Financing Public Expenditure: An Islamic Perspective

The paper provides an Islamic perspective on the public revenue and expenditure balance and offers various Shariah compatible possibilities to alleviate the chronic imbalances between the two in the IDB member countries._x000D_ Governments require large amounts of resources for financing basic programs such as poverty reduction and maintenance of law and order. In most IDB member countries the required resources are not available. Therefore, in these countries large budget deficits have become a severe chronic problem. Things that can be done that can contribute to alleviating the mismatch between government revenues and expenditures:_x000D_ _x000D_ 1. All genuine expenditure of the government must be met through taxes and non-tax revenues. Deficit financing is not a good public policy for any government and under normal circumstances it should be avoided._x000D_ 2. There are a number of identifiable problems for the mismatch in government revenues and expenditures._x000D_ 3. It must be realized that the ""cl