• Diyah Putriani Gadjah Mada University, Indonesia
  • Gairuzazmi Mat Ghani International Islamic University Malaysia, Malaysia
  • Mira Kartiwi International Islamic University Malaysia, Malaysia
Keywords: Zakah, aggregate production, bank lending, agent-based computational model, islamic economics


Zakat plays an undeniably significant role in social life. The enforcement of zakah in early Islamic history is evidence that it is a powerful tool for fostering economic growth. The economy under the reign of Caliphate Umar Ibn Abdul Azis even achieved a surplus, with no one having the right to receive zakah. Recent studies have attempted to link the role of zakah and economic growth qualitatively by arguing that zakah can contribute to economic development. However, the extent to which it has a multiplier effect on economic growth has not been examined. Considering this research gap, this study examines such an effect on economic growth, as represented by Gross Domestic Product (GDP). To capture the full impact of zakah on aggregate production, two scenarios are conducted, namely the economy with and without zakah. The simulation results show that zakah can promote aggregate production. On the other hand, the economy experiences lower aggregate production when there is no zakah. An agent-based computational model (ABM) simulation is employed to run the simulation. The application of ABM in this study is intended to introduce the use of computational study as an alternative method of developing research in Islamic economics.


Aaminou, M. W., & Rajae, A. (2016). Leveraging Ethics to Expand Islamic Banks’ Customer Base : A Fuzzy Agent-Based Modeling Approach. Asian Journal of Applied Sciences, 04(03), 558–574.

Acha, I.A. (2011). Financial Intermediation by Banks and Economic Growth in Nigeria, 1990 – 2008 (2011). Journal of Economics and Sustainable Development, 2(4), Available at SSRN: https://ssrn.com/abstract=2761567

Ahmed, H. (2004). Role of Zakah and Awqaf in Poverty Alleviation. Jeddah: Islamic Development Bank, Islamic Research and Training Institute.

Akbar, N., & Kayadibi, S. (2013). Opportunity and Challenges to Integrate Zakat Into Indonesian Fiscal System in The Light of Siyasah Shar‘iyyah. Global Review of Islamic Economics and Business, 1(1), 57–69. https://doi.org/10.1017/CBO9781107415324.004

Al-suwailem, S. (2007). Islamic Economics in A Complex World: Explorations in Agent-based Simulation. Complexity. Retrieved from http://www.irti.org/English/Pages/Publications.aspx

Al-suwailem, S. (2011). Behavioral Complexity. Journal of Economic Surveys, 25(3), 481–506.

Al-Suwailem, S. (2008). Islamic Economics In A Complex World: Explorations in Agent-based Simulation. Complexity. Jeddah: King Fahad National Library Cataloging-in-Publication Data Islamic Development Bank.

Arthur, W. B. (2013). Complexity Economics: A Different Framework for Economic Thought (012 No. 04).

Assenza, T., Gatti, D. D., & Grazzini, J. (2015). Emergent Dynamics of a Macroeconomic Agent Based Model with Capital and Credit. Journal of Economic Dynamics and Control, 50, 5–28. https://doi.org/10.1016/j.jedc.2014.07.001

Atiq, Z., & Haque, M. E. (2014). Financial Development and Economic Growth: The Role of Financial Liberalization. Available at SSRN: https://ssrn.com/abstract=2407358 or http://dx.doi.org/10.2139/ssrn.2407358

Ayuniyyah, Q., Pramanik, A. H., Saad, N., & Ariffin, I. (2017). The Comparison Between Consumption and Production-based Zakat Distribution Programs for Poverty Alleviation and Income Inequality Reduction, 2(2), 11–28.

Azam, M., Iqbal, N.,& Tayyab, M. (2014). Zakat and Economic Development: Micro and Macro Level Evidence from Pakistan. Bulletin of Business and Economics, 3(2), 85-95.

Barr, J., Ussher, L., & Tassier, T. (2011). Introduction to the Symposium on Agent-based Computational Economics. Eastern Economic Journal, 37, 1-5. 10.1057/eej.2010.65.

Bello, D. A. (2010). Poverty Alleviation through Zakah and Waqf Institutions: A Case for the Muslim Ummah in Ghana (10 No. 23191). Zaria-Nigeria.

Beik, I. S., & Arsyianti, L. D. (2016). Ekonomi Pembangunan Syariah. Jakarta: PT. Raja Grafindo Persada

Bensaid, K., Mouad, A., Haloui, E., Naciri, N., & Aboulaich, R. (2017). Agent Based Modeling of Islamic Microfinance with Cooperatives and Takaful System. International Journal of Applied Business and Economic Research, 15(5), 737–756.

