THE RELATIONSHIP BETWEEN THE WAQF INSTITUTION IN ISLAMIC LAW AND THE RULE OF LAW IN THE MIDDLE EAST

Dr Hossein Esmaeili Senior Lecturer Flin!ers La" Sc#ool Flin!ers Uni$ersit% A!elai!e Australia I& INTRODUCTION

Establishing a society based on the rule of law where the law is supreme and protects people against arbitrary powers is not exclusive to the West and is valued in other parts of the world including in Muslim countries. In most Muslim countries and many non-Muslim countries an effective system based on the rule of law is, as yet, unavailable. There are many reasons, including political, cultural, economic and legal realities, for the failure of the rule of law in Muslim societies. The legal nature of the waqf institution and the system of land ownership in Islamic law has distinct differences to the institution of trust! and real property law in common law countries. These differences can be considered relevant in the failure to establish a rule of law system in Muslim countries. Waqf, which was established as an innovative institution from the early stages of development of Islamic law has fro"en in time and arguably failed to be an effective institution in addressing wealth management in the Muslim world. It is argued that waqf, which loc#ed wealth and resources into unproductive institutions, has contributed to the wea#ening of civil society in the Muslim world.$ There is a reasonable literature available on this topic in both English and Middle Eastern languages %&rabic, 'ersian and Tur#ish(. This paper briefly reviews the historical bac#ground of trust in the common law system, and in Islamic law, and considers basic principles of waqf law under Islamic law. Then the paper investigates the waqf institution as an economic instrument in the history of the Middle East, and examines the relationship between waqf and the rule of law in Middle Eastern legal systems. II& HISTORICAL BAC'(ROUND OF WAQF IN ISLAM COMPARED TO TRUST IN THE COMMON LAW S)STEM

A& De$elo*ment o+ trust in common la" s%stem The trust, which is the ma)or part of the E*uity system, is an important area of common law legal systems. &ccording to +rederic Maitland, ,the greatest and the most distinctive achievement performed by Englishmen in the field of )urisprudence

Timur -uran, ,The 'rovision of 'ublic .oods under Islamic /aw0 1rigins, Impact, and /imitations of the Wa*f 2ystem3 Law & Society Review vol. 45, no. 6, 788$, 96$, 966.

: ;is< the development from century to century of the trust idea.3 7 The origin of trust in the common law system goes bac# to medieval England.4 &fter the =ormans con*uered England in $8>>, most of the land in England became the property of the -ing. In order to effectively administer the land, the -ing granted land to noblemen, in exchange for the rendering of military services. These noblemen, in turn, granted smaller parcels of land to other noblemen. These grants of land formed the basis for the feudal system of land ownership in England. 6 ?y $89> %@omesday ?oo#(, the feudal system was well-established in England, and the land surveyed in the @omesday ?oo# was held by the -ing %one fifth(, the Ahurch %one *uarter(, and by the -ing!s followers %one half(. 5 The -ing!s followers, numbering about $588, #nown as tenants in chief!, provided services to the -ing.> Bowever, the -ing remained the paramount land-lord, and granting land on behalf of the -ing was the basis of all landholding in England. This doctrine of absolute land-holding by the -ing, and granting to tenants in chief in return for military and other services, is #nown as the doctrine of tenure,C and became the basis of land law in English common law.9 1ver time, an intricate set of hierarchical relationships grew up through the tenurial system, with the -ing at the top, and various groups of landholders possessing rights to parcels of land. The complexity of the system resulted, by the $4th century, in the feudal system becoming both unwieldy and open to numerous claims to the same parcel of land.D ?y the end of the $4th century, the common law system, originated at $8>> when the =ormans con*uered England, became bound by a rigid formalism in which remedies could only be obtained through existing forms of writs, and further there were only a limited numbers of writs in land law. $8 +urther, alienation of land by ordinary tenants was limited by the claims of the feudal overlord and the tenant!s own heirs %whether inter vivos or by will(.$$ /and owners turned to a new innovative legal institution in order to avoid those obstacles in managing their land interests. The institution #nown as the use! is the basis of trust law and the E*uity system in the common law systems. & trust exists in the case when the owner of a legal interest, for example, a land owner, transfers the legal title to another person, to be used for the benefit of other person or persons, or
7

