Timur Kuran
Encyclopedia
Timur Kuran is a Turkish
economist, Professor of Economics and Political Science
, and Gorter Family Professor in Islamic Studies
at Duke University
. His teaching and research draw on multiple disciplines, including economics, political science, history, and legal studies
.
at Yale University
, Kuran spent his early childhood in Ankara, where his father taught at the Middle East Technical University
. When he was a teenager, his family moved to Istanbul. For a decade, he lived just off the campus of Boğaziçi University
, where his father was president and professor of Islamic architectural history
.
Kuran obtained his secondary education in Turkey, graduating from Robert College
in Istanbul in 1973. He then studied economics at Princeton University
, graduating magna cum laude
in 1977. He went on to Stanford University
to obtain a doctorate in economics. His doctoral supervisor was Kenneth Arrow
, a Nobel laureate.
, perceptions of discrimination, and the evolution of morality. His best known theoretical work is Private Truths, Public Lies: The Social Consequences of Preference Falsification (Harvard University Press), which deals with the repercussions of being dishonest about what one knows and wants. Since its original publication in 1995, this book has appeared also in German, Swedish, Turkish, and Chinese.
Kuran has also written on Islam and the Middle East, with an initial focus on contemporary attempts to restructure economies according to Islamic teachings. Several of his essays on this topic are included in Islam and Mammon: The Economic Predicaments of Islamism (Princeton University Press), which has been translated into Turkish and Arabic. Since the mid-1990s he has turned his attention to the conundrum of why the Middle East, which once had a high standard of living
by global standards, subsequently fell behind in various realms, including economic production
, organizational capability, technological creativity, democratization, and military strength
.
His thesis is that the economic and educational institutions of Islam, though well-suited to the era in which they emerged, were poorly suited to a dynamic industrial economy. These institutions fostered social equilibria that reduced the likelihood of modern capitalism emerging from within Islamic civilization
. His recent articles have identified obstacles involving inheritance practices, contract law
, procedures of the courts, the absence of corporations, the financial system, and the delivery of social services.
From 1990 to 2008 Kuran served as editor of an interdisciplinary book series
published by the University of Michigan
Press. This series was re-established at Cambridge University Press
in 2009 under the title Cambridge Studies in Economics, Cognition and Society. He has served, or currently serves, on the editorial or advisory boards of numerous scholarly journals. He taught at University of Southern California
between 1982 and 2007, where he held the King Faisal professorship in Islamic thought
and culture from 1993 onwards. From 2005 to 2007, he was Director of USC's Institute for Economic Research on Civilizations, which he founded. In 1989–90 he was a member of the Institute for Advanced Study
in Princeton; in 1996–97 he held the John Olin visiting professorship at the Graduate School of Business, University of Chicago
; and in 2004–05 he was visiting professor
of economics at Stanford University. He is currently a member of the Executive Committee of the International Economic Association.
, and the political effects of Islam.
makes it harder for others to express discontent.
One socially significant consequence of preference falsification is thus widespread public support for social options that would be rejected decisively in a vote taken by secret ballot
. Privately unpopular policies may be retained indefinitely as people reproduce conformist social pressures through individual acts of preference falsification.
In falsifying preferences, people hide the knowledge on which it rests. In the process, they distort, corrupt, and impoverish the knowledge in the public domain. They make it harder for others to become informed about the drawbacks of existing arrangements and the merits of their alternatives. Another consequence of preference falsification is thus widespread ignorance about the advantages of change. Over long periods, preference falsification can dampen a community’s capacity to want change by bringing about intellectual narrowness and ossification.
The first of these consequences is driven by people’s need for social approval, the second by their reliance on each other for information.
Kuran has applied these observations to a range of contexts. He has used the theory developed in Private Truths, Public Lies to explain why major political revolutions catch us by surprise, how ethnic tensions can feed on themselves, why India’s caste system
has been a powerful social force for millennia, and why minor risks sometimes generate mass hysteria
.
communism in 1989 came as a massive surprise. Iran’s Islamic Revolution
of 1978–79 stunned the CIA, the KGB, the Shah of Iran
that it toppled, and even the Ayatollah Khomeini
, whom it catapulted to power. The Russian Revolution of 1917 stunned Lenin, the deposed Romanovs, and foreign diplomats stationed in St. Petersburg
. No one foresaw the French Revolution
of 1789, not even the rioters who brought it about. In each of these cases, a massive shift in political power occurred when long-submerged sentiments burst to the surface, with public opposition to the incumbent regime feeding on itself. Preference falsification explains why the incumbent regime appeared stable almost until the eve of its collapse. People ready to oppose it publicly kept their opposition private until a coincidence of factors gave them the motivation and the courage to bring their discontents out in the open. In switching sides, they encouraged other hidden opponents to join the opposition themselves. Through the resulting bandwagon process, fear changed sides. No longer did opponents of the old regime feel that they would be punished for being sincere; genuine supporters of the old regime started falsifying their preferences, pretending that the turn of events met their approval.
Timur Kuran first identified this mechanism in an April 1989 article entitled “Sparks and Prairie Fires: A Theory of Unanticipated Political Revolutions,” which offered the cases of 1789, 1917, and 1978–79 as examples of revolutions that stunned the world. A few months later, the pattern was repeated in Eastern Europe. Kuran proceeded to explain why seasoned experts of the communist bloc
were caught off guard in “Now Out of Never: The Element of Surprise in the East European Revolution of 1989,” published in 1991. These two papers, like related chapters of Private Truths, Public Lies, suggest that political revolutions and shifts in political opinion
in general will catch the world by surprise again and again, because of people’s readiness to conceal their political proclivities under perceived social pressures.
Asked in an interview whether he thinks that revolutions or counter-revolutions are imminent in the Islamic Middle East, he responded that although most Middle Eastern regimes are unstable due to lack of genuine legitimacy, the required shifts in Middle Eastern public opinion are unpredictable. If Middle Eastern regimes do collapse like a house of cards, he adds, most observers will be stunned, though there will be no shortage of commentators who will say “I told you so.”
s keep that hatred in check to avoid being punished for divisiveness. If political and economic shocks weaken those forces, a process of ethnification may get under way. Specifically, people may start highlighting their ethnic particularities and discriminating against ethnic others. The emerging social pressures will then lead to further ethnification, possibly leading to spiraling ethnic conflict.
Kuran uses this argument to explain how the former Yugoslavia
, once touted as the model of a civilized multiethnic nation, became ethnically segregated over a short period and dissolved into ethnically based enclaves at war with one another.
An implication of Kuran's analysis is that similarly developed countries
may exhibit very different levels of ethnic activity. Another is that ethnically based hatreds constitute by-products of ethnification rather than its mainspring.
Observing that the caste system survived for centuries with remarkably little use of force, Kuran attributes the persistence to preference falsification driven by the threat of ostracism. Because various castes were economically interdependent, individual castes could not break away from it, and individuals who challenged it were punished by all segments of society, including their fellow peers.
