BEYOND CONVENTIONAL METRICS: DEVELOPING A FALAH-BASED ECONOMIC INDICATOR FOR MEASURING NATIONAL PROSPERITY AND WELL-BEING
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Economic Indicator, National Prosperity, Well-Being Measurement
Abstract
Conventional measures of national prosperity, particularly Gross Domestic Product, have long dominated economic evaluation despite their inability to capture ethical, social, environmental, and spiritual dimensions of well-being. This limitation has generated increasing concern regarding the adequacy of growth-centered metrics in reflecting holistic human flourishing. This study aims to develop a Falah-Based Economic Indicator (FBEI) as an alternative framework for measuring national prosperity and well-being grounded in the normative foundations of Islamic economics. The research employs a mixed-methods design that integrates conceptual analysis with quantitative index construction, drawing on secondary national-level data across economic, social, governance, environmental, and moral–spiritual dimensions. Composite indicators are constructed using normalization, weighting, and aggregation techniques aligned with the principles of falah. The results demonstrate that the FBEI captures significant disparities between material affluence and holistic prosperity, revealing that ethical governance, environmental balance, and moral–spiritual well-being exert independent and statistically meaningful influences beyond income levels. Countries with similar economic performance often display divergent falah-based outcomes, underscoring the inadequacy of conventional metrics as comprehensive measures of prosperity. The study concludes that a falah-based indicator offers a conceptually coherent and empirically viable alternative for assessing national well-being. This framework contributes to development economics by integrating ethical purpose into prosperity measurement and provides policymakers with a more balanced tool for evaluating sustainable and inclusive development.
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Copyright (c) 2026 Intan Nurrachmi, Sara Hussain, Lucy Taylor
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