Islamic Human Development Index (i-HDI) and Poverty Reduction in OIC Countries

The fight against poverty requires a broader perspective than simply focusing on the issue of income insufficiency. Thus, adopting human development strategies is relevant to poverty alleviation because it provides an incentive to broaden the database on poverty by studying the deprivation of a human being's functioning and capabilities. The United Nations Development Program (UNDP) has developed the Human Development Index (HDI), considered the most comprehensive indicator. However, it is not fully compatible and sufficient to measure human development from the Islamic perspective. This study attempts to explore the Islamic Human Development Index (i-HDI) based on the five pillars of Maqasid Sharīʿah; the preservation of Ad-Din (religion), An-Nafs (life), Al-Aql (intellect), Al-Nasl (progeny) and Al-Mal (wealth). It also tests the effects of (i-HDI) on poverty reduction using panel regression and index construction techniques. Our results show that the human development components from an Islamic perspective are significantly relevant for poverty alleviation and are a viable alternative to the HDI.