A related puzzle is the Hindu doctrine of karma
, which posits that a low-caste person will move into a higher caste in his next life if he accepts his deprivation and patiently fulfills the duties of his caste. Conversely, he will move down in rank if he rebels and fails to perform. Kuran attributes the ideological hold of the karma doctrine to distortions in relevant discourses induced by the knowledge falsification that accompanies preference falsification. Indian public discourses treated anticaste ideas as unthinkable, inducing people with egalitarian views to conceal from others their doubts about Hindu tenets.
This thesis provides a unified explanation for caste restrictions and caste ideology. Three chapters of Private Truths, Public Lies develop the full argument.
, initially through a 1999 article entitled “Availability Cascades and Risk Regulation.” An availability cascade is a process of collective belief
formation whereby an expressed perception triggers reactions that make that perception seem increasingly plausible through its rising availability in public discourse. The driving mechanism ordinarily involves a combination of informational and reputational motives. Individuals endorse the perception partly because they base their own beliefs on the apparent beliefs of others. The other motivation is social acceptance, which individuals achieve through preference falsification.
Kuran and Sunstein observe that availability entrepreneurs – activists who aim to control the content of public discourse – engineer availability cascades to further their own agendas. Their availability campaigns may do great harm. Many popular scares about innocuous products and insignificant dangers have been driven by campaigns that combine the spread of misinformation with the intimidation of doubters. Once public discourse turns in favor of the initiated agenda, fear feeds on itself, as expressed perceptions of danger shape the perceptions of others, and doubters silence themselves. Episodes of mass hysteria have lasting consequences for public policy
and the law.
Illustrating how availability cascades influence the regulation of risks associated with production, consumption, and the environment, Kuran and Sunstein have also proposed reforms to alleviate their adverse effects. These include new institutions to give policy makers better insulation against sudden mass demands for new market restrictions. They also include the implementation of product disparagement laws and the creation of an easily accessible scientific database to reduce people’s dependence on popular perceptions for information on risks whose accurate measurement requires advanced scientific techniques.
Economist David R. Hakes confessed to intentionally complicating a piece of research with excessive equations and proofs in order to obtain publication in an academic journal. The article had previously been rejected on grounds that the results were too "self-evident"; but after increasing the level of mathematical complexity and leaving the conclusions the same as before, the article was accepted for publication. Hakes' confession exposes the prevalence of preference falsification and is evident of the current status quo in academic economics.
Stephen Kinsella argues that teaching in the college classroom what one does not believe is another example of preference falsification. Having to conform to the predetermined curriculum is problematic for a professor who believes the theories presented in that curriculum to be greatly flawed and socially destructive if acted upon. This type of practice, Kinsella argues, is very familiar to many economists, and increased efforts to maintain academic freedom are necessary. He suggests a judicious use of course descriptions that preserves the widely accepted essential theories and allows preferential choice on theories where no general consensus exists.
William Patrick Leonard, a higher education administrator, writes of preference falsification in the balancing of university budgets. The common measures are enrollment and tuition increases, with little emphasis on cost-containment measures. He argues this is a result of opposition from faculty, who fear that cost-containment measures could threaten long standing traditions. This is subsequently met by little pressure from boards to contain costs.
Bruce Benson, Distinguished Professor at Florida State University, offers a narrative of his academic career, highlighting his shifting personalities of mathematical model-builder, econometrician, and political economist. In a sincere and introspective account, he draws out how a self-serving desire early in his career to be published in mainstream journals caused him to direct much effort toward the first two identities at the expense of the third. It took him 25 years to finally escape the influence of his preference falsification and embrace his truly preferred identity as a narrative political economist.
, literacy, or institutional creativity. Subsequently, it failed to match the institutional transformation through which western Europe vastly increased its capacity to pool resources, coordinate productive activities, and conduct exchanges. In a 1997 article entitled “Islam and Economic Underdevelopment: An Old Puzzle Revisited,” Kuran critiqued the leading explanations offered since the nineteenth century, and he has proceeded to develop a thesis of his own. His thesis centers on the role of Islamic institutions.
The economic institutions of the Middle East were well suited to the Middle Ages
, argues Kuran, and they never became frozen. However, during the second millennium
in certain areas central to economic modernization changes were minimal, at least in relation to the structural transformation of the West. In eighteenth-century Cairo and Istanbul, credit practices hardly differed from those of the 10th century. Likewise, investors and traders used atomistic enterprise forms essentially identical to those prevalent eight centuries earlier.
Several mechanisms contributed to the Middle East’s economic retardation, Kuran shows. Certain distinctly Middle Eastern institutions, including ones rooted in Islam, unintentionally blocked the transition to the modern economy. The institutions that generated evolutionary bottlenecks include: (1) the Islamic law
of inheritance, whose egalitarian character inhibited capital accumulation
, (2) the strict individualism
of Islamic law and its lack of a concept of corporation, which hindered organizational development
and contributed to keeping civil society
weak, and (3) the waqf, Islam’s distinct form of trust, which locked vast resources into inflexible organizations that tended to become dysfunctional over time. None of these institutions posed an economic disadvantage at the time of their emergence. Nor did they ever cause an absolute decline in economic activity. They turned into handicaps by perpetuating themselves during the long period when western Europe took the lead in developing the institutions of the modern economy.
Kuran’s article “Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation” (2004) develops the overall argument succinctly. The individual mechanisms receive detailed treatments in “The Islamic Commercial Crisis: Institutional Roots of Economic Underdevelopment in the Middle East” (2003), “The Absence of the Corporation in Islamic law: Origins and Persistence” (2005), and “The Provision of Public Goods
under Islamic Law: Origins, Impact, and Limitations of the Waqf System” (2001).
"In the year 1000, the economy of the Middle East was at least as advanced as that of Europe. But by 1800, the region had fallen dramatically behind—in living standards, technology, and economic institutions. In short, the Middle East had failed to modernize economically as the West surged ahead. What caused this long divergence? And why does the Middle East remain drastically underdeveloped compared with the West? The Long Divergence provides a new answer to these long-debated questions.
The book argues that what slowed the economic development of the Middle East was not colonialism or geography, still less Muslim attitudes or some incompatibility between Islam and capitalism. Rather, starting around the tenth century, Islamic legal institutions, which had benefitted the Middle Eastern economy in the early centuries of Islam, began to act as a drag on development by slowing or blocking the emergence of central features of modern economic life, including private capital accumulation, the corporation, large-scale production, and impersonal exchange. By the nineteenth century, modern economic institutions began to be transplanted to the Middle East, but its economy has not caught up. And there is no quick fix today. Low trust, rampant corruption, and weak civil societies—all characteristic of the region’s economies today and all legacies of its economic history—will take generations to overcome."
There is a discussion forum for this book on Facebook. Reviews include: "The Crescent and the Company," by Schumpeter in the Economist; "Is Islam the Problem?" by Nicholas Kristof of the New York Times; "The Long Divergence," by Ziauddin Sardar in the Independent; "Prophet Motive," by John Cassidy in the New Yorker; "Selling Out the Koran," by Chris Berg in the National Times of Australia; "Long Divergence," by L. Carl Brown in Foreign Affairs; "What Made the Middle East Fall Behind the West?," by Şahin Alpay in Today's Zaman; "Timur Kuran," by Tyler Cowen in the Marginal Revolution. Some answers to common questions on Nicholas Kristof's blog: "Questions from My Islam Column." Kai Ryssdal's radio interview on Marketplace: "Historical Roots of Middle Eastern Uprisings." An essay summarizing key arguments: "Legal Roots of Economic Underdevelopment in the Middle East," European Financial Review (Feb–Mar 2011): 10–11. Peter Passell provides a review and long excerpt in the Milken Institute Review, 13 (2011): 59–76.
s developed in the West, including capitalism and socialism. Its most visible practical achievement has been the establishment of Islamic banks meant to avoid interest. Islamic economics has also promoted Islamic norms of economic behavior
and founded redistribution systems modeled after early Islamic fiscal practices.
