Zakat and Inequality: Some Evidence From Pakistan

Zakat is an important form of religiously‐mandated charity under Islam. This paper examines its impact on income inequality in Pakistan. Data from 1987–88 are used to construct two income distributions‐one that would have obtained if zakat had not been given, and one that did obtain when such giving took place. Atkinson‐Kolm‐Sen relative indices of income inequality are computed which show that zakat does reduce measured income inequality in Pakistan. Both intra‐province and inter‐province components of over‐all inequality decline, though the amount of change is small. So give to the kinsman his due, and to the needy, and to the wayfarer. That b best for those who seek Allah's countenance. The Koran