Public Finance and Islamic Economic Principles: Evaluating Fiscal Policy for Social Welfare Enhancement

Abstract

This study examines the relationship between public finance and Islamic economic principles in evaluating fiscal policy effectiveness for social welfare enhancement. The research aims to analyze how fiscal policy can integrate Islamic economic values to strengthen distributive justice, reduce socio-economic inequality, and improve inclusive welfare governance. The study employed a qualitative research method using a case study design because this approach enables an in-depth exploration of institutional practices, policy implementation, and ethical dimensions associated with welfare-oriented fiscal systems. The research was conducted in Jakarta, West Java, and Yogyakarta, Indonesia, due to the strategic role of these regions in public finance administration, Islamic economic development, and academic policy discourse. Data were collected through in-depth interviews, documentation analysis, and literature review involving ten key informants consisting of policymakers, Islamic economic scholars, fiscal analysts, and Islamic social finance practitioners selected through purposive sampling based on expertise and institutional relevance. The findings reveal that integrating Islamic fiscal instruments such as zakat and waqf with public finance policies strengthens social protection, equitable redistribution, and welfare sustainability. The study recommends stronger institutional coordination, transparent fiscal governance, and integrated welfare policies to enhance inclusive socio-economic development.