+rederic William Maitland, ,The Enincorporate ?ody3 in B. &. /. +isher %ed.(, The Collected Papers of Frederic William Maitland, vol ! %$D$$(, 7C$, 7C7. 4 William +ratcher, ,Eses of Eses3 Misso"ri Law Review vol. 46, $D>D, 4D, 4D. 6 The origins of feudalism in Europe can be traced to well before $8>>, to the collapse of the Foman empire0 'lun#ett, # Concise $istory p. 58D-5$5. 2ee also F. &. ?rown, %ri&ins of 'n&lish Fe"dalism &llen and Enwin %$DC4(, 7D. 5 F. /ennard, R"ral 'n&land ()*+ , ((!- %$D5D( Alarendon 'ress, 75-7>. > 'eter ?utt, Land Law %5th ed., 788>(, Thomson, p. >C. C E. Gohn, Land Ten"re in 'arly 'n&land %$D>8(, chapters $ H 4. 9 'eter ?utt, Land Law %5th ed., 788>(, Thomson, C4. D ?rendon Edgeworth et al Sac.ville and /eave #"stralian Property Law %9th ed., 7889(, ?utterworths, $D>-$D9. $8 Theodore 'lun#ett, # Concise $istory of the Common Law , %5th ed., 788$( /awboo# Exchange, >C5I 'atric# 'ar#inson, Tradition and Chan&e in #"stralian Law %4rd ed., 7885(, C7 and 'eter ?utt, Land Law %5th ed., 788>(, D>. $$ & 2impson, # $istory of Land Law %$D96( Alarendon 'ress, pp. 54-56 ;c#ec, later-

for some other purposes.$7 In other words, through a trust, e*uitable obligations will be created to deal with a property in a particular way. $4 Indeed, by the creation of a trust, the legal title %in law(, the e*uitable title %in E*uity( and the beneficial title are separated in three elements, which are the trustee %title holder(, trust property and the beneficiary or ob)ect of the trust. Initially, the courts of common law in England did not recognise the use! %feoffees to "ses(,$6 but the practice was widespread and impacted on royal revenues to the extent that Benry JIII, in $548, enacted legislation %the Stat"te of 0ses (-!- %7C Ben JIII c $8(( to abolish uses. Bowever, land owners and lawyers developed the device of a use upon a use! which was accepted by $>45,$5 by which people created an extra use! to bypass the 2tatute of Eses. +ollowing the passing of the 2tatute of Eses, and under pressure from the landholders, in $568, the Stat"te of Wills %47 Ben JIII c $( was passed, in which a statutory right was created to enable landholders to ma#e conditional testamentary gifts of land. $> In addition, in $>65, the feudal tenure was abolished and the modern trust emerged. $C The law of trusts, in common law countries, has been consistently amended and has acted to counter state intervention in wealth transmission and management by eliminating or reducing taxes, and limiting the government!s regulation of individuals! wealth and property.$9 &ccording to &ustin W. 2cott0
It was chiefly by means of uses and trusts that the feudal system was undermined in England, that the law of conveyancing was revolutioni"ed, that the economic position of married women was ameliorated, that family settlements have been effected, whereby daughters and younger sons of landed proprietors have been enabled modestly to participate in the family wealth, that unincorporated associations have found a measure of protection, that business enterprises of many #inds have been enabled to accomplish their purposes, that great sums of money have been devoted to charitable enterprisesI and by employing the analogy of a trust, by the invention of the so-called constructive trust, the courts have been enabled to give relief against all sorts of fraudulent schemes whereby scoundrels have sought to enrich themselves at the expense of other persons.$D

Therefore, in contemporary common law systems, trust is acting as an important economic institution for management of properties, particularly for future purposes, as well as a legal mechanism in E*uity to provide a cushion against instances of rigidness in common law principles. Indeed, the success and effectiveness of common law systems in the contemporary world can, to a great extent, be attributed to the development of a flexible e*uitable system within the English common law system.
$7 $4

