Sharia Courts May Have Helped Bring Down the Ottoman Empire
22nd June 2016
An American economist looked at rulings handed out between 1602 and 1799 and noticed the judges’ efforts to help people “considered worthy of support” had a significant “unintended consequence”.
Because Ottoman elites could rely on support from the courts during contract disputes, they had to pay significantly higher rates of interest on loans than women, non-Muslims and the poor, who were less likely to default because they would face legal punishment.
This, Professor Timur Kuran argued in a paper in the Economic Journal, had a stifling effect on investment at a time when the Industrial Revolution was taking off in Europe.
Plus that whole ‘no charging interest’ thing put a bit of a drag on the economy.