (JUI)18 and the Barelvi Jamīʿat Ulema-e-Pakistan (JUP). The second group is the neorevivalist Islamists, who had contentious relations with the Pakistani state until 1977. Islamic neorevivalism—sometimes labeled ‘fundamentalism’,19 though problematically—seeks to revitalize Islam through a return to first principles. Neorevivalists are less wedded to classical Islamic sciences than the neotraditionalist ulama. They interpret scripture more freely, often jettisoning traditional exegetical methodologies (Lapidus, 1997). Neorevivalists share the neotraditionalists’ social conservatism on morality and gender roles, but combine it with a forward-looking belief that Islam is ‘the blueprint for a total modern society, an ideological and political alternative to liberalism, socialism or communism’ (Lapidus, 1997, p. 447). They often consider Western influences corrosive. Many of Pakistan’s neorevivalists are also Islamists, meaning they seek an Islamic state that will build a truly Islamic society. Pakistan’s Jamaat-e-Islami (JI), founded in 1941, has always been Pakistan’s dominant neorevivalist Islamist organization, and was one of the world’s two most influential in the 20th century, alongside the Muslim Brotherhood. Its founder and longtime leader, Sayyid Abu al-Aʿlá Mawdūdī (1903–1979), expected the JI to promote the gradual, non-violent Islamization of state and society. The ulama and Mawdūdī both wanted to establish interest-free Islamic finance, but disagreed as to its aim. This lack of shared understandings would make the Pakistani movement for Islamic finance less cohesive than the Gulf movement. Like their counterparts in the Gulf, Pakistan’s ulama opposed interest primarily because they considered it a grave individual sin. Many led prayers in village mosques or taught in rural madrasahs and saw firsthand peasants stuck in debt traps (Ullah, 2013, p. 94). However, they never developed a sophisticated socioeconomic analysis of interest. Mawdūdī, by contrast, sketched an interest-free banking system that would channel surplus wealth toward the common good while serving the financing needs of a modern economy. Islamic banks would use deposits to (a) advance interest-free loans to entrepreneurs, (b) invest in businesses, industrial projects and agricultural projects on a partnership (PLS) basis and (c) circulate cash and bills of exchange through the economy (Mawdudi, 1984, pp. 210–215). Banning interest became a major plank of the JI’s election platform in 1970. Crucially, Mawdūdī considered interest replication an un-Islamic ruse. 5.2 Mobilization (late 1970s to early 1980s): challenge through politics, innovate through economics Between 1977 and 1988, the popular movement for Islamic finance fortuitously gained state support and policymaking influence. In 1977, General Muhammad Zia-ul-Haq toppled Prime Minister Zulfikar Ali Bhutto in a coup. Zia owed his success partly to the neorevivalists: from 1975 to 1977, Mawdūdī had spearheaded a right-wing-populist Islamic opposition coalition that criticized Bhutto’s left-wing populism. The coalition combined religious conservatives, industrialists, shopkeepers, landed gentry and the urban middle classes (Nasr, 1994). It united behind a platform called Nizam-i-Mustafa (‘Order of the Prophet’), which included demands for the elimination of interest. After the army ousted Bhutto, General Zia drew the JI toward him. ‘For the first time in its history, the [JI] had become part of the ruling establishment’ (Nasr, 1994, p. 191). Zia and the JI formulated a top-down plan to Islamize Pakistan’s economy and society. Following Mawdūdī’s vision, Zia proposed to abolish interest, establish Islamic banks, institute PLS schemes, impose the Islamic land tax (ʿushr), mandate zakat for Sunni Muslims and create institutions to study Islamic economics (Kennedy, 1990, p. 63). Pakistan was to become the first modern interest-free country. On the legal front, Zia established shariah courts; criminalized adultery, fornication and blasphemy (though these were hardly ever prosecuted); and instituted Islamic ḥudūd punishments (also rarely imposed). In the schools, Zia’s government revised curricula to incorporate Islamic studies and ordered female students to cover their heads. Pakistan’s neorevivalists also disseminated an intellectual innovation: Islamic economics. While its roots stretch back to the interwar period, especially to Hyderabad (Stephens 2018:160–165), Islamic economics gained traction internationally as an academic discipline in the 1970s and 1980s. It uses tools of liberal economics, such as supply and demand curves, to argue that PLS, zakat and interest-free credit can promote equity and growth. It thus presents Islamic banking as part and parcel of a thorough re-engineering of economy and society. Its pioneers considered usury not only a sin to be ritually avoided, but also a cancer that caused exploitation, inequality and waste (Siddiqi, 1983). Islamic economists spread through Pakistani academia and advised the state on eliminating interest (Kennedy, 2004, p. 102). They gained greater influence on state policy in Pakistan in the 1980s than they have had anywhere before or since. They insisted that a PLS-driven economy is feasible. Zia’s rule gave supporters of financial Islamization powerful organizational resources through which to drive forward their vision (Figure 4). Through the late 1970s and early 1980s, Zia had the Council of Islamic Ideology (CII) submit reports on elimination of interest and the advancement of PLS (Kennedy, 2004, pp. 101–102). JI members received cabinet posts and senior ministry positions (Nasr, 1994, p. 191). Zia also created powerful new Islamic judicial institutions, such as the Federal Shariat Court and the Shariat Appellate Bench of the Supreme Court. Renowned ulama and specialists in Islamic law, most of whom opposed interest, were appointed to the new courts. Figure 4. View largeDownload slide Major Pakistani supporters of financial Islamization (1977–1988). Figure 4. View largeDownload slide Major Pakistani supporters of financial Islamization (1977–1988). 