Michael Evans, 'q"ity and Tr"sts %7nd ed., 788D(, 455. Re Williams ;$9DC< 7 Ah $7 at $9, cited by Isaacs G in 1lenn v Federal Commissioner of Land Ta2 %$D$5( 78 A/F 6D8 at 584. $6 1riginally, trusts were developed when the land holders %the feoffors( conveyed their lands to certain trusted agents %the feoffees to "ses(. The latter were obliged to hold land for the benefit of % to the "se of( those designated by the landholders %the feoffors(. In practice, the landholders % feoffors( would instruct the feoffees to hold the land for the benefit of themselves for life, and to those nominated by them by deed or will after their death. This would give greater power to landholders to manage their real property during their life and after. +urther, they could avoid certain legal implications by creating the uses!. +or a good overview of the development of uses, see F. B. Belmhol", ,The Early Enforcement of Eses3 Col"m3ia Law Review vol. CD, $DCD, $584. $5 Sam3ach v 4aston %$>45( 7$ EF $>5 $> Michael Evans, 'q"ity and Tr"sts %7nd ed., 788D(, 45C. $C Michael Evans, 'q"ity and Tr"sts %7nd ed., 788D(, 45C. $9 Geffrey 2choenblum, ,The Fole of /egal @octrine in the @ecline of the Islamic Waqf0 & Aomparison with the Trust3 5ander3ilt 6o"rnal of Transnational Law vol. 47, $DDD, $$D$, $784. $D &ustin W. 2cott, ,The Trust as an Instrument of /aw Feform3 7ale Law 6o"rnal, vol. 4$, no. 5, $D77, 65C, 65C.

+urthermore, most of the principles of E*uity have been developed through trust law. Therefore, trust is both an important economic institution, which enhances flexible economic activities, and a legal mechanism which provides more effective )ustice. B& Historical .ac,/roun! o+ waqf in Islam Ender Islamic law, waqf %plural0 awqaf( is an Islamic law institution originated in the sayings of the 'rophet Muhammad %S"nna( which have had important impacts on the social and economic life of Muslim societies for centuries. &ccording to Islamic )urisprudence texts, waqf did not exist in 8ahiliya %pre-Islamic &rabia H before >$8 AE( and was inferred by the 'rophet Muhammad. 78 In early sayings of the 'rophet %hadiths( what is now #nown as waqf is referred to as the sadaqato 8ariyeh ;continuous charity<!.7$ @uring the time of the 'rophet, properties such as mos*ues, water bores, land and horses were made waqf for charitable purposes.77 &ccording to Islamic )urisprudence texts, and leading hadith scholars,74 real property was the first incident of waqf in Islam, made by the second Aaliph on the order of the 'rophet.76 III& BASIC PRINCIPLES OF WAQF LAW IN ISLAM

The institution has numerous potentials for a reconstruction of social, economic, and legal affairs of Muslim societies in the future. Waqf is an &rabic word and literally means ha3s % detention!( and in Islamic 2har!ia law means #eeping the property %surrendering the title( for separate use for a particular purpose!.75 Waqf under Islamic law is classified in two categories, which are waqf for children and the family %waqf al9ahli(I and charitable waqf %waqf al9.hayri(.7> &ccording to the 2hafei school of )urisprudence, when a property is made waqf, the ownership of the property is transferred to .od, and hence there is no legal title for
78

