Exploring the Ethical Dimension of Hawala

Journal of Business Ethics 124 (2):327-337 (2014)
  Copy   BIBTEX

Abstract

The aim of this paper is to explore the ethical dimension of hawala, an ancient informal financial practice rooted in Islamic moral traditions. Widely used in countries with an Islamic background and their diasporas, hawala is considered an important vehicle for the financial and economic development of some less developed countries. Nevertheless, in Western countries, hawala is regarded with suspicion due its controversial ethical nature. Unlike other Islamic financial institutions, the controversial questions are not the legitimacy of profit sources or the interest charged, but rather the lack of transparency that surrounds hawala transactions. Yet, the literature on hawala has neglected its ethical perspective. Our study delves into this dimension with a critical approach, using the Triple Font Theory, grounded on virtue ethics. We conclude that if hawala transactions are carried out with honesty, and fairness, this practice deserves a positive ethical appraisal. However, it is necessary to implement efficient regulatory measures to guarantee that the system is not abused by money launders and criminals. In practice, it becomes imperative to bring over a change in the regulatory approach to hawala toward a more ethically, culturally, and economically sensitive strategy. Thus, future research should focus on how “hyper-norms” or fundamental principles inherent to humanity, which are common to both “formal” and “informal,” “Western” and “non-Western” financial practices, could run the new AML/ctf regulation agenda.

Links

PhilArchive



    Upload a copy of this work     Papers currently archived: 93,098

External links

Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Similar books and articles

Analytics

Added to PP
2013-12-15

Downloads
31 (#533,234)

6 months
9 (#355,374)

Historical graph of downloads
How can I increase my downloads?

Author's Profile

Ignacio Ferrero
University of Navarra

References found in this work

Summa Theologiae (1265-1273).Thomas Aquinas - 1911 - Edited by John Mortensen & Enrique Alarcón.
Corporate Roles, Personal Virtues.Robert C. Solomon - 1992 - Business Ethics Quarterly 2 (3):317-339.
Corporate Roles, Personal Virtues.Robert C. Solomon - 1992 - Business Ethics Quarterly 2 (3):317-339.
Humanizing Business.Geoff Moore - 2005 - Business Ethics Quarterly 15 (2):237-255.
Humanizing Business.Geoff Moore - 2005 - Business Ethics Quarterly 15 (2):237-255.

View all 34 references / Add more references