Timur Kuran argues that the doctrine of Islamic economics is simplistic, incoherent, and largely irrelevant to present economic challenges. Few Muslims take it seriously, he writes, and its practical applications have had no discernible effects on efficiency, growth, or poverty reduction
. In any case, its real purpose has not been economic improvement but, rather, the cultivation of a distinct Islamic identity to resist cultural globalization. It has served the cause of global Islamism
, known also as “Islamic fundamentalism
,” by fueling the illusion that Muslim societies have lived, or can live, by distinct economic rules.
These arguments are developed in a series of papers, most published between 1983 and 1998. A comprehensive statement is in his 2004 book Islam and Mammon.
, which differs from conventional banking in its aversion to interest. Islamic banks are supposed to avoid interest, on the ground that the Koran bans all forms of interest categorically. Since the 1970s, more than 60 countries have established Islamic banks.
Following Fazlur Rahman
, Kuran argues that the Koran bans the pre-Islamic
practice of riba, which involved the compounding of the debt of a borrower unable to make payment on schedule. Riba was a source of political instability, because it tended to push defaulters into enslavement. The interest that a modern bank charges on a loan, or that it offers to a depositor, involves no such danger. In any case, Kuran holds, interest is indispensable to economic life; it serves to allocate capital and risks efficiently. That is why no society, past or present, has managed to eradicate interest. Efforts to eliminate interest from financial transactions are futile, he says.
Several Kuran articles published in the 1990s documented that although many Islamic banks are profitable, they all give and take interest routinely, using ruses to make interest appear as a return to risk. Many of these ruses have roots in medieval practices. On this basis, he suggests that the significance of Islamic banking lies almost entirely in its symbolism and in the boost it gives to the global movement of Islamism.
Kuran’s thoughts on Islamic banking are developed most fully in his articles “The Economic Impact of Islamic Fundamentalism” (1993) and “Islamic Economics and the Islamic Subeconomy” (1995).
in Islamic Thought and Practice: A Historical Perspective,” he explores whether Islam, the region’s dominant religion, promotes a variant of the rule of law, defined to encompass government accountability, equal access to justice and the political process, efficient judicial and political system
s, clear laws, generally stable laws, and the protection of fundamental human rights. He reaches three conclusions. First, various early Islamic institutions were meant, in some respect, to serve one or more rule of law principles. Second, the institutions in question lost effectiveness over time. Finally, the relevant Islamic institutions are now generally out of date.
The Long Divergence: How Islamic Law Held Back the Middle East (Princeton: Princeton University Press
, 2010), 424 pp. link
Islam and Mammon: The Economic Predicaments of Islamism (Princeton: Princeton University Press
, 2004), xviii + 194 pp. Description and Chapter 1.link
Private Truths, Public Lies: The Social Consequences of Preference Falsification (Cambridge, Mass.: Harvard University Press
, 1995), xv + 423 pp. Description and scroll to chapter-preview links.
(Ed.) Mahkeme Kayıtları Işığında 17. Yüzyıl İstanbul’unda Sosyo-Ekonomik Yaşam / Social and Economic Life in Seventeenth-Century Istanbul: Glimpses from Court Records, 10 vols. (Istanbul: İş Bankası Kültür Yayınları, 2010–11 (Volumes 1–4 in print, 5–10 in press).
B. Articles and Essays
Op-ed on Arab uprisings: "The Politics of Revolutionary Surprise," Project Syndicate, February 2, 2011. (available in seven languages)
(paper with Scott Lustig) "Structural Inefficiencies of Islamic Courts: Ottoman Justice and Its Implications for Modern Economic Life“ (December 2010).
(paper with Anantdeep Singh) “The Transition to Corporate Life in Late British India: Hindu-Muslim Differences” (December 2010).
“Modern Islam and the Economy,” in New Cambridge History of Islam, vol. 6, general editor Michael Cook, volume editor Robert Hefner (Cambridge: Cambridge University Press, 2010), pp. 473–94.
"West is Best? Why Civilizations Rise and Fall." Foreign Affairs, 90 (January–February 2011): 159–63. Printer friendly version.
Entrepreneurship in Middle Eastern History: Inhibitive Roles of Islamic Institutions," in The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times, ed. William Baumol, David Landes & Joel Mokyr (Princeton University Press, 2010), pp. 62–87.
"Explaining the Economic Trajectories of Civilizations: The Systemic Approach," Journal of Economic Behavior and Organization, 71 (2009): 593–605.
"The Rule of Law in Islamic Thought and Practice: A Historical Perspective," in Global Perspectives on the Rule of Law, ed Robert Nelson
, (London: Routledge, 2009), pp. 71–89.
“The Scale of Entrepreneurship in Middle Eastern History: Inhibitive Roles of Islamic Institutions,” in Entrepreneurs and Entrepreneurship in Economic History, ed. William J. Baumol
, David S. Landes, and Joel Mokyr (Princeton: Princeton University Press, 2009), pp. 62–87.
“Modern Islam and the Economy,” in New Cambridge History of Islam vol. 6, gen. ed. Michael Cook
, vol. ed. Robert Hefner (Cambridge: Cambridge University Press, 2009), in press.
(with William H. Sandholm) “Cultural Integration and Its Discontents.” Review of Economic Studies, 75 (2008): 201–228
(with Edward McCaffery
) “Sex Differences in the Acceptability of Discrimination.” Political Research Quarterly, 61 (2008): 228–238.
“The Absence of the Corporation in Islamic Law: Origins and Persistence.” American Journal of Comparative Law, 53 (July 2005): 785–834.
“The Logic of Financial Westernization in the Middle East.” Journal of Economic Behavior and Organization, 56 (April 2005): 593–615
(with Edward McCaffery) “Expanding Discrimination Research: Beyond Ethnicity and to the Web.” Social Science Quarterly, 85 (September 2004): 713–30.
“Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation.” Journal of Economic Perspectives, 18 (Summer 2004): 71–90.
“The Economic Ascent of the Middle East's Religious Minorities: The Role of Islamic Legal Pluralism.” Journal of Legal Studies, 33 (June 2004): 475–515.
“Cultural Obstacles to Economic Development: Often Overstated, Usually Transitory,” in Culture and Public Action: Understanding the Role of Culture and Development Policy in an Unequal World, ed. Vijayendra Rao and Michael Walton (Stanford: Stanford University Press
, 2004), pp. 115–37.
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
economist, Professor of Economics and Political Science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
, and Gorter Family Professor in Islamic Studies
Islamic studies
In a Muslim context, Islamic studies can be an umbrella term for all virtually all of academia, both originally researched and as defined by the Islamization of knowledge...
at Duke University
Duke University
Duke University is a private research university located in Durham, North Carolina, United States. Founded by Methodists and Quakers in the present day town of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco industrialist James B...
