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Article
Publication date: 11 August 2020

Hanna Kociemska

This paper aims to describe cooperation between public and private market players from different legal and religious orders. The author argues that such public–private…

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Abstract

Purpose

This paper aims to describe cooperation between public and private market players from different legal and religious orders. The author argues that such public–private partnerships (PPPs) enable the development of a possible convergence between selected areas of mainstream public finance and the Islamic moral economy (IME).

Design/methodology/approach

This paper explores the theory of both mainstream finance and the IME, and using deductive reasoning from axioms, develops the assumptions of a theoretical approach to heterodox PPP. The proposed method affects the ability to find common platforms between mainstream public finance and the IME, through the example of public–private investment projects.

Findings

This endeavour is subject to trade-offs between profit maximisation and social justice values on the basis of long-term PPP contracts. The author shows the assumptions under which this compromise would be beneficial to public entities, multicultural societies and conventional and Islamic investors. It is proposed to distribute profit to the owners up to a predetermined value, above which the PPPs would finance public services for persons otherwise excluded from them.

Originality/value

The success of this approach must depend on a compromise between profit maximisation as the sole investment objective and investment guided by social justice values. Private investors can achieve a capped level of profit on a long-term contract basis, and public partners can obtain long-term contracts for providing public goods. Both would undertake a project with a strong emphasis on corporate social responsibility, with particularly large opportunities in developing Islamic countries.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 13 no. 4
Type: Research Article
ISSN: 1753-8394

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