Explorations in agent-based simulation: analysis of Gini Index after zakat enforcement under interest based system
Voluminous previous studies show that zakah is able to reduce poverty and hence it is expected to minimize income inequality. At this point, there is one question remains, i.e., by how much level of Gini index can be reduced after zakah enforcement? Considering this gap of research, this study is...
| Main Authors: | , , |
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| Format: | Book Chapter |
| Language: | English |
| Published: |
Fiscal Policy Agency, Minister of Finance, The Republic of Indonesia
2019
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/79464/ http://irep.iium.edu.my/79464/1/1576210734-4th%20AIFC%20Call%20for%20Paper%20-%20Final.pdf |
| Summary: | Voluminous previous studies show that zakah is able to reduce poverty and hence it is expected to
minimize income inequality. At this point, there is one question remains, i.e., by how much level of
Gini index can be reduced after zakah enforcement? Considering this gap of research, this study is
proposed to capture the dynamic changes on Gini index after zakah enforcement. In this regards,
zakah enforcement refers to a condition when zakah is received by all recipients. Since the existing
economy is under interest-based system, thus there will be two scenarios in this research, i.e. the
economy is run without and with zakah. From these two scenarios, it can be explored a potential
reduction or increment on Gini index after zakah is disbursed to all recipients under interest-based
system. This research fundamentally is an exploratory research; thus, many findings will be
examined in the analysis. One of interesting findings is that in the long run only around 1 percent of
total population own about 25 percent of total wealth in the economy without zakah. An Agentbased Computational Model (ABM) simulation will be employed to conduct the simulation. The
application of ABM in this research is to bring the use of computational study as an alternative
methodology to develop research in the area of Islamic economics. |
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