. His teaching and research draw on multiple disciplines, including economics, political science, history, and legal studies
Law school
A law school is an institution specializing in legal education.- Law degrees :- Canada :...
.
Early life and education
Born in 1954 in New York City, where his parents lived while graduate studentsGraduate school
A graduate school is a school that awards advanced academic degrees with the general requirement that students must have earned a previous undergraduate degree...
at Yale University
Yale University
Yale University is a private, Ivy League university located in New Haven, Connecticut, United States. Founded in 1701 in the Colony of Connecticut, the university is the third-oldest institution of higher education in the United States...
, Kuran spent his early childhood in Ankara, where his father taught at the Middle East Technical University
Middle East Technical University
Middle East Technical University is a public technical university located in Ankara, Turkey...
. When he was a teenager, his family moved to Istanbul. For a decade, he lived just off the campus of Boğaziçi University
Bogaziçi University
Boğaziçi University is a public university located on the European side of the Bosphorus strait in Istanbul, Turkey. It has five faculties and two schools offering undergraduate degrees, and six institutes offering graduate degrees...
, where his father was president and professor of Islamic architectural history
Architectural History
Architectural History is the main journal of the Society of Architectural Historians of Great Britain .The journal is published each autumn. The architecture of the British Isles is a major theme of the journal, although it includes more general papers on the history of architecture. Member of...
.
Kuran obtained his secondary education in Turkey, graduating from Robert College
Robert College
Robert College of Istanbul , is one of the most selective independent private high schools in Turkey. Robert College is a co-educational, boarding school with a wooded campus on the European side of Istanbul between the two bridges on the Bosphorus, with the Arnavutköy district to the east, and...
in Istanbul in 1973. He then studied economics at Princeton University
Princeton University
Princeton University is a private research university located in Princeton, New Jersey, United States. The school is one of the eight universities of the Ivy League, and is one of the nine Colonial Colleges founded before the American Revolution....
, graduating magna cum laude
Latin honors
Latin honors are Latin phrases used to indicate the level of academic distinction with which an academic degree was earned. This system is primarily used in the United States, Canada, and in many countries of continental Europe, though some institutions also use the English translation of these...
in 1977. He went on to Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
to obtain a doctorate in economics. His doctoral supervisor was Kenneth Arrow
Kenneth Arrow
Kenneth Joseph Arrow is an American economist and joint winner of the Nobel Memorial Prize in Economics with John Hicks in 1972. To date, he is the youngest person to have received this award, at 51....
, a Nobel laureate.
Career
Professor Kuran has written extensively on the evolution of preferences and institutions, with contributions to the study of hidden preferences, the unpredictability of social revolutions, the dynamics of ethnic conflictEthnic war
An ethnic conflict or ethnic war is a conflict between ethnic groups often as a result of ethnic nationalism. They are of interest because of the apparent prevalence since the Cold War and because they frequently result in war crimes such as genocide...
, perceptions of discrimination, and the evolution of morality. His best known theoretical work is Private Truths, Public Lies: The Social Consequences of Preference Falsification (Harvard University Press), which deals with the repercussions of being dishonest about what one knows and wants. Since its original publication in 1995, this book has appeared also in German, Swedish, Turkish, and Chinese.
Kuran has also written on Islam and the Middle East, with an initial focus on contemporary attempts to restructure economies according to Islamic teachings. Several of his essays on this topic are included in Islam and Mammon: The Economic Predicaments of Islamism (Princeton University Press), which has been translated into Turkish and Arabic. Since the mid-1990s he has turned his attention to the conundrum of why the Middle East, which once had a high standard of living
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...
by global standards, subsequently fell behind in various realms, including economic production
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
, organizational capability, technological creativity, democratization, and military strength
Military
A military is an organization authorized by its greater society to use lethal force, usually including use of weapons, in defending its country by combating actual or perceived threats. The military may have additional functions of use to its greater society, such as advancing a political agenda e.g...
.
His thesis is that the economic and educational institutions of Islam, though well-suited to the era in which they emerged, were poorly suited to a dynamic industrial economy. These institutions fostered social equilibria that reduced the likelihood of modern capitalism emerging from within Islamic civilization
Muslim world
The term Muslim world has several meanings. In a religious sense, it refers to those who adhere to the teachings of Islam, referred to as Muslims. In a cultural sense, it refers to Islamic civilization, inclusive of non-Muslims living in that civilization...
. His recent articles have identified obstacles involving inheritance practices, contract law
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
, procedures of the courts, the absence of corporations, the financial system, and the delivery of social services.
From 1990 to 2008 Kuran served as editor of an interdisciplinary book series
Book series
A book series is a sequence of books having certain characteristics in common that are formally identified together as a group. Book series can be organized in different ways, such as written by the same author, or marketed as a group by their publisher....
published by the University of Michigan
University of Michigan
The University of Michigan is a public research university located in Ann Arbor, Michigan in the United States. It is the state's oldest university and the flagship campus of the University of Michigan...
Press. This series was re-established at Cambridge University Press
Cambridge University Press
Cambridge University Press is the publishing business of the University of Cambridge. Granted letters patent by Henry VIII in 1534, it is the world's oldest publishing house, and the second largest university press in the world...
in 2009 under the title Cambridge Studies in Economics, Cognition and Society. He has served, or currently serves, on the editorial or advisory boards of numerous scholarly journals. He taught at University of Southern California
University of Southern California
The University of Southern California is a private, not-for-profit, nonsectarian, research university located in Los Angeles, California, United States. USC was founded in 1880, making it California's oldest private research university...
between 1982 and 2007, where he held the King Faisal professorship in Islamic thought
Islamic philosophy
Islamic philosophy is a branch of Islamic studies. It is the continuous search for Hekma in the light of Islamic view of life, universe, ethics, society, and so on...
and culture from 1993 onwards. From 2005 to 2007, he was Director of USC's Institute for Economic Research on Civilizations, which he founded. In 1989–90 he was a member of the Institute for Advanced Study
Institute for Advanced Study
The Institute for Advanced Study, located in Princeton, New Jersey, United States, is an independent postgraduate center for theoretical research and intellectual inquiry. It was founded in 1930 by Abraham Flexner...
in Princeton; in 1996–97 he held the John Olin visiting professorship at the Graduate School of Business, University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
; and in 2004–05 he was visiting professor
Professor
A professor is a scholarly teacher; the precise meaning of the term varies by country. Literally, professor derives from Latin as a "person who professes" being usually an expert in arts or sciences; a teacher of high rank...
of economics at Stanford University. He is currently a member of the Executive Committee of the International Economic Association.
Research
Four themes stand out in Timur Kuran’s works: preference falsification, the role of Islam in the economic performance of the Middle East, Islamic economicsIslamic economics
Islamic economics refers to the body of Islamic studies literature that "identifies and promotes an economic order that conforms to Islamic scripture and traditions," and in the economic world an interest-free Islamic banking system, grounded in Sharia's condemnation of interest...
, and the political effects of Islam.
