Water governance and sustainability: an Islamic moral economy perspective on circular resource use

Abstract Water circularity is increasingly recognised as a critical determinant of long-term economic resilience and sustainability. This paper empirically investigates the decoupling of economic growth from water consumption across 179 countries over the period 1962 to 2019, using Tapio’s decoupling index (2005) and the environmental Kuznets curve framework. It examines performance differences between Muslim-majority and non-Muslim countries, and further evaluates the role of constitutional systems, Shari’ah, civil, and common law, through the combined lenses of the circular economy and Islamic Moral Economy. An innovative model, “CircuIslamicus”, is proposed, incorporating the Islamicity Index as a proxy for IME adherence to assess whether higher Islamicity scores correlate with stronger water circularity performance. Key findings reveal that non-Muslim countries with higher Islamicity index scores outperform Muslim-majority countries and those governed by Shari’ah law in achieving water circularity, suggesting a significant gap between ethical-economic aspirations and environmental outcomes in Muslim-majority contexts. While evidence of global progress in relative decoupling is observed, the results call for urgent policy and institutional realignment to embed substance-oriented Islamic Moral Economy principles into practice.