FROM FIQH TO POLICY INSTRUMENT: THE LEGAL TRANSFORMATION OF ISLAMIC ECONOMIC PRINCIPLES

Omar Al-Fahim (1), Fatima Al-Mazrouei (2), Sarah Williams (3)
(1) United Arab Emirates University, United Arab Emirates,
(2) United Arab Emirates University, United Arab Emirates,
(3) University of Toronto, Canada

Abstract

Islamic economic principles have undergone significant transformation as they move from classical fiqh-based reasoning into contemporary policy instruments within modern governance systems. This shift reflects increasing institutionalization, regulatory demands, and integration into global financial frameworks, raising questions about how normative legal doctrines are reinterpreted and operationalized. This study aims to examine the nature of this legal transformation and to analyze how jurisprudential principles are translated into enforceable policy frameworks across different institutional contexts. A qualitative normative–juridical research design is employed through systematic analysis of 94 legal documents, including classical texts, fatwas, and regulatory standards from multiple jurisdictions. Analytical matrices and thematic coding are used to identify patterns of doctrinal adaptation, institutional mediation, and policy codification. The findings reveal that legal transformation is a multi-layered process involving doctrinal preservation, interpretive mediation, and regulatory abstraction, often resulting in reduced normative depth as principles become standardized. Institutional governance plays a critical role in shaping the extent to which ethical foundations are retained or simplified. The study concludes that the transformation from fiqh to policy instrument requires integrative governance models that balance interpretive richness with regulatory functionality, ensuring alignment between normative objectives and contemporary economic realities.

Full text article

Generated from XML file

References

Abd Rahman, N., Hoque, M. N., Osman, M. R., & Mastuki, N. (2024). Internal Shariah audit change: an identification of specific Islamic legal maxim in Islamic banking institution. Qualitative Research in Financial Markets, 17(4), 773–793. https://doi.org/https://doi.org/10.1108/QRFM-11-2023-0262

Abu Al-Haija, E., Al-Haraizah, A., Lataifeh, A. S., Meqdade, M., & Yousef, N. (2025). The impact of digital banking transformation (DBT) platforms on the profitability and efficiency of Islamic banking. Journal of Islamic Marketing, 17(3), 1080–1100. https://doi.org/https://doi.org/10.1108/JIMA-06-2024-0241

Al-Okaily, M., & Alsmadi, A. A. (2025). RETRACTED: The role of metaverse and blockchain in enhancing digital Islamic finance: empirical perspective. Journal of Islamic Marketing, 16(7), i–xxiv. https://doi.org/https://doi.org/10.1108/JIMA-11-2023-0369

Alghafes, R., Karim, S., Aliani, K., Qureishi, N., & Alkayed, L. (2024). Influence of key ESG factors on Islamic banks’ financial performance: Evidence from GCC countries. International Review of Economics & Finance, 96, 103629. https://doi.org/https://doi.org/10.1016/j.iref.2024.103629

Alhammadi, S. (2025). Islamic finance as a driver for enhancing economic sustainability and innovation in the GCC. Journal of Science and Technology Policy Management, 17(1), 25–46. https://doi.org/https://doi.org/10.1108/JSTPM-11-2023-0206

Aljughaiman, A. A., Cao, N. D., Trinh, V. Q., Albarrak, M., & Vo, X. V. (2023). Does gender diversity affect financial strength differently in conventional and Islamic banks? Evidence from MENA countries. Pacific-Basin Finance Journal, 80, 102095. https://doi.org/https://doi.org/10.1016/j.pacfin.2023.102095

Alnaim, M. M., Albaqawy, G., Bay, M., & Mesloub, A. (2023). The impact of generative principles on the traditional Islamic built environment: The context of the Saudi Arabian built environment. Ain Shams Engineering Journal, 14(4), 101914. https://doi.org/https://doi.org/10.1016/j.asej.2022.101914

Avdukic, A., & Asutay, M. (2025). Testing the development impact of islamic banking: Islamic moral economy approach to development. Economic Systems, 49(2), 101229. https://doi.org/https://doi.org/10.1016/j.ecosys.2024.101229

Bhat, M. A., Khan, S. T., Al Balushi, Y. M. Z., Wedajo, A. D., & Haseeb, M. (2024). The digital frontier of Islamic tax compliance: unveiling the influence of ICT as a moderator. Journal of Islamic Accounting and Business Research, 17(2), 328–345. https://doi.org/https://doi.org/10.1108/JIABR-07-2023-0220

Bin-Armia, M. S., Armia, M. S., & Syarif, M. F. (2024). Economical rights versus God’s rights: criticising of the implementation Shariah economic in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 17(6), 1267–1290. https://doi.org/https://doi.org/10.1108/IMEFM-01-2024-0054

Cherni, S., & Ben Amar, A. (2024). Does digitalization affect shariah supervisory board efficiency? Evidence from Islamic banks. Journal of Islamic Accounting and Business Research, 17(1), 74–102. https://doi.org/https://doi.org/10.1108/JIABR-03-2023-0077