5.3 A field of Islamic finance fails to form (mid-1980s through 1990s): domestic and international obstacles By the early 1980s, prospects for implementing an Islamic financial system in Pakistan looked more favorable than ever. In its 1980 report, the CII declared that interest could and should be eliminated by 1984 (Council of Islamic Ideology, 1980). Zia went to work, converting all interest-bearing savings accounts in state-owned banks into PLS accounts and mandating Islamic windows at their branches. He also directed government agencies to finance through PLS (Janjua, 2003; Kennedy, 2004, p. 102). PLS-based investment funds began trading on the Karachi bourse (Looney, 1996). In practice, however, state-led financial Islamization disappointed the neorevivalists for several reasons. First, it was much less PLS-based than promised. Fearing that PLS could generate moral hazard20 and perturb the financial system too quickly, the state gave banks the option of offering interest-replicating instruments as a stopgap (Council of Islamic Ideology, 1980). Just as in the Gulf, Islamic-banking operations soon tilted heavily toward interest replication. Second, Pakistan’s banks in the 1980s were widely suspected of merely engaging in Islamic financing ‘on paper’, and credibility suffered (M. S. Mufti, interview with author, October 25, 2016). Third, the Pakistani state was itself deeply embedded in interest-based debt markets at the national and international level. This frustrated financial Islamization domestically. Habib Ahmed, an Islamic economist at Durham University, described the problem: Building an Islamic financial system is hard. You’re like a gear trying to turn in one direction while the rest of the world economy is turning in the opposite direction. (Interview with author, July 4, 2013) Ultimately, shared understandings about Islamic finance failed to materialize in Pakistan because supporters of financial Islamization held inconsistent understandings of financial piety and sent unclear signals to the public. The neorevivalists still considered interest replication ‘a disguised form of interest payment’, and many Pakistani ulama agreed (Evans, 1986). The CII, which advised the state, claimed to support PLS but offered ways to sidestep it. Zia himself issued befuddling statements, saying markup-based interest replication is not immoral, but ‘markup on the markup’ is (Evans, 1986). Customers grew confused and disillusioned. Many initially thought Islamic banking meant 0% financing, and were disappointed to learn otherwise (A. A. Siddiqui, conversation with author, October 24, 2016). Banks generally opposed Islamic finance, for it added costs, time and hassle—without offering competitive advantage, since all banks were required to offer it. As one Pakistani economist lamented in 1986, Islamic finance in Pakistan was ‘a muddle’ (Evans, 1986). From the late 1980s through the 1990s, financial Islamization foundered in an increasingly inhospitable domestic and international context. In 1988, Zia died in a plane crash, so the project lost its powerful patron. From 1988 to 1999, the prime ministership flipped back and forth between Benazir Bhutto and her rival Nawaz Sharif, with caretaker governments in between. Bhutto opposed Zia’s Islamization program, but did not eliminate it (Kennedy, 2004, p. 108). Sharif had supported Islamization. However, in the neoliberal 1990s, as IMF and foreign creditors pressured Pakistan to privatize and liberalize its financial sector (Gargan, 1992; Kennedy, 2004, pp. 107 and 108; Warde, 2010, p. 117), Sharif could hardly advocate a PLS-based financial system. Ultimately, the Pakistani movement for Islamic finance could not buck the neoliberal financial order and its dominant institutions. It could not impose its own rules of the game, even at home. 5.4 Contention and crisis (1990s–2002): the Islamists go down with a fight in the courts Despite facing a hostile international milieu, the Pakistani movement for financial Islamization retained enough momentum and high-placed allies to threaten the stability of the domestic economic field. Although Zia was dead, supporters of financial Islamization remained in the courts. Unlike in the Gulf, where state judicial fields are fully subordinate to the powerful monarchies, the Pakistani judiciary was in the 1990s starting to stand up to the executive and the military (Kennedy, 2012, p. 141). The growing autonomy of the Pakistani judicial field after Zia allowed financial Islamization to remain a hot public issue. In 1991, the chief justice of the Federal Shariat Court21 announced that his court would hear challenges to the banking laws that blocked further financial Islamization. In 1991, the Court ruled not only that shariah prohibited all interest, but also that ‘if the banking system is to be Islamised, “mark-up” [i.e. interest replication] is no solution’22. The neorevivalists were overjoyed. ‘Our economy will be more prosperous’, exulted Qazi Hussain Ahmad, the JI’s leader. ‘We will be rid of corrupt people who take loans and who burden the national exchequer’ (Gargan, 1992). Neorevivalists in the courts now looked able and willing