Do Governance and Digitalization Enhance the Impact of Zakat on Human Development? Evidence from Indonesia and Malaysia

Zakat has considerable potential to support human development, yet its contribution depends on institutional governance and digital transformation. This study examines the relationships between zakat, governance, digitalization, and the Human Development Index (HDI), comparing Indonesia and Malaysia. A comparative quantitative approach was employed using panel data covering 2015–2023, obtained from official zakat institutions, national statistical agencies, and international development reports. Descriptive analysis, panel regression, and comparative analysis were used to assess relationships among the variables and differences between institutional systems. The results indicate that zakat, governance, and digitalization are positively and significantly associated with HDI, with coefficients of 0.485, 0.293, and 0.178, respectively. The model explains 86.7% of the variation in HDI. Malaysia demonstrates a stronger zakat coefficient than Indonesia, reflecting greater institutional integration, distribution efficiency, and digital maturity. Indonesia records faster zakat collection growth but faces coordination and standardization challenges. These findings suggest that productive zakat allocation, transparent governance, and accessible digital platforms can support income, education, and health outcomes. The study concludes that integrating zakat management with social protection policies, strengthening institutional accountability, and expanding digital access are essential strategies for advancing inclusive and sustainable human development while improving the targeting and monitoring of beneficiary empowerment programs.