Fostering Inclusive Growth: Application of Islamic Economy and Social Market Economy Models in Tourism Villages
Keywords:
Islamic economy, social market economy, tourism village, community-based tourism, rural development, maqashid al-shariaAbstract
Purpose: This paper develops an integrative conceptual framework, the Islamic-Social Market Economy for Tourism (ISMET) Model, that synthesizes core principles of Islamic Economy (IE) and Social Market Economy (SME) to foster inclusive growth in tourism villages in developing, Muslim-majority countries.
Design/methodology/approach: The study adopts a qualitative, conceptual-comparative research design from theoretical literature on Islamic economics, ordoliberal social market economy theory, inclusive growth, and community-based tourism, followed by abductive theory-building.
Findings: The comparative analysis identifies four convergent pillars linking IE and SME: economic inclusion through ethical market participation, social inclusion via redistributive instruments, governance inclusion through deliberative decision-making, and environmental inclusion under a stewardship ethic. These pillars are operationalized into concrete mechanisms, musharakah-cooperative enterprises, waqf-funded social infrastructure, subsidiarity-shura community councils, and khalifah-grounded carrying-capacity regulation, mapped against measurable inclusive-growth indicators.
Practical implications: The ISMET Model offers policymakers, village cooperatives, and development agencies in Indonesia, Malaysia, Morocco, and Jordan an implementable governance architecture that channels tourism revenue toward local ownership, social welfare, participatory governance, and ecological sustainability.
Originality/value: This is the first study to systematically integrate Islamic Economy and Social Market Economy theory into a unified governance framework for tourism village development, extending Sen's capability approach and directly engaging Kuran's critique of Islamic economic institutions.
Downloads
References
Al-Ansi, A., Olya, H., & Han, H. (2023). Two decades of research on halal hospitality and tourism: A review and research agenda. International Journal of Contemporary Hospitality Management, 35(6), 2017–2055. https://doi.org/10.1108/IJCHM-12-2021-1515
Ashley, C., & Roe, D. (2002). Making tourism work for the poor: Strategies and challenges in southern Africa. Development Southern Africa, 19(1), 61–82.
Asutay, M. (2007). Conceptualisation of the second best solution in overcoming the social failure of Islamic banking and finance: Examining the overpowering of homoislamicus by homoeconomicus. IIUM Journal of Economics and Management, 15(2), 167–195.
Battour, M., & Ismail, M. N. (2016). Halal tourism: Concepts, practices, challenges and future. Tourism Management Perspectives, 19, 150–154.
Canihac, H., & Laruffa, F. (2022). From an ordoliberal idea to a social-democratic ideal? The European Parliament and the institutionalization of ‘social market economy’ in the European Union (1957–2007). JCMS: Journal of Common Market Studies, 60(4), 867–884.
Chang, H.-J. (2002). Kicking away the ladder: Development strategy in historical perspective. Anthem Press.
Chapra, M. U. (2000). The future of economics: An Islamic perspective. The Islamic Foundation.
Eucken, W. (1952). Grundsätze der Wirtschaftspolitik. Mohr Siebeck.
Ferianto, F., & Cahyono, H. (2022). Islamic economic principles in rural tourism governance: Evidence from desa wisata in Java, Indonesia. Journal of Islamic Economics and Business, 8(2), 115–134.
Gilson, L. L., & Goldberg, C. B. (2015). Editors’ comment: So, what is a conceptual paper? Group & Organization Management, 40(2), 127–130.
Goldschmidt, N., & Wohlgemuth, M. (Eds.). (2008). Grundtexte zur Freiburger Tradition der Ordnungsökonomik. Mohr Siebeck.
Haneef, M. A. (2009). A critical survey of Islamization of knowledge. IIUM Press.
Harinurdin, E., Laksmono, B. S., Kusumastuti, R., & Safitri, K. A. (2025). Community empowerment utilizing open innovation as a sustainable village-owned enterprise strategy in Indonesia: A systematic literature review. Sustainability, 17(8), Article 3394. https://doi.org/10.3390/su17083394
Hassan, M. K., & Lewis, M. K. (Eds.). (2007). Handbook of Islamic banking. Edward Elgar Publishing.
