Abstract
This thesis explores the transformative potential of waqf as a fiscal policy instrument for socio-economic development and poverty alleviation within the framework of Islamic finance, with a specific focus on Indonesia. The study critically examines the historical evolution of waqf, its foundational principles within Islamic moral economy, and its contemporary applications as a tool for public finance and sustainable development. Unlike conventional fiscal mechanisms, which often rely on interest-based borrowing and taxation, public waqf operates as a non-debt-based endowment, perpetually generating income for public welfare projects such as education, healthcare, and infrastructure. Using primary data, the research investigates the influence of religiosity, knowledge, and institutional structures on income generating waqf and the potential for waqf to function as fiscal policy tool, providing background for understanding how these instruments can be effectively mobilised for socio-economic impact in Indonesia.The study employs a quantitative approach using survey data to examine the factors influencing income generating waqf and its potential as a fiscal policy instrument in Indonesia. The analysis is conducted using Patial Least Squares Structural Equation Modelling (PLS-SEM) to test the relationships between religiosity, knowledge, and institutional structures on donors’ and recipients’ manifested beliefs. The findings indicate that, despite its historical significance and cultural entrenchment, waqf remains underutilised as a fiscal tool in Indonesia. Governance challenges limited regulatory enforcement, and inefficient management of waqf assets have constrained its contribution to national development goals. However, institutional initiatives such as the establishment of the National Waqf Board (BWI) and programs like Cash Waqf Linked Sukuk (CWLS) represent promising steps toward integrating waqf into public finance strategies. These instruments facilitate the mobilisation of waqf funds for infrastructure projects and social programs without relying on debt, aligning with Islamic Finance principles and supporting fiscal sustainability.
The study concludes by proposing strategic policy recommendations aimed at strengthening the regulatory framework, improving governance mechanisms, and promoting technological integration to optimize waqf as a sustainable fiscal tool in Indonesia. It emphasizes that, with effective institutional support and increased public awareness, waqf can move beyond being a charitable endowment to become a dynamic instrument of fiscal policy, contributing to socio-economic development and poverty alleviation. These findings highlight the potential of waqf to bridge socio-economic gaps and enhance communal welfare (Maslahah) within the broader framework of Islamic Moral Economy (IME).
| Date of Award | 2026 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Alija Avdukic (Supervisor) & Bill Russell (Supervisor) |