Can religious values reinvigorate the links between development and falāh?

Purpose: Previous studies have challenged the Human Development Index’s (HDI) ability to emulate the achievement of falāh (happiness). This paper aims to evaluate the role of religious values in establishing a positive link between the current measurement of development and falāh. Design/methodology/approach: First, this study derives an improved value-loaded development measure from the concept of Maqasid al-Shari’ah (the higher objectives of Islamic law). Second, this paper compares the calculated Maqasid al-Shari’ah Index (MSI) with the HDI of some Organisation of Islamic Cooperation (OIC) countries by using the parametric pair difference z-test and t-test along with the non-parametric Wilcoxon signed-rank test. Finally, the relationship of both indices and the proxy of falāh are examined by using the ordinary least square and the generalised method of moments estimations. Findings: As far as the religious-led development is concerned, the HDI underestimates OIC countries’ development progress. Here, the MSI can better embody the attainment of falāh than the HDI. Research limitations/implications: This study only covers limited OIC countries due to the data availability issue. Practical implications: The cultural-based development stemming from the religious values proves useful for putting the government effort towards the attainment of the objective of human well-being in the right direction. Originality/value: To the best of the authors’ knowledge, this is the first study examining the empirical relationship between the MSI and falāh.