Shaikh Ahmad Hassan School of Law (SAHSOL) faculty member, Dr. Zubair Abbasi's paper was presented at the Annual Comparative Business and Financial Law Workshop of the American Society of Comparative Law held at University of Kansas School of Law on February 10-11, 2017.
In his paper, Dr. Abbasi argued that the business corporation was a key institution in the rise of the West because it economised on transaction costs and spread risks amongst various parties. The Middle East, like China and India, did not indigenously develop business corporations, though it had somewhat similar institutions that fell short of achieving full features of a business corporation. Some scholars, particularly Professor Timur Kuran, have tried to establish a causal connection between the failure of the Middle East to develop business corporations and its economic underdevelopment. They claim that Islamic law and legal institutions hindered the organisational evolution in the Middle East. The absence of corporations led to the economic and political down fall of the Middle East. Dr. Abbasi's paper tested this Islamic Law Matters thesis by determining the role of law in the development of business corporations under English law. He argued that the main features of the nineteenth century business corporations were borrowed from the existing institutions such as merchant guilds, partnerships and trusts. Similar institutions also existed under Islamic law. The fusion of various features in one organisation, however, was caused by factors exogenous to law. Therefore, the answer to the question of the failure of the Middle East to develop business corporations indigenously lies in factors outside Islamic law.
Further details about the workshop are available here.