Hidayat, P., & Sari, R. L. (2022). Linkage between financial inclusion and Indonesian welfare: A recent evidence. Cogent Business & Management, 9(1), Article 2108299. https://doi.org/10.1080/23311975.2022.2108299
Higgins-Desbiolles, F. (2018). Sustainable tourism: Sustaining tourism or something more? Tourism Management Perspectives, 25, 157–160.
Hussain, K., Sun, H., Ramzan, M., Mahmood, S., & Saeed, M. Z. (2024). Interpretive structural modeling of barriers to sustainable tourism development: A developing economy perspective. Sustainability, 16(13), Article 5442. https://doi.org/10.3390/su16135442
Iqbal, Z., & Mirakhor, A. (2011). An introduction to Islamic finance: Theory and practice (2nd ed.). Wiley.
Jaakkola, E. (2020). Designing conceptual articles: Four approaches. AMS Review, 10, 18–26.
Kuran, T. (2004). Islam and Mammon: The economic predicaments of Islamism. Princeton University Press.
Miah, A. A. (2019). Integration of zakat and awqaf for poverty alleviation and development. In Revitalization of waqf for socio-economic development (Vol. 1, pp. 215–242). Palgrave Macmillan.
Müller-Armack, A. (1978). The social market economy as an economic and social order. Review of Social Economy, 36(3), 325–331.
Naqvi, S. N. H. (1981). Ethics and economics: An Islamic synthesis. The Islamic Foundation.
Nedergaard, P., & Snaith, H. (2015). ‘As I drifted on a river I could not control’: The unintended ordoliberal consequences of the Eurozone crisis. Journal of Common Market Studies, 53(5), 1094–1109.
OECD. (2014). All on board: Making inclusive growth happen. OECD Publishing.
Okazaki, E. (2008). A community-based tourism model: Its conception and use. Journal of Sustainable Tourism, 16(5), 511–529. https://doi.org/10.1080/09669580802159594
Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge University Press.
Permana, O., Sutono, A., Sumaryadi, Rahtomo, W., & Ristanto, H. (2023). The role of BUMDes (village-owned enterprises) in strengthening the tourism village business ecosystem: Sumberbulu tourism village case study. Archives of Business Research, 11(4), 224–238. https://doi.org/10.14738/abr.114.14348
Ruiz-Ballesteros, E. (2011). Social-ecological resilience and community-based tourism: An approach from Agua Blanca, Ecuador. Tourism Management, 32(3), 655–666. https://doi.org/10.1016/j.tourman.2010.05.021
Salazar, N. B. (2012). Community-based cultural tourism: Issues, threats and opportunities. Journal of Sustainable Tourism, 20(1), 9–22. https://doi.org/10.1080/09669582.2011.596279
Scheyvens, R. (2002). Tourism for development: Empowering communities. Pearson Education.
Sen, A. (1999). Development as freedom. Oxford University Press.
Siddiqi, M. N. (2004). Riba, bank interest and the rationale of its prohibition. Islamic Development Bank, Islamic Research and Training Institute.
Suyatna, H., Indroyono, P., Yuda, T. K., & Firdaus, R. S. M. (2024). How community-based tourism improves community welfare? A practical case study of ‘governing the commons’ in rural Nglanggeran, Indonesia. Journal of Asian and African Studies. Advance online publication. https://doi.org/10.1177/00219096241228717
Tucker, H., & Boonabaana, B. (2012). A critical analysis of tourism, gender and poverty reduction. Journal of Sustainable Tourism, 20(3), 437–455.
United Nations. (2015). Transforming our world: The 2030 agenda for sustainable development. UN General Assembly Resolution A/RES/70/1.
UNWTO. (2023). Tourism and rural development: A global report. World Tourism Organization.
Vanberg, V. J. (2004). The Freiburg School: Walter Eucken and ordoliberalism (Freiburg Discussion Papers on Constitutional Economics 04/11). Walter Eucken Institut.
Yassin, A. M., Ismail, N. A., & Yunos, M. Y. M. (2020). Community-based tourism and local economic development in Malaysia: A systematic review. Malaysian Journal of Society and Space, 16(1), 196–209.
Zapata, M. J., Hall, C. M., Lindo, P., & Vanderschaeghe, M. (2011). Can community-based tourism contribute to development and poverty alleviation? Lessons from Nicaragua. Current Issues in Tourism, 14(8), 725–749. https://doi.org/10.1080/13683500.2011.559200
