332 AN INTRODUCTION TO ISLAMIC FINANCE
development of the fi nancial sector. If the level of trust is high, people rely
more on risky assets, such as equity, invest a larger share of their wealth in
stocks, use more checks, and have access to greater amounts of credit than
in low - trust countries. Importantly also, since the second half of the 1990s,
a number of researchers, using a variety of techniques, have attempted to
demonstrate the impact of trust on economic performance.
The Qur’an establishes human beings as the khalifa or trustees of God
on earth, and life is a test of man’s worth in the eyes of God (67:2). The
divinely mandated command of faithfulness to the terms and conditions of
contracts and abiding by their obligations is underpinned by the equally
strong and divinely originated institution of trust.^19 There is a strong inter-
dependence between contract and trust; without the latter, contracts become
diffi cult to enter into and costly to monitor and enforce. Laws and expen-
sive administrative apparatuses are needed to enforce contracts where trust
is weak. Perhaps trust is emphasized to make entering into and enforcing
contracts less costly. Accordingly, numerous verses in the Qur’an proclaim
trustworthiness as a sign of true belief. Conversely, untrustworthiness and
betrayal of trust are considered a clear sign of unbelief.^20
Trust is important social capital which plays a vital role in promoting
good governance, especially in the case of institutions dealing with fi nancial
services, which are given property to manage in “trust.” Therefore, preserv-
ing high trust should be an integral part of the governance goals of business
leaders and the holders of public offi ce.
High Ethical Standards and Codes of Conduct
Islam demands high standards of ethical behavior from everyone in society,
but emphasizes these standards for who govern or represent others. Within
the framework of economic justice, emphasis is placed on being mindful to
give full measure and weight in all business transactions. Taken in conjunc-
tion with the principles of property rights, it establishes an important rule
of business that full measure and weight is not limited to physical quantities
but is equally applicable to measuring intangible rights and obligations. In
other words, it is the responsibility of those in charge of others’ property —
tangible or intangible, fi nancial or non - fi nancial, explicit or implicit — to
ensure that all obligations are accounted for with great care and all claims
and rights are returned in full to the rightful recipient.
The verses which state “Woe unto those who give short measure, those
who, when they are to receive their due from [other] people, demand that it
be given in full but when they have to measure or weigh whatever they owe
to others, give less than what is due!” (83:1–3) remind individuals against
any negligence or cheating in determining what is owed to others. They refer
not only to commercial dealings but encompass every aspect of social rela-
tions, both practical and moral, and apply to every individual’s rights and
obligations no less than to his physical possessions.^21