Integrating Maqashid al-Syari'ah into Human Capital: A Solow Growth Model Analysis of Real GDP per Capita in OIC Member Countries

Abstract

This study examines the role of maqāṣhid al-syarīʿah in shaping human capital within the Solow growth framework for Organization of Islamic Cooperation (OIC) member countries during 2014–2023. Foreign Direct Investment (FDI) is employed as a determinant of capital (K) and internet access as a proxy for technology (A) in explaining GDP per capita. A composite maqāṣhid index, constructed using Principal Component Analysis (PCA), is interacted with the labor force participation rate (LFPR) in three fixed-effects panel regression models, controlling for government effectiveness, corruption perception, democracy, and the COVID-19 pandemic. Results indicate that LFPR alone does not significantly affect GDP per capita, while the maqāṣhid index has a positive and significant impact, highlighting its economic relevance. The interaction term between the maqāṣhid index and LFPR also yields a positive and significant effect, suggesting that integrating maqāṣhid values—covering material, spiritual, and moral aspects—into workforce development can enhance economic performance. The study therefore recommends that OIC countries embed maqāṣhid principles into human capital policies through value-based education, skills development, and inclusive healthcare, thereby improving labor quality, fostering productivity, and supporting sustainable growth.

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