Ercanbrack, J. G., & Ali, A. (2024). The new legalities of Islamic contractual interpretation: institutional frameworks and the displacement of intention. International Journal of Islamic and Middle Eastern Finance and Management, 17(6), 1196–1212. https://doi.org/https://doi.org/10.1108/IMEFM-03-2024-0156

Fanaei Eshkevari, J. (2025). International relations from the perspective of Islamic mysticism. Social Sciences & Humanities Open, 12, 102157. https://doi.org/https://doi.org/10.1016/j.ssaho.2025.102157

Ghaemi Asl, M., Ben Jabeur, S., Hosseini, S. S., & Tajmir Riahi, H. (2024). Fintech’s impact on conventional and Islamic sustainable equities: Short- and long-term contributions of the digital financial ecosystem. Global Finance Journal, 62, 101022. https://doi.org/https://doi.org/10.1016/j.gfj.2024.101022

Ghaly, M., & al-Khatib, M. (2023). COVID-19 and Pandemic Ethics in the Islamic Tradition: An Introduction. Journal of Islamic Ethics, 7(1), 1–49. https://doi.org/https://doi.org/10.1163/24685542-20230096

Halimatusa’diyah, I., & Triana, W. (2024). Sexism and women’s access to justice: Feminist judging in Indonesian Islamic judiciary. Women’s Studies International Forum, 103, 102883. https://doi.org/https://doi.org/10.1016/j.wsif.2024.102883

Haruna, A., Oumbé, H. T., Kountchou, A. M., & Pilag Kakeu, C. B. (2024). Can Islamic finance enhance the innovation capacity of Cameroonian SMEs? Empirical evidence based on a multivariate probit approach. Borsa Istanbul Review, 24(1), 187–200. https://doi.org/https://doi.org/10.1016/j.bir.2023.11.006

Hudaefi, F. A., Hassan, M. K., & Abduh, M. (2023). Exploring the development of Islamic fintech ecosystem in Indonesia: a text analytics. Qualitative Research in Financial Markets, 15(3), 514–533. https://doi.org/https://doi.org/10.1108/QRFM-04-2022-0058

Iqbal, M., Hakim, L., & Aziz, M. A. (2024). Determinants of Islamic bank stability in Asia. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-07-2022-0174

Iqbal, M. S., Fikri, S. M., & Arshad, N. C. (2025). Consumer preferences in Islamic unit trust funds: factors influencing fund management firm selection in Pakistan. Journal of Islamic Marketing, 17(3), 1101–1158. https://doi.org/https://doi.org/10.1108/JIMA-07-2024-0283

Irimia-Diéguez, A., Albort-Morant, G., Oliver-Alfonso, M. D., & Ullah, S. (2024). Predicting the intention to use Paytech services by Islamic banking users. International Journal of Islamic and Middle Eastern Finance and Management, 17(1), 1–15. https://doi.org/https://doi.org/10.1108/IMEFM-07-2022-0298

I??k, Ö., Adalar, ?., & Shabir, M. (2025). Measuring efficiency, productivity and sustainability performance for ?slamic banks: a fuzzy expert-based multi-criteria decision support model using spherical fuzzy information. International Journal of Islamic and Middle Eastern Finance and Management, 18(6), 1482–1519. https://doi.org/https://doi.org/10.1108/IMEFM-09-2024-0477

Kashi, A., Laallam, A., Mansour Nomran, N., Azmi Abumughli, A., & Al-Binali, T. (2024). Do institutional environment and corporate governance structures determine Islamic Banks’ sustainability performance? Evidence across key jurisdictions in Islamic finance industry. Borsa Istanbul Review, 24(6), 1088–1100. https://doi.org/https://doi.org/10.1016/j.bir.2024.06.005

Khurram, S., & Khurram, A. (2025). When to standardize and when to adapt: understanding the effects of Islamic prescriptions on strategic choice-making of multinational enterprises. International Journal of Islamic and Middle Eastern Finance and Management, 18(6), 1245–1270. https://doi.org/https://doi.org/10.1108/IMEFM-07-2024-0324

Kiliyamannil, T. J. (2023). Neither global nor local: Reorienting the study of Islam in South Asia. Asian Journal of Social Science, 51(4), 244–251. https://doi.org/https://doi.org/10.1016/j.ajss.2023.07.002

Liaqat, H., Ahmed, I., & Yousaf, S. U. (2024). An exploratory insight into religion based communication in Islamic financial institutions. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-08-2023-0257

Mawardi, I., Al Mustofa, M. U., Widiastuti, T., & Ghozali, M. (2024). The influence of institutional quality, economic freedom, and technological development on Islamic financial development in OIC countries. Journal of Open Innovation: Technology, Market, and Complexity, 10(2), 100279. https://doi.org/https://doi.org/10.1016/j.joitmc.2024.100279

