Public finance instruments and state borrowing in Islamic law

To ensure a Muslim state maintains a balance between its revenues and expenditures and borrows money in accordance with Islamic law, it is crucial to have a comprehensive understanding of public finance, including its tools, conditions, and forms of borrowing used during the time of the Prophet and the khulafa-i rashidin. .This study aims to examine the tools of Islamic public finance that were applied in the classical period and to reveal their applicability today. It also aims to examine the forms of state borrowing under Islamic law, conduct a fiqh analysis of the borrowing tools used and to reveal alternative borrowing tools. Although there have been some studies on Islamic public finance, we have not found any independent works on Islamic state borrowing written in either the classical or modern period. Only a few sources and studies have mentioned borrowing instruments. The study divided into two parts. The first part deals with jizya and kharaj taxes, war revenues, zakat (almsgiving), revenues from underground and marine minerals, land allocations and salaries of public employees. The applicability of these tax types, which are mostly studied by making use of classical period works, has been emphasized and in this framework, it has been revealed that the head tax can be collected from non-Muslims living in Muslim countries and that the eight classes to which zakat can be given can be wider. The second part of the study discusses the state borrowing in the past periods, including its forms, causes, limits, parts, and instruments. It also includes a jurisprudential analysis of these instruments, borrowing models, and borrowing patterns of Saudi Arabia, Iran, Malaysia, and Pakistan from Muslim countries. Finally, alternative borrowing instruments in accordance with Islamic law, such as muqāraza (loan) and modern ashām,(portions) are discussed. As a result of the study, the applicability of classical Islamic public finance instruments today, the use of borrowing instruments in Muslim countries, which are not permissible according to Islamic jurists because they are considered interest-bearing, the development of some alternative instruments to state borrowing according to Islamic law, such as muqāraza and ashām, and the wider use of zakat will ease the burden of the state.