2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, p. 7>9. 7$ It is narrated from the 'rophet Muhammad %by Moslem, &bu @aoud, &l-Termadhi and &l-=isai( that When a person dies, they are survived by three things0 sadaqato 8ariyeh ;continuous charity<!, #nowledge that benefits society, and their children of good character.! It has been said that sadaqato 8ariyeh means al9waqf. 2ee 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al+i#er, ?eirut, 7nd ed., $DD9, 7>9 77 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7>9-7>D. 74 Termadhi says that this hadith has been narrated from many scholars and companions of the 'rophet, and he #nows no one who has raised doubt about this hadith and that this was the first incident of waqf in Islam. 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7 nd ed., $DD9, 7C8. 76 It is narrated from &bdullah Ibn 1mar that the second Aaliph %1mar( had a piece of land in -haybar, in the outs#irts of Medina. Be came to the 'rophet stating that he had never obtained such a valuable property and sought advice of the 'rophet Muhammad to deal with the highly valuable land. The 'rophet said, ,If you li#e, ma#e the property inalienable and give the benefits for charity ; $a3asat aslaha wa tasaddaqat 3eha<3. 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7>D. 75 $a3s al9asl wa tas3il al9samarehi ;#eeping the principle and using the benefit %for the way of &llah(<0 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7 nd ed., $DD9, 7>C. 7> 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7>C.

the endower or the beneficiary %mawqo"f alayh(.7C Bowever, according to the Mali#i and Banbali schools of )urisprudence, by endowing a property as waqf, the endower transfers the ownership to the beneficiary. 79 &ccording to the Banafi school, the waqf property may be sold.7D The land sub)ect to waqf was not alienable, not to be gifted, not to be inherited, and its benefits should be used for poor people, relatives of the endower, slaves, itinerant travellers, and guests.48 The trustee %m"tawalli( may eat from the benefit and may use the benefit to feed the needy %but not the wealthy(.4$ ?oth real property and chattels, including animals, can be sub)ect of waqf. Bowever, according to the Banafi school, animals cannot be sub)ect of waqf.47 Waqf for nonMuslims who are people of the ?oo# %Ahristianity and Gudaism( is allowed. 44 2aphia, one of the 'rophet!s wives, made certain properties waqf for her brother who was Gewish.46 &ccording to some scholars, and according to the Banafi school, a person may ma#e waqf for himself or herself, and for their children and grandchildren.45 &ccording to some, a person may not ma#e their property waqf if that is intended to harm their heirs.4> Bowever, this proposition may ma#e most waqf incidents impossible according to 2hari!a, given that most waqfs potentially may harm the interests of the endower!s heirs. I0& DE0ELOPMENT OF WAQF INSTITUTION AS AN ECONOMIC INSTRUMENT IN THE MIDDLE EAST

Waqf law was not developed until the second century of Islam when Islamic schools of law too# shape. .iven that there is no provision in the Kuran on the nature of waqf, and it was not commonly practiced during the time of the 'rophet Muhammad and the Fighteous Aaliphs, there was much uncertainty about the law of waqf, and different legal principles developed according to the various schools of law.
7C

2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C8. 79 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C8. 7D 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C8. 48 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7>D. 4$ 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7>D. 47 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C$. 44 Moha**e* Belli, 2harayeh al-Islam ;+arsi translation by &bol Kasim Ibn &hmad La"di< Eniversity of Tehran 'ress, Tehran, $DD5, 46C. Maynodeen bin &li %2haheed Thani(, #l9Rodha al9:ahiya fi Sharha al9Loma al94emeshqiya ;Aollection of /egal 2ections by &sadollah /otfi< Ma)d 'ress, Tehran, 788D, 49. 46 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C$. 45 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C$-7C7. 4> 2hei#h 2ayyed 2ahbe*, Fiqh al9S"nna ;2unni Gurisprudence< vol. 4, @ar al-+i#er, ?eirut, 7nd ed., $DD9, 7C6-7C5.

