The Institutional Development of Islamic Finance in the Middle East: A Post-Colonial Comparative Perspective

Date

2025

Authors

Rammal, H.G.
Pereira, V.
Temouri, Y.
Laker, B.
Tarba, S.
Ferreira, J.J.

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Business History, 2025; 67(2):395-412

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Hussain G. Rammal, Vijay Pereira, Yama Temouri, Benjamin Laker, Shlomo Tarba, João J. Ferreira

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Abstract

The Islamic finance sector has experienced rapid growth since its commercialization in the 1970s. For many Muslim countries that gained independence from their colonial rulers, developing the financial industry that represented their faith and value belief systems gave the population a sense of identity. This paper traces the historical development of the Islamic finance sector in the Middle East. We apply the post-colonial perspective and the Institutional theory lens to analyze the evolution of governance models across three Middle Eastern countries: Bahrain, Kuwait, and the UAE. We find that the foundation for the Islamic finance sector was laid soon after these countries gained independence. The governance models in these countries have evolved from a decentralized approach to a centralized system aimed at harmonizing operations in the region and globally. The paper highlights implications for theory, policy, and practice and identifies avenues for future research.

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Published online: 19 Jul 2023

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© 2023 Informa UK Limited, trading as taylor & Francis Group

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