to throw Pakistan’s banking system into chaos. The world took notice, including The New York Times in 1992: Efforts by Prime Minister Nawaz Sharif to steer Pakistan's economy away from state planning and toward free markets and privatization are being threatened by Islamic fundamentalism … Already, several of the country's largest public works projects, financed by foreign lending, are in jeopardy. A $1.45 billion hydroelectric dam being built on the Hab River has been stalled, and a $980 million superhighway being built by the South Koreans is in danger. (Gargan, 1992) If the court ruling were carried out, ‘the whole financial system … will collapse’, warned Pakistan’s minister of state for economic affairs. In response, Nawaz Sharif quietly ‘encouraged’ a state-owned bank to appeal the ruling. However, the appeal sat unheard for 5 years (Kennedy, 2004, pp. 107–108). Pakistan’s economic elites considered the neorevivalists’ PLS-based vision lunacy. Most business leaders, the military (itself heavily involved in business and real estate) and the civil service opposed financial Islamization of any kind (Kennedy, 2004, p. 108). The Ministry of Finance argued that ending interest would hurt the poor (Metcalf, 2015 (1987)). In a state now wedded to a neoliberal financial model and structural adjustment, the absence of economic elites in a transformative project proved damaging. A full-blown judicial crisis began in 1999, when the Shariat Appellate Bench of the Supreme Court—another Zia-established institution—ruled that the state had to eliminate interest within 2 years. It dismissed appeals by Pakistan’s biggest banks23 and objections from the Ministry of Finance and the central bank (Janjua, 2004, pp. 861–866). It also mandated PLS, effectively declaring that banks must cease to be banks and become like venture-capital funds instead (Khan, 2015, pp. 120 and 121). It took a military ruler to quash the crisis over interest. In a 1999 coup, General Pervez Musharraf ousted Nawaz Sharif. In 2001, Musharraf’s government challenged the Shariat Appellate Bench’s ruling (Khan, 2015, p. 121). The court confirmed its initial ruling, but in 2002, Musharraf sacked Justice Taqi Usmani—a fervent opponent of interest—from the court and packed it with judges of his choosing. He also gave the remaining justices a 30% raise (Khan, 2015, pp. 122 and 123). The court proceeded to vitiate its own 1999 ruling, and Pakistan’s economic elites breathed a sigh of relief. In the end, the Pakistani movement for revolutionary financial Islamization failed both because it clashed with powerful interests and norms in the global field of finance and because it allied with a state whose support proved fickle. In the Gulf, the same royal families have ruled since independence, but Pakistan has had 18 prime ministers since independence, and frequent shifts from military to civilian rule. Leaders’ positions on Islam’s role in the economy have fluctuated too. Linked to such an unstable field of state power, the movement for financial Islamization foundered. 5.5 Settlement and field emergence (2002 to present): Pakistan imports the Gulf model Musharraf’s government did not kill off Islamic finance in Pakistan; it pressed ‘reset’ instead (Warde, 2010, p. 118). The state liberalized Islamic finance and aligned it with the interests of domestic and international capital. By now, the Gulf model of Islamic finance had become the global model, and the Pakistani state adopted it. A proximate field thus provided a tried-and-trusted model for settlement (Fligstein and McAdam, 2012, pp. 22 and 23) through country-level demonstration effects (Bendix, 1984, pp. 108–122). Instead of forcibly converting all banks into Islamic banks, the government would now license and regulate Islamic banks alongside conventional banks. Customers would choose freely between the two. Conventional banks would also be allowed to open Islamic branches and subsidiaries. Shariah boards would certify Islamic products. And while the central bank pledged to support a gradual long-term shift toward PLS, interest-replication practices such as murābaḥah financing would remain perfectly legal (Janjua, 2004). Three trends favored the neoliberal reset. The first was structural adjustment, which began in 1988. Further financial Islamization was incompatible with the framework the IMF and World Bank had imposed for government debt auctions (Meenai and Ansari, 2001, p. 183). These auctions were vital to the government’s solvency. The second was interaction between Pakistan’s central bank and the growing global field of neoliberal Islamic finance. Led by Ishrat Husain,24 a US-trained economist and former senior World Bank officer, Pakistan’s central bank sent delegations to meet with regulators, Islamic bankers and neotraditionalist ulama around the world in 2000 and 2001 to understand how neoliberal Islamic finance operates. Upon return, the delegations recommended that Islamic banking be developed as a parallel system alongside conventional banking, and asserted that a PLS-based financial system presented major uncertainties (M. S. Mufti, personal communication, October 26, 2016). ‘We considered it totally imprudent to dislocate the entire financial system’, recalls Husain. ‘We believed that the choice should be left to the individual consumer’ (Husain, 2005). Third, the JI’s interpretation of Islam as a blueprint for a state-led socioeconomic system was losing its audience. The JI itself was losing steam: its popularity had peaked in the 1970s, and its democratic credentials suffered through the 1980s as its main faction continued to back the autocratic