This thesis examines the theory and principles of profit-sharing in the Islamic system of finance, and compares it to similar practices within non-Islamic systems. The initial chapters highlight the methodology and objectives of the work, and offer rationales for the existence of profit-sharing, the use of interest rates fixed in advance, and the rejection of riba .
This thesis focuses on the works of Muhammad Baqer as-Sadr pertaining to Islamic law. As background, the debate between the Akhbari and the Usuli schools of thought with regards to constitutional law in the 18th century is analyzed. Sadr's constitutional model for Iran, proposed in 1979, is examined, as are further constitutional law developments in the decade following the revolution.
The creation of an Islamic bank in Malaysia illustrates another example of supply-following economic policies that the Central Bank (Bank Negara) has implemented to promote financial development. The supply-leading policy follows from the concept that active government development of the financial system will stimulate economic growth. The savings generated from deposits to Bank