Waqf & Its Implications for the Modern Economy (Part 2)

Part 2: In this series of articles on IslamicBanker.com, renowned economist Murat Çizakça explores Waqf - one of the greatest institutions in Islamic history and how it can be revitalised. [Read Part 1 here]

Some readers will have noticed by the similarity between the historical cash awqaf and modern Islamic banks: both were designed originally to operate through mudarabah and both ended up utilizing, from the Islamic perspective, less preferable instruments. This cannot be a mere coincidence. What then were (are) the reasons behind this undesirable situation?

Although risk aversion must be a trait shared by both the trustees of the cash awqaf and modern Islamic bankers, the causes of risk aversion in history and today differ. Whereas t...