The Role of Zakat and Waqf in Macroeconomic Stability in Muslim Countries: A Qualitative Literature Analysis

Abstract

This study aims to analyze the role of zakat and waqf in supporting macroeconomic stability in Muslim countries through a qualitative literature-based approach. Economic inequality and persistent poverty indicate that economic growth alone is insufficient without effective redistributive and developmental instruments. Zakat functions as a short-term macroeconomic stabilizer by increasing the purchasing power of mustahik, smoothing consumption, strengthening aggregate demand, and reducing multidimensional poverty. Meanwhile, productive waqf contributes to long-term socio-economic development through capital formation, human capital enhancement, infrastructure provision, and support for productive economic activities. The literature synthesis demonstrates that the integration of zakat and waqf creates a balance between short-term redistribution and long-term investment, generating a stronger impact on inclusive growth and socio-economic resilience than the isolated operation of each instrument. However, their effectiveness remains constrained by institutional fragmentation, limited transparency and accountability, weak data integration, and insufficient alignment with national fiscal policy frameworks. This study underscores the importance of strengthening governance, regulatory harmonization, digital integration, and policy coordination to optimize zakat and waqf as strategic Islamic social finance instruments for sustainable macroeconomic stability.