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Ibrahim Warde; Islamic Finance in the Global Economy, Edinburgh LTiiversity Press, Second edition 2010, pp. 271. ISBN (printed version) 0-7486-2776-6, 978-0-7486-2776-9.
Over a decade has elapsed since the first edition of Ibrahim Warde's book which was a pioneering attempt to examine developments in Islamic finance from a political economy perspective. Much has changed since 2000, both in the politics of the Middle East, the region which is the major focus of the book, and within the Islamic finance industry. The new edition considers the implications of the global financial crisis of 2008 for Islamic finance, but was already published before the Arab Spring which may have even more profound implications for Islamic finance.
The original chapter breakdown has been maintained in the new edition and much of the content remains as before. This lack of revision is justified as Islamic fi- nancial principles have not changed during the last decade and much of the practice has evolved rather than being transformed. Instead it is the global context which has changed and the view of Islam by many specialists in international relations. Islamic finance cannot be separated from its religious roots, although the extent to which it has compromised with Western capitalism can be debated. As Warde points out Islamic finance should not be regarded as a monolith but rather an industry accom- modating considerable diversity with some institutions closely resembling their con- ventional equivalents while maintaining their Islamic credentials, but others being less commercially driven, notably the state owned Islamic banks in Iran.
Warde divides the development of Islamic finance into three phases, the first phase from 1975-1991 witnessing the initial rapid expansion of Islamic banking fa- cilitated by the rise in oil prices, followed by a rethinking of how Islamic banks could be made more viable during more difficult economic conditions of the 1980s. This led...