Timur Kuran is a Professor of Economics and Political Science, and Gorter Family Professor of Islamic Studies at Duke University. His research concentrates on social change, including the evolvement of choices and foundations. He is an authority on the economic history and thought of the Middle East. His present projects involve a study of the role that the traditional institutions of the Middle East, including Islamic economic institutions, played in its political development. Among his publications are Private Truths, Public Lies: The Social Consequences of Preference Falsification (Harvard University Press); Islam and Mammon: The Economic Predicaments of Islamism (Princeton University Press); and The Long Divergence: How Islamic Law Held Back the Middle East (Princeton University Press).
He graduated from Robert Academy, Istanbul in 1973. Then, he continued studying economics at Princeton University (AB 1977) and Stanford University (Ph.D. 1982). Between 1982 and 2007 he taught at the University of Southern California. He was also a member of the Institute for Advanced Study in Princeton, the John Olin Visiting Professor at the Graduate School of Business, University of Chicago, and a visiting professor of economics at Stanford University. He is presently a member of the Executive Committee of the International Economic Association, guides the Association for Analytic Learning about Islam and Muslim Societies (AALIMS), redacts a book series for Cambridge University Press, and serves on the editorial boards of five academic journals.
Professor Kuran has written widely on the evolvement of choices and institutions, with participations to the study of hidden choices, the uncertainty of social revolutions, the dynamics of ethnic conflict, perceptions of discrimination, and the evolution of morality. His well-known theoretical work is Private Truths, Public Lies: The Social Consequences of Preference Falsification (Harvard University Press), which concerns with the consequences of being untruthful about what one knows and desires. Since its original publication in 1995, this book has emerged also in German, Swedish, Turkish, and Chinese.
Kuran has also written on Islam and the Middle East, with an introductory focus on modern efforts to rebuild economies compliant to Islamic teachings. Some 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 changed his concentration to the mystery of why the Middle East, which once had a high standard of living by global standards, finally fell behind in different domains, covering economic production, organizational potential, technological creativity, democratization, and military strength.
His thesis is that although the economic and educational foundations of Islam are well-suited to the era in which they emerged, they were not well suited to an active industrial economy. These institutions promoted social balance that decreased the probability of modern capitalism coming out from within Islamic development. His current articles have recognized barriers involving traditioonal actions, contract law, procedures of the courts, the lack of corporations, the financial system, and the distribution of social services.
Kuran has served as editor of an integrative book series published by the University of Michigan Press from 1990 to 2008. 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 a number of scholarly journals. He has taught at University of Southern California from 1982 to 2007, where he gained the King Faisal professorship in Islamic thought and culture from 1993 onwards. He was the Director of USC’s Institute, from 2005 to 2007, for Economic Research on Civilizations, which he established. Within the years of 1989 and 1990, he was a member of the Institute for Advanced Study in Princeton; in 1996–1997, he held the John Olin visiting professorship at the Graduate School of Business, University of Chicago; and in 2004–2005, he was a visiting professor of economics at Stanford University. He is presently a member of the Executive Committee of the International Economic Association.
Islam and economic improvement of the Middle East
The Middle East was once an advanced region of the world, in terms of standard of living, technology, agricultural productivity, literacy, or foundational creativity. Finally, it fell behind the European economy, because it had a difficulty in matching the foundational transformation by which western Europe greatly developed its capacity to pool resources, organize productive activities, and conduct exchanges. In an article of 1997, which was entitled “Islam and Economic Underdevelopment: An Old Puzzle Revisited,” Kuran analyzed the leading interpretations presented since the nineteenth century, and he has advanced to develop a thesis of his own. His thesis centers on the role of Islamic foundations.
The economic institutions of the Middle East were adapted to the Middle Ages, argues Kuran, and they never stopped. However, during the second millennium, in certain fields, economic modernization changes were minimal, at least when compared 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: the Islamic law of inheritance, whose egalitarian character inhibited capital accumulation, 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 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).
Islamic economics is a modern doctrine that claims to offer an alternative to economic systems 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.
The most visible achievement of Islamic economics has been Islamic banking, 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” 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 Law 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 systems, 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.