Developing an Index of Socio-Economic Development Consistent with Maqasid Al-Shari’Ah

In the economic development literature, both the definition and scope of economic development has gone through significant changes. Initially, economic growth and economic development were synonymous terms and per capita income was a sufficient enough barometer for informing about the level of economic development. Then, focus has shifted to human development and now towards sustainable development. Human Development Index (HDI) is the most widely used index for assessing level of economic development; however, it does not account explicitly for environmental degradation, resource depletion, income distribution and poverty. This study strives to assist in building a comprehensive index that covers these elements which are considered important for ensuring sustainable development and that are also reflective of Maqasid Al-Shari'ah. Our findings represent striking differences between HDI and Islamic HDI (I-HDI) rankings. Oil rich Muslim countries go several places down in I-HDI as compared to their HDI rankings. Similarly, countries with political unrest do much worse in I-HDI than in HDI. Several rich countries of Latin America and Europe due to high debt burden, unemployment rate and income inequality rank low in I-HDI as compared to their standing in HDI. Overall, the results indicate that Muslim countries are themselves far behind in meeting the ideals of Maqasid-e-Shari'ah and ensuring sustaining development