Preference Falsification
In articulating preferences, individuals frequently tailor their choices to what appears socially acceptable. In other words, they convey preferences that differ from what they genuinely want. Kuran calls the resulting misrepresentation “preference falsification.” In his 1995 book, Private Truths, Public Lies, he argues that the phenomenon is ubiquitous and that it has huge social and political consequences. These consequences all hinge on interdependencies between individual decisions as to what preference to convey publicly. A person who hides his discontent about a fashion, policy, or political regimeForm of government
A form of government, or form of state governance, refers to the set of political institutions by which a government of a state is organized. Synonyms include "regime type" and "system of government".-Empirical and conceptual problems:...
makes it harder for others to express discontent.
One socially significant consequence of preference falsification is thus widespread public support for social options that would be rejected decisively in a vote taken by secret ballot
Secret ballot
The secret ballot is a voting method in which a voter's choices in an election or a referendum are anonymous. The key aim is to ensure the voter records a sincere choice by forestalling attempts to influence the voter by intimidation or bribery. The system is one means of achieving the goal of...
. Privately unpopular policies may be retained indefinitely as people reproduce conformist social pressures through individual acts of preference falsification.
In falsifying preferences, people hide the knowledge on which it rests. In the process, they distort, corrupt, and impoverish the knowledge in the public domain. They make it harder for others to become informed about the drawbacks of existing arrangements and the merits of their alternatives. Another consequence of preference falsification is thus widespread ignorance about the advantages of change. Over long periods, preference falsification can dampen a community’s capacity to want change by bringing about intellectual narrowness and ossification.
The first of these consequences is driven by people’s need for social approval, the second by their reliance on each other for information.
Kuran has applied these observations to a range of contexts. He has used the theory developed in Private Truths, Public Lies to explain why major political revolutions catch us by surprise, how ethnic tensions can feed on themselves, why India’s caste system
Caste
Caste is an elaborate and complex social system that combines elements of endogamy, occupation, culture, social class, tribal affiliation and political power. It should not be confused with race or social class, e.g. members of different castes in one society may belong to the same race, as in India...
has been a powerful social force for millennia, and why minor risks sometimes generate mass hysteria
Collective hysteria
Mass hysteria—other names include collective hysteria, group hysteria, or collective obsessional behavior—is the manifestation of the same or similar hysterical symptoms by more than one person. A common manifestation of mass hysteria occurs when a group of people believe they are suffering from a...
.
Unanticipated Revolutions
The fall of East EuropeanEastern Europe
Eastern Europe is the eastern part of Europe. The term has widely disparate geopolitical, geographical, cultural and socioeconomic readings, which makes it highly context-dependent and even volatile, and there are "almost as many definitions of Eastern Europe as there are scholars of the region"...
communism in 1989 came as a massive surprise. Iran’s Islamic Revolution
Iranian Revolution
The Iranian Revolution refers to events involving the overthrow of Iran's monarchy under Shah Mohammad Reza Pahlavi and its replacement with an Islamic republic under Ayatollah Ruhollah Khomeini, the leader of the...
of 1978–79 stunned the CIA, the KGB, the Shah of Iran
Mohammad Reza Pahlavi
Mohammad Rezā Shāh Pahlavi, Shah of Iran, Shah of Persia , ruled Iran from 16 September 1941 until his overthrow by the Iranian Revolution on 11 February 1979...
that it toppled, and even the Ayatollah Khomeini
Ruhollah Khomeini
Grand Ayatollah Sayyed Ruhollah Musavi Khomeini was an Iranian religious leader and politician, and leader of the 1979 Iranian Revolution which saw the overthrow of Mohammad Reza Pahlavi, the Shah of Iran...
, whom it catapulted to power. The Russian Revolution of 1917 stunned Lenin, the deposed Romanovs, and foreign diplomats stationed in St. Petersburg
Saint Petersburg
Saint Petersburg is a city and a federal subject of Russia located on the Neva River at the head of the Gulf of Finland on the Baltic Sea...
. No one foresaw the French Revolution
French Revolution
The French Revolution , sometimes distinguished as the 'Great French Revolution' , was a period of radical social and political upheaval in France and Europe. The absolute monarchy that had ruled France for centuries collapsed in three years...
of 1789, not even the rioters who brought it about. In each of these cases, a massive shift in political power occurred when long-submerged sentiments burst to the surface, with public opposition to the incumbent regime feeding on itself. Preference falsification explains why the incumbent regime appeared stable almost until the eve of its collapse. People ready to oppose it publicly kept their opposition private until a coincidence of factors gave them the motivation and the courage to bring their discontents out in the open. In switching sides, they encouraged other hidden opponents to join the opposition themselves. Through the resulting bandwagon process, fear changed sides. No longer did opponents of the old regime feel that they would be punished for being sincere; genuine supporters of the old regime started falsifying their preferences, pretending that the turn of events met their approval.
Timur Kuran first identified this mechanism in an April 1989 article entitled “Sparks and Prairie Fires: A Theory of Unanticipated Political Revolutions,” which offered the cases of 1789, 1917, and 1978–79 as examples of revolutions that stunned the world. A few months later, the pattern was repeated in Eastern Europe. Kuran proceeded to explain why seasoned experts of the communist bloc
Eastern bloc
The term Eastern Bloc or Communist Bloc refers to the former communist states of Eastern and Central Europe, generally the Soviet Union and the countries of the Warsaw Pact...
were caught off guard in “Now Out of Never: The Element of Surprise in the East European Revolution of 1989,” published in 1991. These two papers, like related chapters of Private Truths, Public Lies, suggest that political revolutions and shifts in political opinion
Freedom of thought
Freedom of thought is the freedom of an individual to hold or consider a fact, viewpoint, or thought, independent of others' viewpoints....
in general will catch the world by surprise again and again, because of people’s readiness to conceal their political proclivities under perceived social pressures.
Asked in an interview whether he thinks that revolutions or counter-revolutions are imminent in the Islamic Middle East, he responded that although most Middle Eastern regimes are unstable due to lack of genuine legitimacy, the required shifts in Middle Eastern public opinion are unpredictable. If Middle Eastern regimes do collapse like a house of cards, he adds, most observers will be stunned, though there will be no shortage of commentators who will say “I told you so.”
Ethnification and Ethnic Conflict
Through a series of articles published in the late 1990s, including "Ethnic Norms and Their Transformation through Reputational Cascades" (1998), Kuran applied the concept of preference falsification to ethnic relations, with a focus on "ethnification," the process whereby ethnic origins, ethnic symbols, and ethnic ties gain salience and practical significance. In most societies, he observes, ethnicity serves as a source of identity without preventing cooperation, exchanges, socializing and intermarriage across ethnic boundaries. Such societies generate social forces that preserve that condition. People with hatred toward other ethnic groupEthnic group
An ethnic group is a group of people whose members identify with each other, through a common heritage, often consisting of a common language, a common culture and/or an ideology that stresses common ancestry or endogamy...
s keep that hatred in check to avoid being punished for divisiveness. If political and economic shocks weaken those forces, a process of ethnification may get under way. Specifically, people may start highlighting their ethnic particularities and discriminating against ethnic others. The emerging social pressures will then lead to further ethnification, possibly leading to spiraling ethnic conflict.
