The nexus between Islamic social finance, quality of human resource, governance, and poverty

Tika Widiastuti; Imron Mawardi; Siti Zulaikha; Sri Herianingrum; Anidah Robani; Muhammad Ubaidillah Al Mustofa; Nikmatul Atiya

doi:10.1016/j.heliyon.2022.e11885

The nexus between Islamic social finance, quality of human resource, governance, and poverty

Heliyon. 2022 Nov 25;8(12):e11885. doi: 10.1016/j.heliyon.2022.e11885. eCollection 2022 Dec.

Authors

Tika Widiastuti¹, Imron Mawardi¹, Siti Zulaikha¹, Sri Herianingrum¹, Anidah Robani², Muhammad Ubaidillah Al Mustofa³, Nikmatul Atiya¹

Affiliations

¹ Faculty of Economics and Business, Universitas Airlangga, Indonesia.
² Institute of Technology Management and Entrepreneurship, Universiti Teknikal Malaysia Melaka (UTeM), Malaysia.
³ Department of Development Studies, Institute of Technology Sepuluh Nopember, Indonesia.

Abstract

This research aims to examine the effects of the Islamic social finance (zakat), the Islamic Human Development Index (IHDI), and the quality of governance on poverty alleviation in 39 Organization of Islamic Cooperation (OIC) member countries from 2007 to 2020. This study uses a fixed effect model to analyze the relationship between variables. The findings show that the Islamic human development index, as a proxy for the quality of human resources, supports the reduction of poverty in OIC countries. Furthermore, the zakat, voice and accountability, and trade openness have a negative and significant relationship with poverty. The quality of governance, population, inflation, and exchange rate, on the other hand, has no significant effect on the poverty rate. These findings can be used as the foundation for state government as the policymaker to solve poverty. The uniqueness of this study is the application of the modified human development index based on the five Islamic objectives and empirically investigates its impact on poverty.

Keywords: Governance; Human development; Islamic social finance; Macroeconomics; No poverty.