In bourgeoisie we trust, but which one? Islamism, development, and the “Finance Curse”

The rise of Islamic financial institutions in the past decades stimulated studies that investigated their link to Islamic parties. Some perspectives viewed them as the financial wing of Islamic extremism. Others argued that the rise of an Islamic bourgeoisie, especially if integrated into the global economy, promotes moderation and liberalization among Islamic groups. This study investigates the relationship between the type of Islamic capital and Islamic moderation. In addition, it analyzes how state institutions can shape the trajectories of Islamic movements through economic policies. In this regard we compare and contrast production based capitalism which empowers industrial actors versus finance based capitalism which may not support the industry but strengthen financial elites. We find that production based development is more likely to promote mutual wins among Islamic and other actors and facilitate moderation than finance based economies which may promote zero-sum games and polarization.