The political impact of Islamic banking in Jordan
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This dissertation examines Islamic banking in Jordan. It is argued that institutions perceived as culturally authentic may play important political roles in a post-colonial society. Islamic banking in particular can both function in a modern, globalized economy and express cultural tradition. It may help to legitimate Jordan’s political structures and overcome social and economic bifurcations between traditional and modern sectors of society. Jordan is a part of a region of the world in which the colonial experience continues to have an enduring legacy. What had previously been a tribal Bedouin society was transformed almost overnight. Its modern banking system transgressed Islamic norms and laws and excluded huge portions of the population who continued to see meaning in the religious values and principles rooted in the social and cultural institutions that had just been trampled upon. This dissertation looks into how Islamic banks that interact in a global economy while remaining true to culturally authentic beliefs and practices can begin to close the gaps between state practice and popular beliefs. The strongest opposition to the monarchy in Jordan has come from political Islamists who feed upon popular discontent and alienation caused by the practices and actions of a ruling elite that does not share the same cultural values as the majority of the population. Much of what the Islamists espouse, while culturally authentic, is removed from the political, financial, and economic realities of the modern era. Islamic banking thus has the potential to play a mediating role between a modernizing elite and this Islamist backlash. This dissertation will test the extent to which cultural authenticity matters by observing how Islamic banks in Jordan have been able to tap into a latent demand for alternative financial practices and how the Islamic financial movement relates to Islamist political movements. Although Islamic banking has not achieved its full potential, the dissertation presents strong evidence of its capacity to bridge divisions between state and society.