economic thought of the rightly guided caliphs 115time the state became much wider and the administration grew more
complicated. Province governors were given certain authority by
which they would run the regular affairs of the province without
necessarily having to wait for orders from the capital. Tax policies
were designed and determined by the central government; no gov-
ernor had the right to impose new taxes or change tax rates. But
governors were given the authority to spend of the tax revenue on
the affairs of the province, leaving the surplus to be sent to the cen-
tral government. For example, one third of the tax revenue in Egypt
was allocated to maintaining roads, building bridges and digging
canals in the province (Kettani, 1979). Zakàh revenue was to be
spent on social-caring spending in the province first and the rest to
be sent to the government in al-Medìnah. Hence the Islamic admin-
istration at the time of Umar could be called a flexible-central gov-
ernment. Governors were under the continuous surveillance of Umar
and any misuse of power was severely punished. The second caliph
introduced the principle of questioning the governor for any extra
wealth he might have achieved as a result of his position. At the
end of the governor’s service he was to explain the reasons for any
substantial increase in his wealth between the date of assuming his
post and the date of his retirement. Pecuniary gifts to governors
given by foreign or influential local delegates were to be regarded
as gifts to the state, even if they were given in personal capacity. In
one example when a governor differentiated between what was given
to him as a personal gift and what was given to the state he was
reprehended by Umar who regarded all that had been given as state
property: “Would he see if he was not a governor and sat in his
father’s and mother’s house instead, what gifts would be given to
him!”, angrily exclaimed the caliph (Al-Suyùtì).
The state finance was administered through local treasuries and
a central treasury. A local treasury was established in each province
and was headed by a treasurer, who was not the province’s gover-
nor, appointed by the head of state. The treasurer was responsible
for the province’s revenues and expenditure and was accountable to
the head of state in the state’s capital. A central treasury was estab-
lished in al-Medìnah, the state’s capital, and was headed by a trea-
surer, not the head of state. The function of the central treasury was
twofold: to act as a local treasury to al-Medìnah and its surround-
ing area and to act as an organiser among local treasuries. Those
treasuries that had surpluses were to forward their surplus to the