Kuran uses this argument to explain how the former Yugoslavia
Socialist Federal Republic of Yugoslavia
The Socialist Federal Republic of Yugoslavia was the Yugoslav state that existed from the abolition of the Yugoslav monarchy until it was dissolved in 1992 amid the Yugoslav Wars. It was a socialist state and a federation made up of six socialist republics: Bosnia and Herzegovina, Croatia,...
, once touted as the model of a civilized multiethnic nation, became ethnically segregated over a short period and dissolved into ethnically based enclaves at war with one another.
An implication of Kuran's analysis is that similarly developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
may exhibit very different levels of ethnic activity. Another is that ethnically based hatreds constitute by-products of ethnification rather than its mainspring.
The Perseverance of India’s Caste System
India’s caste system is often cited as an example of cultural petrification. For more than two millennia it has divided Indian society into ranked occupational units known as castes, surviving invasions as well as the spread of Islam and Christianity. Although discrimination against low-ranked castes is now illegal, caste norms remain a powerful force in Indian life.Observing that the caste system survived for centuries with remarkably little use of force, Kuran attributes the persistence to preference falsification driven by the threat of ostracism. Because various castes were economically interdependent, individual castes could not break away from it, and individuals who challenged it were punished by all segments of society, including their fellow peers.
A related puzzle is the Hindu doctrine of karma
Karma in Hinduism
Karma is a concept in Hinduism which explains causality through a system where beneficial effects are derived from past beneficial actions and harmful effects from past harmful actions, creating a system of actions and reactions throughout a soul's reincarnated lives forming a cycle of rebirth...
, which posits that a low-caste person will move into a higher caste in his next life if he accepts his deprivation and patiently fulfills the duties of his caste. Conversely, he will move down in rank if he rebels and fails to perform. Kuran attributes the ideological hold of the karma doctrine to distortions in relevant discourses induced by the knowledge falsification that accompanies preference falsification. Indian public discourses treated anticaste ideas as unthinkable, inducing people with egalitarian views to conceal from others their doubts about Hindu tenets.
This thesis provides a unified explanation for caste restrictions and caste ideology. Three chapters of Private Truths, Public Lies develop the full argument.
Availability Cascades and Risk Regulation
“Availability cascade” is a concept that Timur Kuran developed jointly with Cass SunsteinCass Sunstein
Cass R. Sunstein is an American legal scholar, particularly in the fields of constitutional law, administrative law, environmental law, and law and behavioral economics, who currently is the Administrator of the White House Office of Information and Regulatory Affairs in the Obama administration...
, initially through a 1999 article entitled “Availability Cascades and Risk Regulation.” An availability cascade is a process of collective belief
Collective belief
A collective belief is referred to when people speak of what 'we' believe when this is not simply elliptical for what 'we all' believe.Sociologist Émile Durkheim wrote of collective beliefs and proposed that they, like all 'social facts', 'inhered in' social groups as opposed to individual persons...
formation whereby an expressed perception triggers reactions that make that perception seem increasingly plausible through its rising availability in public discourse. The driving mechanism ordinarily involves a combination of informational and reputational motives. Individuals endorse the perception partly because they base their own beliefs on the apparent beliefs of others. The other motivation is social acceptance, which individuals achieve through preference falsification.
Kuran and Sunstein observe that availability entrepreneurs – activists who aim to control the content of public discourse – engineer availability cascades to further their own agendas. Their availability campaigns may do great harm. Many popular scares about innocuous products and insignificant dangers have been driven by campaigns that combine the spread of misinformation with the intimidation of doubters. Once public discourse turns in favor of the initiated agenda, fear feeds on itself, as expressed perceptions of danger shape the perceptions of others, and doubters silence themselves. Episodes of mass hysteria have lasting consequences for public policy
Public policy
Public policy as government action is generally the principled guide to action taken by the administrative or executive branches of the state with regard to a class of issues in a manner consistent with law and institutional customs. In general, the foundation is the pertinent national and...
and the law.
Illustrating how availability cascades influence the regulation of risks associated with production, consumption, and the environment, Kuran and Sunstein have also proposed reforms to alleviate their adverse effects. These include new institutions to give policy makers better insulation against sudden mass demands for new market restrictions. They also include the implementation of product disparagement laws and the creation of an easily accessible scientific database to reduce people’s dependence on popular perceptions for information on risks whose accurate measurement requires advanced scientific techniques.
Other Contributions
Econ Journal Watch, in September 2009, published a series of four introspective essays on preference falsification in the economics profession.Economist David R. Hakes confessed to intentionally complicating a piece of research with excessive equations and proofs in order to obtain publication in an academic journal. The article had previously been rejected on grounds that the results were too "self-evident"; but after increasing the level of mathematical complexity and leaving the conclusions the same as before, the article was accepted for publication. Hakes' confession exposes the prevalence of preference falsification and is evident of the current status quo in academic economics.
Stephen Kinsella argues that teaching in the college classroom what one does not believe is another example of preference falsification. Having to conform to the predetermined curriculum is problematic for a professor who believes the theories presented in that curriculum to be greatly flawed and socially destructive if acted upon. This type of practice, Kinsella argues, is very familiar to many economists, and increased efforts to maintain academic freedom are necessary. He suggests a judicious use of course descriptions that preserves the widely accepted essential theories and allows preferential choice on theories where no general consensus exists.
William Patrick Leonard, a higher education administrator, writes of preference falsification in the balancing of university budgets. The common measures are enrollment and tuition increases, with little emphasis on cost-containment measures. He argues this is a result of opposition from faculty, who fear that cost-containment measures could threaten long standing traditions. This is subsequently met by little pressure from boards to contain costs.
Bruce Benson, Distinguished Professor at Florida State University, offers a narrative of his academic career, highlighting his shifting personalities of mathematical model-builder, econometrician, and political economist. In a sincere and introspective account, he draws out how a self-serving desire early in his career to be published in mainstream journals caused him to direct much effort toward the first two identities at the expense of the third. It took him 25 years to finally escape the influence of his preference falsification and embrace his truly preferred identity as a narrative political economist.
Islam and Economic Development of the Middle East
The Middle East was once an economically advanced region of the world, as measured by standard of living, technology, agricultural productivityAgricultural productivity
Agricultural productivity is measured as the ratio of agricultural outputs to agricultural inputs. While individual products are usually measured by weight, their varying densities make measuring overall agricultural output difficult...
, literacy, or institutional creativity. Subsequently, it failed to match the institutional transformation through which western Europe vastly increased its capacity to pool resources, coordinate productive activities, and conduct exchanges. In a 1997 article entitled “Islam and Economic Underdevelopment: An Old Puzzle Revisited,” Kuran critiqued the leading explanations offered since the nineteenth century, and he has proceeded to develop a thesis of his own. His thesis centers on the role of Islamic institutions.
The economic institutions of the Middle East were well suited to the Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
, argues Kuran, and they never became frozen. However, during the second millennium
2nd millennium
File:2nd millennium montage.png|From left, clockwise: In 1492, Christopher Columbus; The American Revolution; The French Revolution; The Atomic Bomb from World War II; An alternate source of light, the Light Bulb; For the first time, a human being sets foot on the moon in 1969 during the Apollo 11...
in certain areas central to economic modernization changes were minimal, at least in relation to the structural transformation of the West. In eighteenth-century Cairo and Istanbul, credit practices hardly differed from those of the 10th century. Likewise, investors and traders used atomistic enterprise forms essentially identical to those prevalent eight centuries earlier.