Zia (Nasr, 1994, pp. 192–199). By the 1990s, ethnic parties such as the MQM were more popular (Haq, 1995). Moreover, the JI lost its distinctiveness. Since the 1980s, all major parties have infused their platforms with Islamic discourse. Meanwhile, militant Islamist organizations have stolen the JI’s thunder in demanding the Islamization of society, but elevate identity politics over economic justice. Gulf-style Islamic banking is succeeding in Pakistan. Since Pakistan adopted the Gulf model in 2002, Islamic banking’s market share has grown steadily from 0.5% of assets in 2003 to 11.7% in 2016 (Figure 5). Figure 5. View largeDownload slide Islamic banking’s market share in Pakistan (2003–2016). Sources: State Bank of Pakistan (Islamic Banking Bulletin, 2010–2017). Figure 5. View largeDownload slide Islamic banking’s market share in Pakistan (2003–2016). Sources: State Bank of Pakistan (Islamic Banking Bulletin, 2010–2017). As challengers, purely Islamic banks have broken into the banking field’s middle tier. Pakistan’s first and largest purely Islamic commercial bank, Meezan Bank, began operations in 2002; as of 2018, Pakistan had four purely Islamic banks. Meezan ranked #8 in total assets among Pakistani banks in 2016.25 Collectively, assets at Pakistan’s purely Islamic banks mushroomed at a rate of 38.4% per year between 2006 and 2012 (State Bank of Pakistan, 2006–2017). However, just as in the Gulf, Pakistan’s dominant incumbent banks have weathered the challenge by opening Islamic windows, branches and subsidiaries, as Table 2 shows. Ironically, these were the same incumbents that sued to stop financial Islamization in the 1990s.26 Table 2. The six largest banks in Pakistan (1985–2015) Notes: Scheduled domestic commercial banks only. In 1985, Pakistan only had five such banks. Sources: Bank annual reports; Paxton (1985, p. 953). View Large Table 2. The six largest banks in Pakistan (1985–2015) Notes: Scheduled domestic commercial banks only. In 1985, Pakistan only had five such banks. Sources: Bank annual reports; Paxton (1985, p. 953). View Large Pakistan’s Islamic banks have stabilized the post-2002 field of neoliberal Gulf-style Islamic finance by integrating famous neotraditionalist ulama into their IGUs. Of the five justices on the Shariat Appellate Bench who ruled in Khaki v. Hashim27 that the state must eliminate interest immediately and institute PLS, three went on to chair major shariah boards.28 Justice M. Taqi Usmani in particular has become the face of Islamic finance in Pakistan, and one of the most sought-after shariah-board members worldwide. His ‘brand’ has earned many millions of dollars for Pakistan’s largest Islamic bank, whose shariah board he chairs (Informant C,29 interview with author, April 2017). 6. Conclusion Why, between the mid-1970s and early 2000s, did Islamic finance become durably entrenched and commercially successful in the Arab Gulf states but not in Pakistan? My answer centers on the importance of constructing a stable field that reconciles religious beliefs with market imperatives. I argue that the institutionalization of Islamic finance in the late 20th century required (a) a stable coalition among religious authorities, market actors and the state that (b) shared basic understandings of religio-economic virtue and of the project’s purpose. Shared understandings allowed Gulf Islamic finance to form a field of its own by the 1980s. Ultimately, however, to grow internationally, the field’s shared understandings also had to be (c) compatible with the neoliberal financial order. In the Gulf, an elite social movement for Islamic finance emerged in the 1970s. Its leaders, the pious millionaire entrepreneurs, built a shariah-compliant alternative to interest-based finance. They formed a stable coalition with neotraditionalist ulama and enjoyed acceptance from the region’s patrimonial dynasts. By the early 1980s, the entrepreneurs, ulama, and state leaders agreed on the purpose, rules, governance and boundaries of the field of Islamic finance. Neotraditionalist ulama became certification agents of shariah compliance. The state neither forced Islamic finance on its citizens nor banned it, letting customers vote with their feet. Coalition partners conceived of usury primarily as an individual sin, and shariah boards permitted certain interest-replication techniques. Islamic banks therefore managed to construct interest-free analogs of familiar interest-based products. These proved so successful that many domestic conventional banks embraced Islamic finance, as did some Western multinational banks and global financial governance institutions. Islamic finance has merged smoothly into the national and global fields of capitalist finance. In Pakistan, a popular social movement—the neorevivalist Islamists, led by the JI—demanded that the state impose interest-free finance on the population. The JI saw interest not only as individual sin, but also as an obstacle to a just, modern Islamic socioeconomic system. General Zia-ul-Haq and Pakistan’s neotraditionalist ulama supported financial Islamization too. By the early 1980s, financial Islamization looked imminent. Yet by 2002, it had failed. The movement supporting it proved unstable as the political field lurched between praetorian and civilian rule. The movement also lacked shared understandings: the JI and its Islamic economists believed Islamic finance should be socioeconomically transformative and mostly PLS-based, whereas some ulama accepted interest replication. The state itself wavered. Moreover, the transformational vision alienated Pakistan’s economic elites and threatened structural