Benchmarking Islamic Finance-Enabling Policies

Abstract

The development of desirable and targeted policies should not occur in a vacuum. Policy makers must first determine their policy goals—be they healthcare, education, nutrition, income distribution, and the like. Then they should assess where the country stands. What are the areas of success and failures? Then devise efficient policies to achieve their desired goals and targets. In this process, an in between step, is to assess where the country stands relative to other countries. Such a benchmarking gives a more practical idea as to what is possible and how to get there. For instance, where does the country stand, relative to other countries, in eliminating poverty? Once extensive (in many dimensions) benchmarking is developed, the policy maker can look into which policies have succeeded in other countries and why. From this examination, the policy maker can devise policies that are best suited and most efficient in his country context.