Bongini, P., Iwanicz-Drozdowska, M., Smaga, P., & Witkowski, B. (2017). Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEE Countries (2017). Sustainability (MDPI Open Access), 2017, 9(3), 335; should there be a journal name? Page range?doi:10.3390/su9030335. Available at SSRN: https://ssrn.com/abstract=2966678

Boularhmane, I., & Souissi, M. A. (2016). Corporate Islamic Financing In A Complex Economy. International Journal of Applied Engineering Research, 11(14), 8171–8176.

Bourhime, S., & Tkiouat, M. (2016). Microfinance Overview : From Simple Loans to Complex Systems. Asian Journal of Applied Sciences, 04(01), 87–94.

Chapra, M. U. (1979). The Islamic Welfare State and its Role in the Economy. Studies in Islamic Economics. Leicester, UK: The Islamic Foundation. https://doi.org/10.1017/CBO9781107415324.004

Elhachami, K., & Tkiouat, M. (2016). Towards an Agent-Based Modeling of the Consumer Goods Market. Asian Journal of Applied Sciences, 04(02), 276–285.

Epstein, J. M., & Axtell, R. (1996). Growing Artificial Societies. Massachusetts Avenue : MIT Press.

Freeman, T. R. (2005). From the Ground up: an Agent-based Model of Regional Structural Change. University of Saskatchewan. Retrieved from: https://www.dropbox.com/s/4r1zw7pur42hvu1/2005_Freeman_Thesis.pdf?dl=0

Gaffeo, E., Delli, D., & Desiderio, S. (2008). Adaptive Microfoundations for Emergent Macroeconomics, (3), 441–463. https://doi.org/10.1057/eej.2008.27

Hassanain, K., & Saaid, A.E. (2016). Zakah for Poverty Alleviation: Evidence from Sudan. International Research Journal of Finance and Economics, 1(154), 83–102. Retrieved from http://www.internationalresearchjournaloffinanceandeconomics.com

Hoque, N., Khan, M. A., & Mohammad, K. D. (2015). Poverty Alleviation by Zakah in a Transitional Economy: a Small Business Entrepreneurial Framework. Journal of Global Entrepreneurship Research, 5(7), 1–20. https://doi.org/10.1186/s40497-015-0025-8

Jaelani, A. (2016). Zakah Management for Poverty Alleviation in Indonesia and Brunei Darussalam. Turkish Economic Review, 3(3), 495–512. https://doi.org/10.1453/ter.v3i3.843

Jotwani, D.,(2014), The Role of Bank Credit as a Determinant of Economic Growth in India. Adarsh Journal of Management Research, 7(1). Available at: SSRN: https://ssrn.com/abstract=3195116

Kahf, M. (1999). The Principle of Socio-economic Justice in the Contemporary Fiqh of Zakah. IQTISAD Journal of Islamic Economics, 1–48. Retrieved from http://monzer.kahf.com/papers/english/socioeconomic_justice.pdf

Kasri, R. A., & Kassim, S. H. (2009). Empirical Determinants of Saving in the Islamic Banks: Evidence from Indonesia. Journal of King Abdulaziz University, Islamic Economics, 22(2), 181–201. https://doi.org/10.4197/islec.22-2.7

Kenourgios, D., and Samitas, A. (2007). Financial Development and Economic Growth in a Transition Economy : Evidence for Poland, 3(1).

Khasandy, E.A. and Badrudin, R. (2019). The Influence of Zakat on Economic Growth and Welfare Society in Indonesia. Integrated Journal of Business and Economics

King, R. G., & Rebelo, S. T. (1999). Resuscitating Real Business Cycles. Handbook of Macroeconomics, 1.

Lengnick, M. (2013). Agent-based Macroeconomics: A Baseline Model. Journal of Economic Behavior and Organization, 86, 102–120. https://doi.org/10.1016/j.jebo.2012.12.021

Mohamed, T., & Khadija, E. H. (2015). The Agent-Based Modeling of the Macroeconomic Behavior of Sharia-Compliant Companies. In International Congress on Islamic Economics and Finance (pp. 1–19). Sakarya.

Naciri, N., & Tkiouat, M. (2016). Economic Agent Based Models : Review. International Journal of Applied Engineering Research, 11(8), 5492–5502.

