Rethinking the digital divide: from philanthropy to isonomia..

The digital divide has been, at least until very recently, a major theme in policy as well as interdisciplinary academic circles across the world, as well as at a collective global level, as attested by the World Summit on the Information Society. Numerous research papers and volumes have attempted to conceptualise the digital divide and to offer reasoned prescriptive and normative responses. What has been lacking in many of these studies, it is submitted, is a rigorous negotiation of moral and political philosophy, the result being a failure to situate the digital divide - or rather, more widely, information imbalances - in a holistic understanding of social structures of power and wealth. In practice, prescriptive offerings have been little more than philanthropic in tendency, whether private or corporate philanthropy. Instead, a theory of distributive justice is required, one that recovers the tradition of emancipatory, democratic struggle. This much has been said before. What is new here, however, is that the paper suggests a specific formula, the Rawls-Tawney theorem, as a solution at the level of analytical moral-political philosophy. Building on the work of John Rawls and R. H. Tawney, this avoids both the Charybdis of Marxism and the Scylla of liberalism. It delineates some of the details of the meaning of social justice in the information age. Promulgating a conception of isonomia, which while egalitarian eschews arithmetic equality (the equality of misery), the paper hopes to contribute to the emerging ideal of communicative justice in the media-saturated, post-industrial epoch.

Islamic corporate financing : does it promote profit and loss sharing?

Islamic financing instruments can be categorised into profit and loss/risk sharing and non-participatory instruments. Although profit and loss sharing instruments such as musharakah are widely accepted as the ideal form of Islamic financing, prior studies suggest that alternative instruments such as murabahah are preferred by Islamic banks. Nevertheless, prior studies did not explore factors that influence the use of Islamic financing among non-financial firms. Our study fills this gap and contributes new knowledge in several ways. First, we find no evidence of widespread use of Islamic financing instruments across non-financial firms. This is because the instruments are mostly used by less profitable firms with higher leverage (i.e., risky firms). Second, we find that profit and loss sharing instruments are hardly used, whilst the use of murabahah is dominant. Consistent with the prediction of moral-hazard-risk avoidance theory, further analysis suggests that users with a lower asset base (to serve as collateral) are associated with murabahah financing. Third, we present a critical discourse on the contentious nature of murabahah as practised. The economic significance and ethical issues associated with murabahah as practised should trigger serious efforts to steer Islamic corporate financing towards risk-sharing more than the controversial rent-seeking practice.