.enerally, waqf originated as a charitable institution in Islam. /ater, during the 1mayyed and &bbasid dynasties, when new territories, particularly from the Foman Empire, were con*uered by Muslims, they encountered the considerable pre-existing endowments for churches, orphanages, monasteries and poorhouses in the con*uered lands.4C Inspired by charitable impulses and by the endowments they had observed in the con*uered lands, Muslims extended the waqf institution to a wide variety of property.49 @uring the 1ttoman Empire %$7DD-$D74(, and the 2afavid 'ersian Empire %$58$$C7>(, the institution of waqf became an important part of the economic system of those two Islamic empires. In $97>, through certain law reform initiatives in the 1ttoman Empire, the waqf properties and administration were placed under the control of an Imperial ministry and the income from ma)or waqf properties were sei"ed by the state.4D &s a result, the Empire brought under its control ma)or private investments and properties, including public water supply %largely constituted as waqf(. It is estimated that more than half of the real property in the Empire, which at the time included most of the current Middle Eastern countries, was under waqf endowment.68 2imilarly, another ma)or Muslim empire, Iran, now under Ka)ar dynasty %$CCD-$D76(, created a Ministry for Waqf in $956, which is still a government department but comes under the authority of the 2upreme /eader today. The growth of waqf in the Muslim world can be attributed to a number of factors. +irstly, the strong religious and charitable impulses of many in the Muslim world have led many people to ma#e at least part of their property waqf. &s was mentioned above, waqf originally was named by the 'rophet as sadaqato al98ariyeh! %continuous charity(. There are also extensive literature including Kuranic verses and the hadith recommending Muslims to spend money and property in the way of &llah ;fi sa3il #llah<. Indeed, the waqf system acted as what the social security system does in a modern state li#e &ustralia, and Muslims contributed to the charitable system by ma#ing their properties waqf. 2econdly, waqf was a means of safeguarding property against the ris# of expropriation by the state or other powerful individuals and nobles who were able to confiscate wea#er parties! properties, as all groups would respect waqf property. The endower of waqf property was still able to control and maintain the property by ma#ing themselves and their heirs the m"tawali %trustee(. The only power that an endower of waqf property would forfeit would be the right of alienation of the property. Thirdly, waqf has been used as a method to evade taxation. +inally, occasionally, ma)or land holders have made part of their properties waqf to avoid the claims of other potential interest holders to the property.6$

4C

&saf &. &. +y"ee, %"tline of M"hammadan Law %6th ed., $DC6( 1xford Eniversity 'ress, p. 7C>. 12t# e!& To .e use! +or +inal !ra+t49 &saf &. &. +y"ee, %"tline of M"hammadan Law %6th ed., $DC6( 1xford Eniversity 'ress, p. 7C>. 12t# e!& To .e use! +or +inal !ra+t4D Wael Balla*, #n ;ntrod"ction to ;slamic Law %788D( Aambridge Eniversity 'ress, p. D>. 68 Wael Balla*, #n ;ntrod"ction to ;slamic Law %788D( Aambridge Eniversity 'ress, p. D>. 6$ +or an overview of the varying ob)ectives of waqifs %endowers of waqf( see Fobert McAhesney, ,Waqf and 'ublic 'olicy0 The Waqfs of 2hah &bbas $8$$-$874N$>87-$>$63 #sian and #frican St"dies vol. $5, no. 7, $D9$, p. $>5-$D8, and .abriel ?aer, ,The Wa*f as a 'rop for the 2ocial 2ystem %2ixteenth-Twentieth Aenturies(3 ;slamic Law and Society, vol. 6, no. 4, $DDC, 7>6-7DC.

>

0&

WAQF AND THE RULE OF LAW

There is intense debate among Muslim and non-Muslim legal scholars and economists about the role and performance of waqf in Muslim societies. &lthough waqf as a social institution has significantly contributed to the social welfare of Muslim communities for centuries,67 there are some arguments that the institution has loc#ed considerable properties and investments into an unprofitable system.64 Establishing societies based on a rule of law! system where the law! is supreme and protects people against the arbitrary power of the state and individuals, 66 is a tradition of Western legal systems but cherished in other parts of the world including in Muslim countries. In most Muslim countries an effective rule of law! 65 system to protect both individuals and the community against the powerful state is as yet unavailable. Many reasons are cited for the lac# of a rule of law system in the Muslim world. There are historical, cultural, religious, political and economic reasons for the lac# of effective legal systems based on the rule of law! in most Muslim countries. Aolonialism, a lac# of water resources and the discovery of huge oil reserves in the early $Dth century are further factors contributing to the failure of civil society and the rule of law. Waqf is an economic institution, so by lin#ing its operation to civil society, the role of the economy and the establishment of the rule of law system is emphasised. There is no doubt that the economy and its institutions play an important role in the social, political, and legal affairs of every society. Bistorically, feudalism in Europe, land and water ownership, the establishment of corporations, revival of commerce and ban#ing, and agricultural productivity made states wea#er and corporations stronger. The e*uivalent to corporations and social association in the Muslim world, particularly in the Middle East, was tribalism. While tribe structure played an important role in the power structure of Islamic empires such as the 1ttoman, Mugul and 2afavid Empires, the system was more family and socially based than economically oriented. In the West, on the other hand, by the $>th century, the feudal system was replaced by a capitalist system, where big corporations and individual wor#ers and farmers were able to influence wea# states in the West.
67

