The Effect of Public and Private Investment on Economic Welfare in Selected Islamic Countries
Keywords:
Economic welfare, public investment, private investment, panel data, Islamic countriesAbstract
The present study was conducted with the aim of examining and analyzing the impact of public and private sector investment on economic welfare in selected Islamic countries during the period 1990–2023. This study employed a quantitative approach and utilized panel data econometric methods in order to control for structural differences and country-specific heterogeneity, thereby providing a precise estimation of the actual determinants of welfare. The findings indicate that capital accumulation (both public and private) and real per capita income have a positive and significant effect on the improvement of economic welfare. Among these factors, public investment plays a relatively stronger role due to its concentration on the development of fundamental infrastructure. On the other hand, the results reveal that fluctuations in macroeconomic variables such as inflation and economic growth did not have a significant effect on the welfare index in the countries under investigation; a phenomenon that may be attributed to unequal wealth distribution and the predominantly rentier structure of these economies. The policy implications of this study emphasize that, in order to achieve inclusive development in Islamic economies, policymakers should focus on expanding productive investment capacities, improving the business environment, and enhancing the real purchasing power of households rather than relying on short-term and nominal economic growth.
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Copyright (c) 2026 Yahya Neisi, Seyed Abdollah Mousavi, Heidar Zobeidi (Author)
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