Zakat and Socio-Economic Impact: The Role of Local Government and Zakat Institutions

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Umar Al-Haddad
Agung Maulana
Rifaldi Majid
Muh. Fudhail Rahman


Abstract: This study aims to solve research questions on whether support for zakat
institutions (ZIs) from regional governments in the East Java province of Indonesia
affects the social and economic conditions of the region. The authors observed 11 samples
of cities and districts in East Java over the last three years (2019 to 2021). Thirty-three
research data were processed using panel data regression techniques with a fixed-effects
model approach. Data was obtained from the National Zakat Institution (Baznas). The
results show that financial support from the local government budget (RREB) and
through zakat regulations of the regional governments in East Java have a positive
effect on GRDP and a significant negative effect on the Gini index. In addition, zakat
distribution activities in East Java have also been shown to have a significant positive
and negative effect on GRDP growth and the Gini index. This study also provides
recommendations to the local government of East Java and zakat stakeholders in
synergising to build a better regional ZI system to support the regional economy.


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