Waqf as a Mechanism for Reducing Economic Inequality: Insights From SLR With Indonesian Focus

This study examines the potential of waqf to reduce economic inequality in Indonesia through a systematic literature review (SLR) guided by the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework. Relevant academic studies and institutional reports were systematically identified, screened, and synthesized to assess the redistributive role of waqf, particularly cash waqf, within Indonesia's Islamic social finance ecosystem. Drawing on income distribution and governance perspectives, the review identifies three potential mechanisms through which productive waqf may address economic inequality: income generation, asset-based economic empowerment, and improved access to financial and social services for disadvantaged communities. However, the literature provides stronger evidence of poverty alleviation and economic empowerment than of measurable reductions in income or wealth inequality. Governance limitations, low waqf literacy, and insufficient institutional coordination further constrain the realization of these redistributive benefits. The study highlights the need to strengthen waqf governance, enhance coordination between waqf institutions and formal financial intermediaries, and expand public participation in productive waqf initiatives.