Welfare Transformation through Islamic Economics: A Holistic Approach to Wealth Distribution and Social Inclusion

This study explores the role of Islamic economic instruments in addressing poverty, inequality, and social exclusion in Muslim-majority countries through a Systematic Literature Review (SLR) guided by PRISMA. From 673 articles identified, 22 were eligible for analysis. The findings show that zakat effectively reduces poverty and inequality when supported by strong institutional frameworks and productive allocation, while cash waqf and waqf-based investment funds provide sustainable financing for education, healthcare, and employment. However, variations in effectiveness arise due to governance, policy, and contextual differences. The study concludes that Islamic economics offers not only redistributive mechanisms but also a holistic framework for sustainable welfare transformation and inclusive development.