ZAKAT AND POVERTY ALLEVIATION IN INDONESIA: A PANEL ANALYSIS AT PROVINCIAL LEVEL
As a pillar of Islam and an instrument for poverty alleviation, zakat is perceived as an effective tool for tackling the problem of poverty in the Muslim world. However, whether zakat is effective in improving indicators of both quantity and quality of poverty is still a question requiring empirical...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Bank Indonesia
2020-09-01
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| Series: | Journal of Islamic Monetary Economics and Finance |
| Subjects: | |
| Online Access: | https://jimf-bi.org/index.php/JIMF/article/view/1122 |
| Summary: | As a pillar of Islam and an instrument for poverty alleviation, zakat is perceived as an
effective tool for tackling the problem of poverty in the Muslim world. However,
whether zakat is effective in improving indicators of both quantity and quality of
poverty is still a question requiring empirical investigation. This study is aims to
empirically investigate the role of impactful zakat in poverty alleviation as indicated by
the BAZNAS prosperity index (Indeks Kesejahteraan BAZNAS or IKB), at provincial
level in Indonesia. This study covers annual data from 28 provinces in Indonesia for
the years 2017 and 2018. Data analysis uses a panel-data approach, with three
indicators of poverty – the poverty headcount ratio (P0), poverty gap index (P1), and
poverty severity index (P2) – as dependent variables. The study finds that higher
BAZNAS IKB, used as a sign of impactful zakat, significantly reduces P0 but has
insignificant effect on P1 and P2. The results of this study imply that zakat managers
should put emphasis on the poorest section of the poor population to enable
improvements in poverty indicators through zakat utilization. |
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| ISSN: | 2460-6146 2460-6618 |