&ndrew White, ,The Fole of the Islamic Wa*f in 2trengthening 2outh &sian Aivil 2ociety0 'a#istan as Aase 2tudy3 ;nternational 6o"rnal of Civil Society Law vol. C, 788>, C-4>. 64 &my 2inger, ,& =ote on /and and Identity0 +rom Me!amet to Wa*f3 in Foger 1wen and Martin '. ?unton %eds( /ew perspectives on property and land in the Middle 'ast Barvard AME2, 788$, $>$$C4, $>$I Gac# .oldstone, ,Islam, @evelopment, and the Middle East0 & Aomment on Timur -uran!s &nalysis3 Papers from For"m <= ;nstit"tional :arriers to 'conomic Chan&e= Cases Considered Mercatus Aenter %7884(, >-CI Timur -uran, ,Why the Middle East is Economically Enderdeveloped0 Bistorical Mechanisms of Institutional 2tagnation3 The 6o"rnal of 'conomic Perspectives , vol $9, no. 4, 7886, C$-D8, 9$. 66 &lbert J. @icey, ;ntrod"ction to the St"dy of the Law of the Constit"tion %$8th ed., $D>5(, 787. 65 While support for the rule of law is worldwide %in both Western and non-Western societies(, the definition and the scope of the notion is not clear. There are political and legal theories on the concept and nature of the rule of law. The concept of the rule of law! is essentially contested. 1n the rule of law see ?rian Tamanaha, %n the R"le of Law= $istory, Politics, Theory , Aambridge Eniversity 'ress, =ew Lor#, 7886I Fonald @wor#in, Law>s 'mpire Barvard Eniversity 'ress, Massachusetts, $D9>I /on /. +uller, The Morality of Law Lale Eniversity 'ress, =ew Baven, %7 nd ed., $D>D(I Goseph Fa", ,The Fule of /aw and Its Jirtue3 in The #"thority of Law Alarendon 'ress, 1xford, $DCD.

&. Waqf as a factor in the lac# of the rule of law &ccording to some scholars, the institution of waqf played an important role in economic underdevelopment of the Middle East and therefore is an important factor for the lac# of rule of law in the Middle East and Islamic world. In the view of these scholars, economy and economic institutions are the main reason behind the establishment of cultural and legal systems in the Muslim societies. ?eside the waqf institution, Islamic contract law and Islamic inheritance law are cited as important factors in the underdevelopment of Islamic economic systems, and the lac# of an effective rule of law based legal system.6> Bistorically, awqaf played important roles in the social and economic order of Islamic states, particularly in the 1ttoman empire %$7DD-$D74(, Mughal empire %$57>-$975( and 2afavid 'ersian empire %$58$-$C7>(. .enerally, awqaf properties were charitable institutions in the agricultural economies, holding thousands of farms, villages, and urban lands.6C The waqf institutions are described as ,redistributive institutions and poor relief agents3.69 They were not designed as special ventures for profit maximisation, or for establishing large corporation-style institutions.6D &ccording to Timur -uran, waqf, as an unincorporated trust established under Islamic law, had an important role in the shortcomings of economic development in the Middle East.58 Waqf had to be fixed in perpetuity in order to establish a balanced arrangement between the Islamic state and the founder of the waqf, which made the waqf properties unproductive and inflexible.5$ &s a result, modern institutions such as modern schools, corporations, and universities, were developed outside of waqf.57 While in the $Dth century, corporations with freedom of association and organi"ational autonomy were developed in the West, waqf institutions in the Muslim world, though