Several mechanisms contributed to the Middle East’s economic retardation, Kuran shows. Certain distinctly Middle Eastern institutions, including ones rooted in Islam, unintentionally blocked the transition to the modern economy. The institutions that generated evolutionary bottlenecks include: (1) the Islamic law
Sharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
of inheritance, whose egalitarian character inhibited capital accumulation
Capital accumulation
The accumulation of capital refers to the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth. Capital is money or a financial asset invested for the purpose of making more money...
, (2) the strict individualism
Individualism
Individualism is the moral stance, political philosophy, ideology, or social outlook that stresses "the moral worth of the individual". Individualists promote the exercise of one's goals and desires and so value independence and self-reliance while opposing most external interference upon one's own...
of Islamic law and its lack of a concept of corporation, which hindered organizational development
Organization development
Organization development is a new term which means a conceptual, organization-wide effort to increase an organization's effectiveness and viability...
and contributed to keeping civil society
Civil society
Civil society is composed of the totality of many voluntary social relationships, civic and social organizations, and institutions that form the basis of a functioning society, as distinct from the force-backed structures of a state , the commercial institutions of the market, and private criminal...
weak, and (3) the waqf, Islam’s distinct form of trust, which locked vast resources into inflexible organizations that tended to become dysfunctional over time. None of these institutions posed an economic disadvantage at the time of their emergence. Nor did they ever cause an absolute decline in economic activity. They turned into handicaps by perpetuating themselves during the long period when western Europe took the lead in developing the institutions of the modern economy.
Kuran’s article “Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation” (2004) develops the overall argument succinctly. The individual mechanisms receive detailed treatments in “The Islamic Commercial Crisis: Institutional Roots of Economic Underdevelopment in the Middle East” (2003), “The Absence of the Corporation in Islamic law: Origins and Persistence” (2005), and “The Provision of Public Goods
Public good
In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...
under Islamic Law: Origins, Impact, and Limitations of the Waqf System” (2001).
The Long Divergence
In 2011, Kuran published "The Long Divergence: How Islamic Law Held Back the Middle East" summarizing his arguments on the institutional roots of the Middle East's economic stagnation. As the blurb states:"In the year 1000, the economy of the Middle East was at least as advanced as that of Europe. But by 1800, the region had fallen dramatically behind—in living standards, technology, and economic institutions. In short, the Middle East had failed to modernize economically as the West surged ahead. What caused this long divergence? And why does the Middle East remain drastically underdeveloped compared with the West? The Long Divergence provides a new answer to these long-debated questions.
The book argues that what slowed the economic development of the Middle East was not colonialism or geography, still less Muslim attitudes or some incompatibility between Islam and capitalism. Rather, starting around the tenth century, Islamic legal institutions, which had benefitted the Middle Eastern economy in the early centuries of Islam, began to act as a drag on development by slowing or blocking the emergence of central features of modern economic life, including private capital accumulation, the corporation, large-scale production, and impersonal exchange. By the nineteenth century, modern economic institutions began to be transplanted to the Middle East, but its economy has not caught up. And there is no quick fix today. Low trust, rampant corruption, and weak civil societies—all characteristic of the region’s economies today and all legacies of its economic history—will take generations to overcome."
There is a discussion forum for this book on Facebook. Reviews include: "The Crescent and the Company," by Schumpeter in the Economist; "Is Islam the Problem?" by Nicholas Kristof of the New York Times; "The Long Divergence," by Ziauddin Sardar in the Independent; "Prophet Motive," by John Cassidy in the New Yorker; "Selling Out the Koran," by Chris Berg in the National Times of Australia; "Long Divergence," by L. Carl Brown in Foreign Affairs; "What Made the Middle East Fall Behind the West?," by Şahin Alpay in Today's Zaman; "Timur Kuran," by Tyler Cowen in the Marginal Revolution. Some answers to common questions on Nicholas Kristof's blog: "Questions from My Islam Column." Kai Ryssdal's radio interview on Marketplace: "Historical Roots of Middle Eastern Uprisings." An essay summarizing key arguments: "Legal Roots of Economic Underdevelopment in the Middle East," European Financial Review (Feb–Mar 2011): 10–11. Peter Passell provides a review and long excerpt in the Milken Institute Review, 13 (2011): 59–76.
Islamic Economics
Islamic economics is a modern doctrine that claims to offer an alternative to economic systemEconomic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
s developed in the West, including capitalism and socialism. Its most visible practical achievement has been the establishment of Islamic banks meant to avoid interest. Islamic economics has also promoted Islamic norms of economic behavior
Behavioral finance
Behavioral economics and its related area of study, behavioral finance, use social, cognitive and emotional factors in understanding the economic decisions of individuals and institutions performing economic functions, including consumers, borrowers and investors, and their effects on market...
and founded redistribution systems modeled after early Islamic fiscal practices.
Timur Kuran argues that the doctrine of Islamic economics is simplistic, incoherent, and largely irrelevant to present economic challenges. Few Muslims take it seriously, he writes, and its practical applications have had no discernible effects on efficiency, growth, or poverty reduction
Poverty reduction
Poverty is the state of human beings who are poor. That is, they have little or no material means of surviving—little or no food, shelter, clothes, healthcare, education, and other physical means of living and improving one's life....
. In any case, its real purpose has not been economic improvement but, rather, the cultivation of a distinct Islamic identity to resist cultural globalization. It has served the cause of global Islamism
Islamism
Islamism also , lit., "Political Islam" is set of ideologies holding that Islam is not only a religion but also a political system. Islamism is a controversial term, and definitions of it sometimes vary...
, known also as “Islamic fundamentalism
Fundamentalism
Fundamentalism is strict adherence to specific theological doctrines usually understood as a reaction against Modernist theology. The term "fundamentalism" was originally coined by its supporters to describe a specific package of theological beliefs that developed into a movement within the...
,” by fueling the illusion that Muslim societies have lived, or can live, by distinct economic rules.
These arguments are developed in a series of papers, most published between 1983 and 1998. A comprehensive statement is in his 2004 book Islam and Mammon.
Islamic Banking
The most visible achievement of Islamic economics has been Islamic bankingIslamic banking
Islamic banking is banking or banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money...
, which differs from conventional banking in its aversion to interest. Islamic banks are supposed to avoid interest, on the ground that the Koran bans all forms of interest categorically. Since the 1970s, more than 60 countries have established Islamic banks.
Following Fazlur Rahman
Fazlur Rahman
Fazlur Rahman Malik was a well-known scholar of Islam; M. Yahya Birt of the Association of Islam Researchers described him as "probably the most learned of the major Muslim thinkers in the second-half of the twentieth century, in terms of both classical Islam and Western philosophical and...
