A critical review of the integration of zakat institution into the modern state: The case of Malaysia and Indonesia

The aim of this study is to critically analyze the secular policies of the nation-state as a public finance tool in the modern era. To achieve this goal, pre-modern and modern societies were evaluated, and the focus was on sovereignty, rights, and social structure. In this process, classical sources such as El-Shatibi, Al-Ghazali and Abu Ubeyd were used to explain the pre-modern structure, while contemporary authors such as Polanyi, Hallaq and Poggi were employed to analyze the transformation that occurred in modern times. Subsequently, the ontological evaluation of Zakat in modern public finance will be conducted using the framework of Islamic Political Economy, and the concept of Zakat will be examined in the context of Islamic economics. The process of embedding human social relationships into the market in Western Europe until the 18th century, which led to the crises experienced there, has also begun to occur in Muslim societies since the 20th century. These crises, which are inevitable for Muslims, pose an existential problem as an imported understanding. Zakat, charity, and atonement institutions are not only considered instruments of the religious establishment, but also have been financialized, sometimes with questionable content.