Meskovic, A., Avdukic, A., & Kozarevic, E. (2024). Assessing the impact of external determinants on the social performance of Islamic banks. International Journal of Islamic and Middle Eastern Finance and Management, 17(1), 124–145. https://doi.org/https://doi.org/10.1108/IMEFM-08-2022-0335

Muryanto, Y. T. (2023). The urgency of sharia compliance regulations for Islamic Fintechs: a comparative study of Indonesia, Malaysia and the United Kingdom. Journal of Financial Crime, 30(5), 1264–1278. https://doi.org/https://doi.org/10.1108/JFC-05-2022-0099

Nomran, N. M., Haron, R., Laallam, A., Ateeq, A., Alzoraiki, M., Milhem, M., & Abey, J. (2025). Do Islamic stock markets outperform conventional markets when facing cryptocurrency threats? Empirical evidence from Asian countries. Social Sciences & Humanities Open, 11, 101472. https://doi.org/https://doi.org/10.1016/j.ssaho.2025.101472

Okumu?, H. ?., & Gümü?, M. A. (2025). Revitalizing “mahr” for Muslim women’s empowerment within Türkiye’s secular legal system. Social Sciences & Humanities Open, 12, 101644. https://doi.org/https://doi.org/10.1016/j.ssaho.2025.101644

Pradheksa, P. Y., & Rozuli, A. I. (2025). Risk, Islam, and counter-experts: Analyzing the fatwa against the Muria nuclear power plant. Studies in History and Philosophy of Science, 111, 56–62. https://doi.org/https://doi.org/10.1016/j.shpsa.2025.05.003

Riaz, U., Burton, B., & Fearfull, A. (2023). Emotional propensities and the contemporary Islamic banking industry. Critical Perspectives on Accounting, 94, 102449. https://doi.org/https://doi.org/10.1016/j.cpa.2022.102449

Shabana, A. (2023). From the Plague to the Coronavirus: Islamic Ethics and Responses to the COVID-19 Pandemic. Journal of Islamic Ethics, 7(1), 92–128. https://doi.org/https://doi.org/10.1163/24685542-12340060

Sharif, K., & Faisal, M. N. (2025). Mapping an Islamic venture capital setup using foresight-based social construction approach. International Journal of Islamic and Middle Eastern Finance and Management, 18(4), 787–812. https://doi.org/https://doi.org/10.1108/IMEFM-03-2024-0141

Sheikh, R., & Hussain, K. (2024). Reimagining Islamic banking in the light of Maqasid Shariah. Qualitative Research in Financial Markets, 17(5), 1113–1134. https://doi.org/https://doi.org/10.1108/QRFM-04-2024-0108

Soedarmono, W., & Yusgiantoro, I. (2023). Islamic bank procyclicality in an emerging market economy: Do bank size and financing contracts matter? The Quarterly Review of Economics and Finance, 92, 132–141. https://doi.org/https://doi.org/10.1016/j.qref.2023.09.003

Srairi, S. (2024). The risk governance paradox in GCC banks: unveiling the roles of risk disclosure and fintech on performance for conventional and Islamic banks. Journal of Financial Reporting and Accounting, 24(2), 626–674. https://doi.org/https://doi.org/10.1108/JFRA-07-2024-0405

Srairi, S., & Kateb, I. (2025). From ESG to risk-taking and financial stability: is board gender diversity the missing link in Islamic and conventional GCC banks? The Journal of Risk Finance, 26(5), 805–839. https://doi.org/https://doi.org/10.1108/JRF-04-2025-0177

Sudirman, S., Ramadhita, R., Bachri, S., & Whindari, Y. (2025). The transformation of state islamic higher education institutions into World-Class University: From globalisation to institutional values. Social Sciences & Humanities Open, 12, 101705. https://doi.org/https://doi.org/10.1016/j.ssaho.2025.101705

Taufik Syamlan, Y., Wahyuni, S., Heruwasto, I., & Hamsal, M. (2025). Exploring sharia compliance parameters in marketing to foster innovation and collaboration within Islamic finance. Journal of Islamic Marketing, 17(1), 96–136. https://doi.org/https://doi.org/10.1108/JIMA-04-2024-0172

Viverita, V., Bustaman, Y., & Danarsari, D. N. (2023). Liquidity creation by Islamic and conventional banks during the Covid-19 pandemic. Heliyon, 9(4), e15136. https://doi.org/https://doi.org/10.1016/j.heliyon.2023.e15136

Authors

Omar Al-Fahim
omaralfahim@gmail.com (Primary Contact)
Fatima Al-Mazrouei
Sarah Williams
Al-Fahim, O., Al-Mazrouei, F. ., & Williams, S. . (2026). FROM FIQH TO POLICY INSTRUMENT: THE LEGAL TRANSFORMATION OF ISLAMIC ECONOMIC PRINCIPLES. Sharia Oikonomia Law Journal, 4(1), 28–41. https://doi.org/10.70177/solj.v4i1.3589

Article Details