Institutional Governance and the Development Financing Role of Productive Waqf: Evidence from Indonesia
DOI:
https://doi.org/10.14421/jbmib.2026.0502-02Keywords:
Development financing, institutional economics, nâzir, productive waqf, digital governanceAbstract
Purpose — This study examines how institutional governance enables productive waqf to function as a development financing instrument in Indonesia. Building on institutional economics, it argues that waqf productivity depends on governance quality rather than asset availability alone.
Design/methodology/approach: This qualitative study uses a systematic literature review and document analysis of academic publications, regulatory documents, institutional reports, financial statements, and waqf management documents. An illustrative Dompet Dhuafa case enriches the empirical context. Five governance dimensions were analyzed: transparency, accountability, institutional capacity, regulatory support, and nazhir professionalism, using thematic analysis and source triangulation.
Findings: Institutional governance emerges as a primary mechanism linking waqf asset management to development financing. The five governance dimensions strengthen information access, oversight, compliance, resource management, and asset productivity. Digital governance reinforces these mechanisms through improved information access, transaction traceability, monitoring, and accountability. Comparative lessons from Malaysia and Türkiye emphasize regulatory coordination, professional management, administrative standardization, and institutional integration.
Originality/value: This study positions institutional governance as a primary mechanism transforming waqf assets into development financing by integrating five governance dimensions within an institutional economics framework and positioning digital governance as a reinforcing mechanism.
Research implication/limitation: Strengthening productive waqf requires clearer institutional roles, stronger regulatory supervision, standardized reporting, professional naẓīr development, and integration with Islamic financial institutions and digital systems. Reliance on secondary data and an illustrative case limits generalizability and causal inference.
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