adjustment and Pakistan’s participation in international debt markets. Given their country’s peripheral position in the world-economy, Pakistanis could not rewrite the rules of Pakistan’s financial game. Some might object that the failure of revolutionary financial Islamization in Pakistan teaches us little. According to this logic, it goes without saying that a religio-economic project based on an anti-liberal understanding of economic piety would fail amid the neoliberal financial order. And without a gap between expected outcome and theoretical explanation, the analytical leverage of a negative case disappears (Emigh, 1997). In fact, however, the negative case of Pakistan is important precisely because it highlights the unique persistence and power of the neoliberal financial order. Consider three points. First, the failure of radical systemic financial re-engineering only seems overdetermined in hindsight. As late as 1992, even The New York Times considered comprehensive financial Islamization a real possibility (Gargan, 1992). Second, the same movement that failed to Islamize Pakistan’s financial system succeeded in Islamizing Pakistan’s education and justice systems. In those arenas, the reforms of the late 1970s and 1980s persist: national curricula still incorporate religious studies, madrasahs continue to grow in number and government shariah courts remain thoroughly institutionalized. Third, sweeping utopian state-led projects to re-engineer politics, law and public morality in the name of religion have achieved dramatic effects elsewhere, such as Iran and increasingly India. But utopian Islamic projects that buck the neoliberal financial order have failed—in Pakistan, and simultaneously in Iran (Nomani and Rahnema, 1994, pp. 160–186). The Pakistani case therefore shows how the neoliberal financial order forestalls and straitjackets alternative financial possibilities. The story of Islamic finance suggests that we revisit the classic question of how economic imperatives come to be reconciled (or not) with existential motivations and anxieties under particular historical conditions (Weber, 1978 (1922), pp. 576–589, 611–634, and 1183–1204; Weber, 2002 (1905)). In the Gulf and Pakistan, movements have mobilized faith, anxieties about sin and socioeconomic utopianism to reconfigure the social worlds of markets. As religion and capitalism evolve, new clashes and compromises between their value orientations will keep bubbling and bursting into view, inviting our investigation. Acknowledgements I thank Nina Aron, Kent Calder, Neil Fligstein, Mark Gould, Elise Herrala, Srdjan Smajić, Jakub Wrzesniewski, and the anonymous reviewers for their helpful comments, and Nasir Razak, IBA-CEIF Karachi and Meezan Bank for facilitating this research. Funding This work was supported by the Johns Hopkins Exploration of Practical Ethics program. Footnotes 1 As measured by total assets. Source: Central banks’ annual reports; Qatar National Bank (2003). 2 Author estimate based on Standard,and,Poor’s (2016), Thomson Reuters (2016), AlHuda CIBE (in Rosli, 2017) and IFSB (2016). All calculations are available upon request. 3 Author estimate based on IMF (2016, p. 88), Brandmeir et al. (2016), Sanyal (2015), Ro (2015) and World Gold Council (2014). 4 Peifer (2011) is an important exception. 5 By ‘religio-economic projects’, I mean efforts to design and build modern economic institutions explicitly regulated by religious rules, principles or values. 6 Naturally, religious logics do not necessarily clash with profit-seeking and calculative rationality; Muslim thinkers through the ages have often justified both using an Islamic ethical vocabulary (Rodinson, 1974; Ghazanfar, 1991). But as this article shows, religio-economic projects often appeal to the belief that religious virtue can reform or constrain problematic economic arrangements. 7 It excludes Oman, the other member of the Gulf Cooperation Council. The Omani government banned Islamic finance until 2011. 8 Includes money. 9 Prince Muhammad bin Faisal Al Saud, Saleh Kamel, Sulayman Al Rajhi and Saeed bin Ahmad Al Lootah. 10 a.k.a. ‘shariah supervisory board’. 11 I use the term ‘replication’ only in an economic sense, not in a spiritual sense. An Islamic banker might object that calling a shariah-compliant auto financing a ‘replication’ of an interest-bearing auto loan is like calling beef bacon a ‘replication’ of pork bacon. 12 Thus, what I am calling ‘murābaḥah financing’ (as per industry convention) actually combines a markup sale (murābaḥah) with a credit sale (bayʿ mu ʾajjal). 13 Informant B has worked for over 25 years in Islamic finance, including as a senior executive at two of the five largest Islamic banks in the Gulf, interacting regularly with shariah-board members. 14 Including Bank AlJazira (Saudi Arabia; converted 1998–2002), National Bank of Sharjah (UAE; converted into Sharjah Islamic Bank in 2002), Dubai Bank (UAE; converted 2006–2008) and Ahli United Bank (Kuwait, converted 2010). 15 National Commercial Bank (Saudi Arabia, announced conversion process in 2014). 16 Kuwait, Qatar and Bahrain likewise show little change among incumbent banks, a spread of Islamic offerings and the rise of Islamic banks in their top six. 17 In 1964, The Wall Street Journal reported: ‘it’s estimated that 90% of present farm financing in Pakistan is done by moneylenders who charge interest rates exceeding 50% annually’ (Keatley, 1964). 18 Now split. 19 Nagata (2001) discusses why the term ‘Islamic fundamentalism’ is problematic. 20 By increasing the risk appetite of the receiver of capital and opening possibilities for fraud. 21 Tanzil-ur-Rehman. 