Riba, Efficiency, and Prudential Regulation: Preliminary Thoughts
Why this work is in the frame
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Bibliographic record
Abstract
Recent years have witnessed the rapid growth 'Islamic Finance.' Islamic finance distinguishes itself from conventional finance through its adherence to the doctrines of peculiar Islamic commercial prohibitions, most famously the prohibition against riba. Although riba is commonly equated with interest, Islamic law does not condemn all types of interest. It is the ambiguous relationship of riba to interest that explains the paradoxical nature of Islamic finance: even as it condemns lending with interest, it endorses transactions that replicate the economics of interest-based lending, giving rise to the phenomenon of shari'a arbitrage. Islamic finance is thus a systematic strategy to exploit unresolved tensions within Islamic law regarding riba. This paper explores the legal puzzles that arise out of the various doctrines of riba in Islamic law and suggests that riba-based prohibitions can only be understood against a background rule that generally privileged market pricing mechanisms. From the perspective of contractual freedom, it is possible to break down riba into two sets of doctrines: ex ante prohibitions and ex post prohibitions. Only prohibitions that deal with bankrupt debtors should be understood as categorical, while the ex ante riba-based prohibitions are best understood as prophylactic or prudential measures that function as price-fixing measure in times of scarcity which tend to reinforce a baseline distribution of entitlements guaranteed by the system of zakat, a tax-and-transfer system that guaranteed all individuals a year's worth of provisions. Because the prohibition against interest-based lending is also a type of ex ante restriction on market pricing mechanisms, it follows that it should also be viewed as a prudential rule rather than a categorical one, thereby vitiating the need to engage in complex restructuring of conventional financial instruments to assure their consistency with Islamic law.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it