The role of government in an Islamic economy

Abstract

This study attempts to analize the role of government in economy. It describes the Islamic history, then discusses the taxation in early Islamic period, finally it analyzes the problem of economic development. Islam recognises important role of government in an economy. It seems that the Prophet used to inspect the economy which provides sufficient proof that an Islamic economic government has a certain role to play in an economy. The government of the golden age also played the roles in their economies during their respectives period. It is mean that the government has responsiblity to their society. They have to ensure the fulfillment of basic needs and the general welfare of the society. Nevertheless the government verifies that the imposition of taxes does not kill work incentives of tax payers.