, Kuran argues that the Koran bans the pre-Islamic
Jahiliyyah
Jahiliyyah is an Islamic concept of "ignorance of divine guidance" or "the state of ignorance of the guidance from God" or "Days of Ignorance" referring to the condition in which Arabs found themselves in pre-Islamic Arabia, i.e. prior to the revelation of the Qur'an to Muhammad...
practice of riba, which involved the compounding of the debt of a borrower unable to make payment on schedule. Riba was a source of political instability, because it tended to push defaulters into enslavement. The interest that a modern bank charges on a loan, or that it offers to a depositor, involves no such danger. In any case, Kuran holds, interest is indispensable to economic life; it serves to allocate capital and risks efficiently. That is why no society, past or present, has managed to eradicate interest. Efforts to eliminate interest from financial transactions are futile, he says.
Several Kuran articles published in the 1990s documented that although many Islamic banks are profitable, they all give and take interest routinely, using ruses to make interest appear as a return to risk. Many of these ruses have roots in medieval practices. On this basis, he suggests that the significance of Islamic banking lies almost entirely in its symbolism and in the boost it gives to the global movement of Islamism.
Kuran’s thoughts on Islamic banking are developed most fully in his articles “The Economic Impact of Islamic Fundamentalism” (1993) and “Islamic Economics and the Islamic Subeconomy” (1995).
Islam and Political Underdevelopment
Kuran has recently taken up the puzzle of why most Middle Eastern countries are governed autocratically. In a 2009 paper, “The Rule of LawRule of law
The rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...
in Islamic Thought and Practice: A Historical Perspective,” he explores whether Islam, the region’s dominant religion, promotes a variant of the rule of law, defined to encompass government accountability, equal access to justice and the political process, efficient judicial and political system
Political system
A political system is a system of politics and government. It is usually compared to the legal system, economic system, cultural system, and other social systems...
s, clear laws, generally stable laws, and the protection of fundamental human rights. He reaches three conclusions. First, various early Islamic institutions were meant, in some respect, to serve one or more rule of law principles. Second, the institutions in question lost effectiveness over time. Finally, the relevant Islamic institutions are now generally out of date.
Main Publications
A. BooksThe Long Divergence: How Islamic Law Held Back the Middle East (Princeton: Princeton University Press
Princeton University Press
-Further reading:* "". Artforum International, 2005.-External links:* * * * *...
, 2010), 424 pp. link
Islam and Mammon: The Economic Predicaments of Islamism (Princeton: Princeton University Press
Princeton University Press
-Further reading:* "". Artforum International, 2005.-External links:* * * * *...
, 2004), xviii + 194 pp. Description and Chapter 1.link
Private Truths, Public Lies: The Social Consequences of Preference Falsification (Cambridge, Mass.: Harvard University Press
Harvard University Press
Harvard University Press is a publishing house established on January 13, 1913, as a division of Harvard University, and focused on academic publishing. In 2005, it published 220 new titles. It is a member of the Association of American University Presses. Its current director is William P...
, 1995), xv + 423 pp. Description and scroll to chapter-preview links.
(Ed.) Mahkeme Kayıtları Işığında 17. Yüzyıl İstanbul’unda Sosyo-Ekonomik Yaşam / Social and Economic Life in Seventeenth-Century Istanbul: Glimpses from Court Records, 10 vols. (Istanbul: İş Bankası Kültür Yayınları, 2010–11 (Volumes 1–4 in print, 5–10 in press).
B. Articles and Essays
Op-ed on Arab uprisings: "The Politics of Revolutionary Surprise," Project Syndicate, February 2, 2011. (available in seven languages)
(paper with Scott Lustig) "Structural Inefficiencies of Islamic Courts: Ottoman Justice and Its Implications for Modern Economic Life“ (December 2010).
(paper with Anantdeep Singh) “The Transition to Corporate Life in Late British India: Hindu-Muslim Differences” (December 2010).
“Modern Islam and the Economy,” in New Cambridge History of Islam, vol. 6, general editor Michael Cook, volume editor Robert Hefner (Cambridge: Cambridge University Press, 2010), pp. 473–94.
"West is Best? Why Civilizations Rise and Fall." Foreign Affairs, 90 (January–February 2011): 159–63. Printer friendly version.
Entrepreneurship in Middle Eastern History: Inhibitive Roles of Islamic Institutions," in The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times, ed. William Baumol, David Landes & Joel Mokyr (Princeton University Press, 2010), pp. 62–87.
"Explaining the Economic Trajectories of Civilizations: The Systemic Approach," Journal of Economic Behavior and Organization, 71 (2009): 593–605.
"The Rule of Law in Islamic Thought and Practice: A Historical Perspective," in Global Perspectives on the Rule of Law, ed Robert Nelson
Robert Nelson
Robert Nelson was an Anglo-Quebecer physician and a leading figure in the Lower Canada Rebellion in 19th century Quebec ....
, (London: Routledge, 2009), pp. 71–89.
“The Scale of Entrepreneurship in Middle Eastern History: Inhibitive Roles of Islamic Institutions,” in Entrepreneurs and Entrepreneurship in Economic History, ed. William J. Baumol
William Baumol
William Jack Baumol is an American economist. He is a professor of economics at New York University and is also affiliated with Princeton University. Baumol has written extensively about labor market and other economic factors that affect the economy. He also made valuable contributions to the...
, David S. Landes, and Joel Mokyr (Princeton: Princeton University Press, 2009), pp. 62–87.
“Modern Islam and the Economy,” in New Cambridge History of Islam vol. 6, gen. ed. Michael Cook
Michael Cook (historian)
Michael Allan Cook is an English-Scottish historian and scholar of Islamic history. He has co-authored a book with Patricia Crone, notably Hagarism: The Making of the Islamic World....
, vol. ed. Robert Hefner (Cambridge: Cambridge University Press, 2009), in press.
(with William H. Sandholm) “Cultural Integration and Its Discontents.” Review of Economic Studies, 75 (2008): 201–228
(with Edward McCaffery
Edward McCaffery
Edward McCaffery is a tax law professor at the University of Southern California Law School and also a visiting professor of Law and Economics at the California Institute of Technology. At USC he is Robert C...
) “Sex Differences in the Acceptability of Discrimination.” Political Research Quarterly, 61 (2008): 228–238.
“The Absence of the Corporation in Islamic Law: Origins and Persistence.” American Journal of Comparative Law, 53 (July 2005): 785–834.
“The Logic of Financial Westernization in the Middle East.” Journal of Economic Behavior and Organization, 56 (April 2005): 593–615
(with Edward McCaffery) “Expanding Discrimination Research: Beyond Ethnicity and to the Web.” Social Science Quarterly, 85 (September 2004): 713–30.
“Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation.” Journal of Economic Perspectives, 18 (Summer 2004): 71–90.
“The Economic Ascent of the Middle East's Religious Minorities: The Role of Islamic Legal Pluralism.” Journal of Legal Studies, 33 (June 2004): 475–515.
“Cultural Obstacles to Economic Development: Often Overstated, Usually Transitory,” in Culture and Public Action: Understanding the Role of Culture and Development Policy in an Unequal World, ed. Vijayendra Rao and Michael Walton (Stanford: Stanford University Press
Stanford University Press
The Stanford University Press is the publishing house of Stanford University. In 1892, an independent publishing company was established at the university. The first use of the name "Stanford University Press" in a book's imprinting occurred in 1895...
, 2004), pp. 115–37.