Endogenising TRUST for a Good Waqf' Governance
Islamic moral economy aims to create a social economy based on the ethical values of Islam. The axioms of Islamic political economy aims to create the homoIslamicus with Islamic worldview as an individual who is rational but obeys the rules enshrined in the Qur’an and therefore is considered to be ‘obeying individual’. Such individual characteristics is expected to create an environment in which justice and beneficience along the lines of rububiyah and tazkiyah and uhkuwa will prevail to make sure that the social economy of Islam carries the values of Islamic moral. An essential outcome of such a process in such an environment is trust; trust between individuals and between individuals and institutions.
Considering the historical experience in the Muslim world, one sees the impact of trust in perpetuating the Islamic civilization. The very adjective given to Prophet Muhammad was Muhammad-ul Amin (the trustable Muhammad), which as an adjective is considered as the corner stone of the Muslim self. The principles of Islamic moral economy thus aimed to expand the trust in the society to make sure that the social economy of Islam works in the interest of all the stakeholders. This can be seen in the guild system in the Ottoman era, which is called Ahilik (brotherhood) system, and it benefited from the axioms and principles of Islamic moral economy in creating a society of trust; which paved the way for the development of Ottoman society from a small clan into an Empire.
Since Islam carries the notion of being an alternative system, essential part of this alternative system is the ethical and moral nature of social economy conducted within the Islamic paradigm. This goes beyond the current practice of Islamic finance, which has failed to work within such a paradigm. However, waqf being an essential; positive measure of Islamic moral economy can be configured to base on trust as a social capital to further the welfare of the society. The expansion of trust as a social capital between individuals and waqf institutions implies that the effectiveness and efficiency of waqf will increase but also waqf activity will increase in the society as fund will be directed to waqf to fulfill their expected activities in overcoming the welfare problems in the contemporary society.
The contemporary economy mainly has tow major issues: welfare and development needs in the Muslim society; however the mistrust which marks the market economy and the behavioural norms of individuals. The first problem can be alleviated by the regeneration of waqf system in the Muslim world in the case where the states have failed. This role historically played well by waqf, which they could repeat again. However, trust in the Muslim societies and communities are terribly low; as individuals do not trust each other nor do they trust the institutions and the state. With the rise of Islamic moral economy beyond the form oriented practice of Islamic banking and finance, provides the necessary tools to expand trust in the society and hence endogenise trust in good waqf governance system to produce an optimal outcome.
Thus, with the integration of trust into waqf management shortcomings in the welfare system can also be alleviated in the society, which rationalizes the importance of trust as a social capital in the society. Since transparency, reputation, accountability, credibility, good collaboration, productivity, risk management and Shari’ah-compliant are the key words for sustainability the waqf management, endogenising trust through the values and norms of Islamic moral economy can help to develop an optimal outcome. Considering that there is a clear relation among waqif, mutawalli, waqf board and maukuf’alaih as the stakeholders of waqf, through the development of trust by developing homoIslamicus good waqf governance can be established, as homoIslamicus works through the moral norms of Islam to create the trust based social economy.