22 Mahmood-ur-Rahman Faisal v. Secretary, Ministry of Law and others (1992), 44 PLD 1, Federal Shariat Court (Pakistan), paragraph 255. 23 Including Allied Bank, UBL, MCB, NBP, HBL and ABN AMRO. 24 The Banker named Husain ‘central banker of the year in Asia’ (The Banker, 2005). 25 Source: bank annual reports. 26 Summit Bank and Faysal Bank (Russell-Walling, 2014). 27 PLD 2000 SC 225, Supreme Court (Pakistan), Shariat Appellate Bench. 28 Justice M. Taqi Usmani chairs Meezan Bank’s shariah board, Justice Khalil-ur-Rehman chairs Al Baraka Pakistan’s and Justice Mahmood Ghazi chaired the State Bank of Pakistan’s from 2003 to 2011. 29 Informant C worked at this bank for many years. References Al-Hassan A. , Khamis M. , Oulidi N. ( 2010 ) The GCC banking sector: Topography and analysis . IMF Working Paper WP/10/87. Washington, DC , International Monetary Fund . Al-Rasheed M. ( 2007 ) Contesting the Saudi State: Islamic Voices from a New Generation , Cambridge , Cambridge University Press . al-Ṣadr M. B. ( 1969 /1970) Al-Bank al-lā-Ribawī fī al-Islam , Kuwait City, Kuwait , Maktabat Jāmi‘ al-Naqī al-‘Āmmah . Anderson M. ( 2015 ) A History of Fair Trade in Contemporary Britain: From Civil Society Campaigns to Corporate Compliance , London , Palgrave Macmillan . Asutay M. ( 2012 ) ‘ Conceptualising and Locating the Social Failure of Islamic Finance: Aspirations of Islamic Moral Economy vs. the Realities of Islamic Finance ’, Asian and African Area Studies , 11 , 93 – 113 . Bartley T. ( 2011 ) ‘Certification as a Mode of Social Regulation’. In Levi-Faur D. (ed) Handbook on the Politics of Regulation , Cheltenham , Edward Elgar , pp. 441 – 452 . Bartley T. , Child C. ( 2014 ) ‘ Shaming the Corporation ’, American Sociological Review , 79 , 653 – 679 . Google Scholar Crossref Search ADS Battilana J. , Besharov M. , Mitzinneck B. ( 2017 ) ‘On Hybrids and Hybrid Organizing: A Review and Roadmap for Future Research’. In Greenwood R. , Oliver C., , Lawrence T. B. , Meyer R. E. (eds) The SAGE Handbook of Organizational Institutionalism , London , Sage , pp. 133 – 169 . Bendix R. ( 1984 ) Force, Fate, and Freedom: On Historical Sociology , Berkeley , University of California Press . bin Bāz, ʿAbd al-ʿAzīz bin ʿAbd Allāh (n.d.) Majmūʿ Fatāwá wa Maqālāt Mutanawwiʿah (al-Juzʾ al-Awwal) , Riyadh , Idārat al-buḥūth al-ʿilmīyah wa-l-ift āʾ. Boone C. , Özcan S. ( 2016 ) ‘ Ideological Purity vs. Hybridization Trade-off: When Do Islamic Banks Hire Managers from Conventional Banking? ’, Organization Science , 27 , 1380 – 1396 . Google Scholar Crossref Search ADS Bourdieu P. ( 1984 ) Distinction: A Social Critique of the Judgement of Taste , London , Routledge . Brandmeir K. et al. ( 2016 ) Allianz Global Wealth Report 2016, Munich, Allianz SE. Brown C. ( 2017 ) Buddhist Economics: An Enlightened Approach to the Dismal Science , New York , Bloomsbury . Brown N. ( 2017 ) Official Islam in the Arab World: The Contest for Religious Authority , Washington, DC , Carnegie Endowment for International Peace . Bullinger B. , Kieser A. , Schiller-Merkens S. ( 2015 ) ‘ Coping with Institutional Complexity: Responses of Management Scholars to Competing Logics in the Field of Management Studies ’, Scandinavian Journal of Management , 31 , 437 – 450 . Google Scholar Crossref Search ADS Calder R. ( 2016 ) ‘ God’s Technicians: Religious Jurists and the Usury Ban in Judaism, Christianity, and Islam ’, European Journal of Sociology , 57 , 207 – 257 . Google Scholar Crossref Search ADS Chandler A. D. ( 1993 ) The Visible Hand: The Managerial Revolution in American Business , Cambridge, MA , Harvard University Press . Council of Islamic Ideology ( 1980 ), Report on the Elimination of Interest from the Economy, Islamabad, Council of Islamic Ideology. Crair B. ( 2018 , March 15) ‘This Multibillion-Dollar Corporation Is Controlled by a Penniless Yoga Superstar’, Bloomberg Businessweek, accessed at https://www.bloomberg.com/news/features/2018-03-15/this-multibillion-dollar-corporation-is-controlled-by-a-penniless-yoga-superstar on October 15, 2018. Emigh R. J. ( 1997 ) ‘ The Power of Negative Thinking: The Use of Negative Case Methodology in the Development of Sociological Theory ’, Theory and Society , 26 , 649 – 684 . Google Scholar Crossref Search ADS Evans R. ( 1986 , March 13) ‘Pakistan’s Interest-Free-Banking Law Is Still Adjusting to the Profit Motive’, Christian Science Monitor , Boston, MA . EY ( 2017 ) Banking in Emerging Markets: GCC FinTech Play 2017, Dubai, EY MENA Practice. Eyal G. ( 2013 ) ‘ For a Sociology of Expertise: The Social Origins of the Autism Epidemic ’, American Journal of Sociology , 118 , 863 – 907 . Google Scholar Crossref Search ADS Fischer J. ( 2016 ) ‘ Markets, Religion, Regulation: Kosher, Halal and Hindu Vegetarianism in Global Perspective ’, Geoforum , 69 , 67 – 70 . Google Scholar Crossref Search ADS Fishman A. ( 1983 ) ‘ Judaism and Modernization: The Case of the Religious Kibbutzim ’, Social Forces , 62 , 9 – 31 . Google Scholar Crossref Search ADS Fligstein N. , McAdam D. ( 2012 ) A Theory of Fields , Oxford , Oxford University Press . Fligstein N. ( 2001 ) The Architecture of Markets: An Economic Sociology of Twenty-First-Century Capitalist Societies , Princeton , Princeton University Press . Fourcade M. ( 2011 ) ‘ Cents and Sensibility: Economic Valuation and the Nature of “Nature” ’, American Journal of Sociology , 116 , 1721 – 1777 . Google Scholar Crossref Search ADS Freer C. ( 2018 ) Rentier Islamism: The Influence of the Muslim Brotherhood in Gulf Monarchies , Oxford , Oxford University Press . Friedland R. , Alford R. R. ( 1991 ) ‘Bringing Society Back In: Symbols, Practices