6>

2ee Timur -uran, ,Institutional Aauses of Economic Enderdevelopment in the Middle East0 a Bistorical 'erspective3 in Ganus -ornai, /a"lo Matyas and .erard Foland %eds.( ;nstit"tional Chan&e and 'conomic :ehavio"r, 'algrave-Macmillan, 7889, pp. >6-C>I Timur -uran, ,The 'rovision of 'ublic .oods under Islamic /aw0 1rigins, Impact and /imitations of the Wa*f 2ystem3 Law & Society Review vol. 45, no. 6, 788$, 96$I Timur -uran, ,The &bsence of the Aorporation in Islamic /aw0 1rigins and 'ersistence3 #merican 6o"rnal of Comparative Law, vol. 54, 7885, C95. 6C -ayhan 1rbay, ,The Economic Efficiency of Imperial Wa*fs in the 1ttoman Empire3, Papers from the ?;5 ;nternational 'conomic $istory Con&ress, Belsin#i, 788>, located at http0NNwww.helsin#i.fiNiehc788>Nsessions9$O$76.html %7 1ctober 788D(, p. 6. 69 -ayhan 1rbay, ,The Economic Efficiency of Imperial Wa*fs in the 1ttoman Empire3, Papers from the ?;5 ;nternational 'conomic $istory Con&ress, Belsin#i, 788>, located at http0NNwww.helsin#i.fiNiehc788>Nsessions9$O$76.html %7 1ctober 788D(, p. $6. 6D -ayhan 1rbay, ,The Economic Efficiency of Imperial Wa*fs in the 1ttoman Empire3, Papers from the ?;5 ;nternational 'conomic $istory Con&ress, Belsin#i, 788>, located at http0NNwww.helsin#i.fiNiehc788>Nsessions9$O$76.html %7 1ctober 788D(, p. $6. 58 Timur -uran, ,Institutional Aauses of Economic Enderdevelopment in the Middle East0 a Bistorical 'erspective3 in Ganus -ornai, /a"lo Matyas and .erard Foland %eds.( ;nstit"tional Chan&e and 'conomic :ehavio"r, 'algrave-Macmillan, 7889, pp. >6-C>, p. C8. 5$ Timur -uran, ,Institutional Aauses of Economic Enderdevelopment in the Middle East0 a Bistorical 'erspective3 in Ganus -ornai, /a"lo Matyas and .erard Foland %eds.( ;nstit"tional Chan&e and 'conomic :ehavio"r, 'algrave-Macmillan, 7889, pp. >6-C>, p. C7. 57 Timur -uran, ,Institutional Aauses of Economic Enderdevelopment in the Middle East0 a Bistorical 'erspective3 in Ganus -ornai, /a"lo Matyas and .erard Foland %eds.( ;nstit"tional Chan&e and 'conomic :ehavio"r, 'algrave-Macmillan, 7889, pp. >6-C>, p. C7.

providing a #ind of associational freedom, restricted self-governance and the evolution of big corporations with significant economic power against the state.54 In addition, waqf in Islamic societies did not remain as private institutions, struggling for autonomy and recognition by the state. Father, Islamic states, by establishing awqaf state controlled institutions, co-opted waqf for their own purposes. +or example, in Iran, the awqaf organi"ation %sa@man awqaf(, which is a department of the Ministry of Aulture and Islamic .uidance, manages most waqf properties which do not have a specific trustee %m"tawali(.56 2imilarly, in many other Muslim countries, government departments have ta#en over the administration of awqaf properties.55 ?. Waqf as a social institution and a welfare mechanism ?oth in historical terms and in contemporary Muslim societies, waqf has acted as a social institution. It has been a mechanism for the elimination of povertyI supporting families, low socio-economic groups and professional groups. Bistorically, Islamic states and caliphates did not have special departments to support low socio-economic groups or to provide for public wor#s, such as roads, bridges, mos*ues, inns and hospitals.5> 1ne important function of the Islamic waqf was to support social units and to provide for public institutions such as schools and mos*ues. +or example, the health, education and welfare systems of the 1ttoman Empire were financed to a great extent by waqf.5C It is also argued that waqf and the administration of waqf properties in Muslim countries has an important role in the alleviation of poverty in Muslim societies. 59 Waqf in Muslim states provides educational institutions, including universities, colleges and schoolsI orphanages that shelter poor orphansI mos*ues which provide religious and cultural activity centresI charitable clinicsI and shopping complexes and commercial centres where the income is used for social and charitable purposes.5D
54