Nurlita, E., & Ekawaty, M. (2018). The Direct and Indirect Effect of Zakat on the Household Consumption of Mustahik (A Study of Zakat Recipients from BAZNAS Probolinggo Municipality). International Journal of Zakat, 3(2), 41-56. Retrieved from https://ijazbaznas.com/index.php/journal/article/view/77

Oh, Y. J. (2015). Agent-Based Network Modeling for the 2008 Financial Crisis and the Sluggish Recovery. The University of Texas at Dallas. https://doi.org/10.1017/CBO9781107415324.004

Ostry, J. D., Berg, A., & Tsangarides, C. G. (2014). Redistribution, Inequality, and Growth (IMF Staff Discussion Note No. SDN/14/02). Washington, DC: International Monetary Fund. Retrieved from imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf

Okaro, C.S.O. (2016). Deposit Money Banks' Credit and Nigerian Economic Growth and Development (1981-2015) (October 2016). NG-Journal of Social Development, 5(5). page numbers missingAvailable at SSRN: https://ssrn.com/abstract=2919807

Rahman, A. (2012). Wealth Adjustment Using a No-interest Credit Network in an Artificial Society. AI and Society, 27(4), 535–541. https://doi.org/10.1007/s00146-011-0365-z

Rahman, A., Setayeshi, S., & Zafarghandi, M. S. (2007). An Analysis to Wealth Distribution based on Sugarscape Model in an Artificial Society. International Journal of Engineering, 20(3), 133–137.

Rahman, A., Setayeshi, S., & Zafarghandi, M. S. (2009a). Wealth Adjustment in an Artificial Society, Based on a Sugarscape Model Using One Fifth of the Wealth Variable. Iranian Journal of Electrical and Computer Engineering, 8(1), 35–40.

Rahman, A., Setayeshi, S., & Zafarghandi, M. S. (2009b). Wealth Adjustment Using a Synergy between Communication, Cooperation, and One-Fifth of Wealth Variables in an Artificial Society. AI and Society, 24(2), 151–164. https://doi.org/10.1007/s00146-008-0186-x

Raz, A. (2013). The Nexus between Bank Credit Development and Economic Growth in Indonesia. DLSU Business and Economics Review, 23(1), 93-104. Available at SSRN: https://ssrn.com/abstract=3084067

Ridwan, M., Pimada, L., and Asnawi, N. (2019). Zakat Distribution and Macroeconomic Performance: Empirical Evidence of Indonesia. Int. J Sup. Chain. Mgt, 8(3),

Sarea, A. (2012). Zakat as a Benchmark to Evaluate Economic Growth : An Alternative Approach. International Journal of Business and Social Science, 3(18), 2010–2013.

Schelling, T. C. (1971). Dynamic Models of Segregation. Journal of Mathematical Sociology, 1, 143–186. https://doi.org/10.1080/0022250X.1971.9989794

Schelling, T. C. (1978). Micromotives and Macrobehaviors (1st ed.). Toronto: George J. McLeod Limited. https://doi.org/10.2307/2989930

Suprayitno, Eko & Kader, Radiah & Harun, Azhar. (2013). The Impact of Zakat on Aggregate Consumption in Malaysia. Journal of Islamic Economics, Banking and Finance, 9(1), 39 - 2. 10.12816/0001592. Ziauddin, A. (1990). Islam, Poverty and Income Distribution. Leicester, U.L.: The Islamic Foundation.

Tesfatsion, L. (2011). Agent-Based Computational Economics: Modelling Economies as Complex Adaptive Systems. Eastern Economic Journal, 37, 40–43. https://doi.org/10.1016/s0020-0255(02)00280-3

Timsina, N., & Pradhan, R. (2017). Effects of Bank Lending on Economic Growth in Nepal. Journal of Advanced Academic Research, 3(3), 53-75. https://doi.org/10.3126/jaar.v3i3.16810

Timsina, N. (2014). Impact of Bank Credit on Economic Growth in Nepal, NRB Working Paper 22/2014, Nepal Rastra Bank, Research Department.

Ugoani, J. (2013). Power of Bank Credit on Economic Growth: A Nigerian Perspective. International Journal of Financial Economics 1(3), 93-102. Available at SSRN: https://ssrn.com/abstract=2357439

Vaithilingam, S., Guru, B., & Shanmugam, B. (2003). Bank Lending and Economic Growth in Malaysia. Journal of Asia-Pacific Business, 5, 51-69. 10.1300/J098v05n01_05.

Wilensky, U., & Rand, W. (2015). An Introduction to Agent-Based Modeling: Modeling Natural, Social and Engineered Complex System with NetLogo. The MIT Press Massachusetts Institute of Technology.

How to Cite
Putriani, D., Ghani, G., & Kartiwi, M. (2020). EXPLORATION OF AGENT-BASED SIMULATION: THE MULTIPLIER EFFECT OF ZAKAH ON ECONOMIC GROWTH. Journal of Islamic Monetary Economics and Finance, 6(3). https://doi.org/10.21098/jimf.v6i3.1110