and Institutional Contradictions’. In Powell W. W. , DiMaggio P. J. (eds) The New Institutionalism in Organizational Analysis , Chicago , University of Chicago Press , pp. 232 – 263 . Gargan E. A. ( 1992 , February 23) ‘Islam Challenges Pakistan Economy’, The New York Times , New York, NY . Ghazanfar S. M. ( 1991 ) ‘ Scholastic Economics and Arab Scholars: The “Great Gap” Thesis Reconsidered ’, Diogenes , 39 , 117 – 140 . Google Scholar Crossref Search ADS Hanieh A. ( 2011 ) Capitalism and Class in the Gulf Arab States , New York , Palgrave Macmillan . Habib G. M. ( 1989 ) ‘A Note on the Banking Industry’. In Kassem, M. S. and Habib, Ghazi M. (eds) Strategic Management of Services in the Arab Gulf States, Berlin, De Gruyter, pp. 155–176. Haq F. ( 1995 ) ‘ Rise of the MQM in Pakistan: Politics of Ethnic Mobilization ’, Asian Survey , 35 , 990 – 1004 . Google Scholar Crossref Search ADS Harris K. ( 2017 ) A Social Revolution: Politics and the Welfare State in Iran , Berkeley , University of California Press . Hatina M. ( 2009 ) ‘The Clerics’ Betrayal? Islamists, ʿUlamaʾ and the Polity’. In Hatina M. (ed) Guardians of Faith in Modern Times: ʿUlamaʾ in the Middle East , Leiden , Brill , pp. 247 – 264 . Healy K. ( 2006 ) Last Best Gifts: Altruism and the Market for Human Blood and Organs , Chicago , University of Chicago Press . Hertog S. ( 2010 ) ‘ The Sociology of the Gulf Rentier Systems: Societies of Intermediaries ’, Comparative Studies in Society and History , 52 , 282 – 318 . Google Scholar Crossref Search ADS Hsu G. , Negro G. , Perretti F. ( 2012 ) ‘ Hybrids in Hollywood: A Study of the Production and Performance of Genre-Spanning Films ’, Industrial and Corporate Change , 21 , 1427 – 1450 . Google Scholar Crossref Search ADS Husain I. ( 2005 ) ‘Islamic Financial Services Industry: The European Challenges’ , Keynote Address at Islamic Financial Services Forum, Luxembourg , November 8, 2005. IFSB ( 2016 ) Islamic Financial Services Industry Stability Report 2016, Kuala Lumpur, Islamic Financial Services Board. IMF ( 2016 ) Global Financial Stability Report: Potent Policies for a Successful Normalization , Washington, DC , International Monetary Fund . IMF ( 2018 , May 24) ‘IMF Executive Board Adopts Decisions to Formally Recognize the Core Principles for Islamic Finance Regulation (CPIFR) for Banking’, IMF Press Release No. 18/193, accessed at https://www.imf.org/en/News/Articles/2018/05/24/pr18193imf-adopts-decisions-to-the-cpifr-for-banking on October 15, 2018. Janjua M. A. ( 2003 ) History of the State Bank of Pakistan, 1977–1988 , Karachi , State Bank Printing Press . Janjua M. A. ( 2004 ) History of the State Bank of Pakistan, 1988–2003 , Karachi , State Bank Printing Press . Kahf M. ( 2004 ) ‘Islamic Banks: The Rise of a New Power Alliance of Wealth and Shari'a Scholarship’. In Henry C. , Wilson R. (eds) The Politics of Islamic Finance , Edinburgh , Edinburgh University Press , pp. 17 – 36 . Keatley R. ( 1964 , August 12) ‘Moslem Traditionalists in Pakistan Push for Interest-Free Banking’, Wall Street Journal , New York, NY . Kennedy C. H. ( 1990 ) ‘ Islamization and Legal Reform in Pakistan, 1979-1989 ’, Pacific Affairs , 63 , 62 – 77 . Google Scholar Crossref Search ADS Kennedy C. H. ( 2004 ) ‘Pakistan’s Superior Courts and the Prohibition of Riba’. In Hathaway R. M. , Lee W. (eds) Islamization and the Pakistani Economy , Washington, DC , Woodrow Wilson International Center for Scholars , pp. 101 – 117 . Kennedy C. H. ( 2012 ) ‘The Judicialization of Politics in Pakistan’. In Dressel B. (ed.) The Judicialization of Politics in Asia , Abingdon, Oxon : Routledge , pp. 139 – 160 . Khan F. ( 2015 ) Islamic Banking in Pakistan: Shariah-Compliant Banking and the Quest to Make Pakistan More Islamic , London , Routledge . Kraatz M. S. , Block E. S. ( 2008 ) ‘Organizational Implications of Institutional Pluralism’. In Greenwood R. , Oliver C. , Sahlin K. , Suddaby R. (eds) The Sage Handbook of Organizational Institutionalism , London , Sage , pp. 243 – 275 . Kuran T. ( 1997 ) ‘ The Genesis of Islamic Economics: A Chapter in the Politics of Muslim Identity ’, Social Research , 64 , 301 – 338 . Lapidus I. M. ( 1997 ) ‘ Islamic Revival and Modernity: The Contemporary Movements and the Historical Paradigms ’, Journal of the Economic and Social History of the Orient , 40 , 444 – 460 . Google Scholar Crossref Search ADS Looney R. E. ( 1996 ) ‘ Financial Innovation in an Islamic Setting: The Case of Pakistan ’, Journal of South Asian and Middle Eastern Studies , 19 , 1 – 30 . Martin J. L. ( 2003 ) ‘ What Is Field Theory? ’, American Journal of Sociology , 109 , 1 – 49 . Google Scholar Crossref Search ADS Mawdudi A. , Ahmad K. (ed.) and Husain R. (trans.) ( 1984 ) Economic System of Islam , Lahore , Islamic Publications . McAdam D. ( 2003 ) ‘Beyond Structural Analysis: Toward a More Dynamic Understanding of Social Movements’. In Diani M. , McAdam D. (eds) Social Movements and Networks: Relational Approaches to Collective Action , Oxford , Oxford University Press , pp. 281 – 298 . Meenai S. A. , Ansari J. A. ( 2001 ) Money and Banking in Pakistan , Oxford , Oxford University Press . Metcalf B. D. (2015 ( 1987 )) ‘Islamic Arguments in Contemporary Pakistan’. In Roff W. (ed.) Islam and the Political Economy of Meaning: Comparative Studies of Muslim Discourse , Abingdon, Oxon , Routledge , pp. 132 – 159 . Muslim World League Islamic Fiqh Council ( 2007 ) ‘Report of the Committee Assigned to Draft the Resolution of the Islamic Fiqh Council on Insurance (First Session, 1398 AH/1978 CE)’. In Resolutions of the Islamic Fiqh Council (Makkah Mukarramah): From 1st to 18th Sessions , Mecca, Saudi Arabia , Muslim World League , pp. 44 – 54 . Nagaoka S. ( 2007 ) ‘ Beyond the Theoretical Dichotomy in Islamic Finance: Analytical Reflections on Murabahah Contracts and Islamic Debt Securities ’, Kyoto Bulletin of Islamic Area Studies , 1 , 72 – 91 . Nagata J. ( 2001 ) ‘ Beyond Theology: Toward an Anthropology of “Fundamentalism” ’, American Anthropologist , 103 , 481 – 498 . Google Scholar Crossref Search ADS Nasr S. V. R. ( 1994 ) The Vanguard of the Islamic Revolution: The Jama‘at-i Islami of Pakistan , Berkeley, CA , University of California Press . Nomani F. , Rahnema A. ( 1994 ) Islamic Economic Systems , London , Zed Books . Paracha N. F. ( 2015 , January 1) ‘ Abul Ala Maududi: An Existentialist History ’, Dawn , Karachi . Paxton John (ed.) ( 1985 ) The Statesman's Year–Book, 1985–1986, London, Macmillan. Paxton John (ed.) ( 1987 ) The Statesman's Year–Book, 1987–1988, London, Macmillan. Peifer J. L. ( 2011 ) ‘ Morality in the Financial Market? A Look at Religiously Affiliated Mutual Funds in the USA ’, Socio-Economic Review , 9 , 235 – 259 . Google Scholar Crossref Search ADS Presley J. R. (ed.) ( 1988 ) Directory of Islamic Financial Institutions, London, Croom Helm. Prokop M. ( 2003 ) ‘ Saudi Arabia: The Politics of Education ’, International Affairs , 79 , 77 – 89 . Google Scholar Crossref Search ADS Qatar National Bank ( 2003 ) Qatar: Facts and Figures 2003, Doha, Qatar National Bank. Quinn S. ( 2008 ) ‘ The Transformation of Morals in Markets: Death, Benefits, and the Exchange of Life Insurance Policies ’, American Journal of Sociology , 114 , 738 – 780 . Google Scholar Crossref Search ADS Ro S. ( 2015 ) ‘Here’s What the $294 Trillion Market of Global Financial Assets Looks Like’, Business Insider, accessed at https://www.businessinsider.com/global-financial-assets-2015-2 on April 16, 2019. Rodinson M. ( 1974 ) Islam and Capitalism , London , Allen Jane . Rosli L. ( 2017 , January 2) ‘Islamic Finance: Total Industry Volume Set to Hit US$2.7tril by Year-End’, New Straits Times , Kuala Lumpur, Malaysia . Russell-Walling E. ( 2014 , March 11) ‘Has Islamic Banking Finally Cracked Pakistan?’, The Banker , London . Sanyal S. ( 2015 ) Mapping the World’s Financial Markets 2015 , Hong Kong , Deutsche Bank Research . Schneiberg M. ( 2007 ) ‘ What’s on the Path? Path Dependence, Organizational Diversity and the Problem of Institutional Change in the US Economy, 1900–1950 ’, Socio-Economic Review , 5 , 47 – 80 . Google Scholar Crossref Search ADS Scott J. C. ( 1976 ) The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia , New Haven , Yale University Press . Shaikh F. ( 2008 ) ‘ From Islamisation to Shariatisation: Cultural Transnationalism in Pakistan ’, Third World Quarterly , 29 , 593 – 609 . Google Scholar Crossref Search ADS Siddiqi M. N. ( 1983 ) Banking without Interest , Leicester, England , Islamic Foundation . Standard and Poor’s ( 2016 ) Islamic Finance Outlook : 2017 Edition, New York, NY , S&P . State Bank of Pakistan ( 2006 –2017) Islamic Banking Bulletin (Quarterly Report), Karachi , State Bank of Pakistan . Stephens J. ( 2018 ) Governing Islam: Law, Empire, and Secularism in Modern South Asia, Cambridge, Cambridge University Press. The Banker (January 2005 ) ‘ Central Banker of the Year: Asia ’, The Banker , 155 ( 947 ), London, p. 31 . Thompson E. P. ( 1971 ) ‘ The Moral Economy of the English Crowd in the Eighteenth Century ’, Past & Present , 76 – 136 . Thomson Reuters ( 2016 ) State of the Global Islamic Economy Report 2016/17 , New York/Dubai , Thomson Reuters . Tripp C. ( 2006 ) Islam and the Moral Economy: The Challenge of Capitalism , Cambridge , Cambridge University Press . Ullah H. K. ( 2013 ) Vying for Allah’s Vote: Understanding Islamic Parties, Political Violence, and Extremism in Pakistan , Washington, DC , Georgetown University Press . Vinod H. (ed.) ( 2012 ) The Oxford Handbook of Hindu Economics and Business , Oxford , Oxford University Press . von Pock A. ( 2007 ) Strategic Management in Islamic Finance, Frankfurt, Deutscher Universitäts–Verlag. Warde I. ( 2010 ) Islamic Finance in the Global Economy , 2 nd edn, Edinburgh , Edinburgh University Press . Weber M. (1978 ( 1922 )), Economy and Society: An Outline of Interpretive Sociology , Berkeley , California, University of California Press . Weber M. (2002 ( 1905 )) The Protestant Ethic and the Spirit of Capitalism and Other Writings , New York , Penguin Classics . White H. C. ( 2002 ) Markets from Networks: Socioeconomic Models of Production , Princeton , Princeton University Press . Wilson R. ( 2002 ) ‘The Evolution of the Islamic Financial System’. In Archer S. , Abdel Karim R. A. (eds) Islamic Finance: Innovation and Growth , London , Euromoney Books and AAOIFI . Wilson R. ( 1983 ) Banking and Finance in the Arab Middle East , London , Macmillan Press . World Gold Council ( 2014 ) Gold Investor, Volume 5: Risk Management and Capital Preservation , London , World Gold Council . Zelizer V. A. ( 1979 ) Morals and Markets: The Development of Life Insurance in the United States , New York , Columbia University Press . © The Author(s) 2019. Published by Oxford University Press and the Society for the Advancement of Socio-Economics. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)
TI - How religio-economic projects succeed and fail: the field dynamics of Islamic finance in the Arab Gulf states and Pakistan, 1975–2018
JF - Socio-Economic Review
DO - 10.1093/ser/mwz015
DA - 2019-01-01
UR - https://www.deepdyve.com/lp/oxford-university-press/how-religio-economic-projects-succeed-and-fail-the-field-dynamics-of-XiCydUTDKh
SP - 167
VL - 17
IS - 1
DP - DeepDyve
ER -