Timur -uran, ,Institutional Aauses of Economic Enderdevelopment in the Middle East0 a Bistorical 'erspective3 in Ganus -ornai, /a"lo Matyas and .erard Foland %eds.( ;nstit"tional Chan&e and 'conomic :ehavio"r, 'algrave-Macmillan, 7889, pp. >6-C>, p. C6. 56 2ee the website of the sa@man awqaf at0 http0NNwww.iranculture.orgNnahadNoghaf.php %located on 7 1ctober 788D(. 55 +or the Enited &rab Emirates, .eneral &uthority of Islamic &ffairs and Endowments, http0NNwww.aw*af.aeN %located on D 1ctober 788D(. +or Gordan, the Ministry of &w*af and Islamic Boliness, http0NNwww.aw*af.gov.)oNindex.php %located on D 1ctober 788D(. +or Tur#ish @epartment of &w*af, http0NNwww.vgm.gov.trN %located on D 1ctober 788D(. +or 2yria, Ministry of &w*af, http0NNwww.syrianaw##af.orgN %located on D 1ctober 788D(. +or 2audi &rabia, Ministry of Islamic &uthority, &w*af, 'reaching and .uidance, http0NNwww.al-islam.comNarbN %located on D 1ctober 788D(. +or 1man, the Ministry of &w*af and Feligious &uthorities, http0NNwww.maraoman.netN %located on D 1ctober 788D(. +or Katar, Ministry of &w*af and Islamic &uthorities, http0NNwww.islam.gov.*aN %located on D 1ctober 788D(. +or -uwait, Ministry of &w*af and Islamic &uthorities, http0NNwww.islam.gov.#wNsiteN %located on D 1ctober 788D(. 5> &bul Basan M. 2ade*, ,Wa*f, perpetual charity and poverty alleviation3 ;nternational 6o"rnal of Social 'conomics 7887, 7D, vol. $N7, $45-$5$, $68. 5C 2ira) 2ait and Bilary /im, Land, Law & ;slam= Property & $"man Ri&hts in the M"slim World Med ?oo#s, /ondon, 788>, $6D. 59 &bul Basan M. 2ade*, ,Wa*f, perpetual charity and poverty alleviation3 ;nternational 6o"rnal of Social 'conomics 7887, 7D, vol. $N7, $45-$5$, $68. 5D &bul Basan M. 2ade*, ,Wa*f, perpetual charity and poverty alleviation3 ;nternational 6o"rnal of Social 'conomics 7887, 7D, vol. $N7, $45-$5$, $68-$6$.

In the contemporary world, it is argued that the existing waqf institutions could be better managed and used in establishing an effective welfare system, assisting in resource mobilisation and redistribution, and strengthening civil society.>8 0I& CONCLUSIONS

The institutions of trust in common law systems and waqf in Islamic law systems, with certain similarities and differences, are two important legal and economic mechanisms. Ender common law, trust, as the ma)or part of the E*uity system of the English common law system, has been a very effective economic and legal instrument in facilitating economic activity, as well as positively ma#ing rigid legal systems more flexible and )ust. Ender Islamic law, waqf has acted as more of a social welfare mechanism and arguably has not contributed to the development of large economic institutions and corporations. The lac# of ma)or economic associations may be cited as a reason for the lac# of rule of law systems in many Middle Eastern countries. While waqf is cited as a reason for the failure of Islamic economic systems to develop ma)or corporations, it may still be managed in a way to enhance support for social institutions and civil society organisations.

>8

2ira) 2ait and Bilary /im, Land, Law & ;slam= Property & $"man Ri&hts in the M"slim World Med ?oo#s, /ondon, 788>, $C$.

$8