RELIGION BASED ECONOMIC PARADIGMS AND POLICY INNOVATION: LESSONS FROM MUHAMMAD BAQIR AL-SADR FOR SUSTAINABLE DEVELOPMENT IN SUMATRA UTARA

Abstract

This paper explores how Muhammad Baqir al-Sadr’s Islamic economic principles can inform regional policy innovations to address welfare challenges in Indonesia. A mixed-method approach is adopted, combining normative analysis of al-Sadr’s works with econometric evaluation of secondary data from 1999–2023. Multiple regression models assess the effects of poverty, unemployment, and growth on inflation, as well as the impact of education, health, and government expenditure on the Human Development Index (HDI). Results show that growth significantly lowers inflation, while poverty and unemployment exert minimal influence. Education and health strongly enhance HDI, whereas public expenditure proves less effective. The discussion emphasizes the necessity of redistributive justice, human capital development, and community-centered policy. The study concludes that al-Sadr’s integration of ethical, spiritual, and structural values provides a holistic paradigm for sustainable and inclusive development policies.