The Collective and the Individual: Re-thinking the Role of Altruism in Institutions Through Akhuwat’s Example



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Conventional economic postulates based on impersonal exchange do not account for altruism or values in their formulation. As a result, there is larger emphasis placed on the importance of free-market based justifications for development initiatives, and lesser importance placed on examining the role and competency of institutions that facilitate the market process in the political economy framework. This results in a market-oriented delineation of civil society organizations rather than creating true development. The market proliferation of conventional microcredit practices and the severe limitations they have run into of late are an indication of this problem. To demonstrate an alternative I use Akhuwat’s (a microcredit institution based in Lahore, Pakistan) example, and its method of using religion as a preceptoral mechanism in place to incubate values and institutionalize altruism. Akhuwat is novel in its approach in that it levies no interest on its loans and uses religion as a tool that enables inculcation of the missing value system, thus harnessing community and instilling a collective oriented outlook in agents to systemically accomplish goals of social justice.



microcredit, altruism, institutions, Islamic economics, rotten kid theorem, Islam, value systems, preceptoral mechanism, community building, social justice, egoism, economic development, religion, poverty alleviation, Akhuwat, Pakistan, microfinance