Digitalization as an Alternative Pillar: Moderation of Economic Constraints on IHDI in OIC Countries

Abstract

This study aims to analyze the role of digitalization  as a moderator variable in the relationship  between economic limitations and the Islamic  Human Development Index (IHDI) in the  Organization of Islamic Cooperation (OIC)  countries. The main problem raised is the low  achievement of IHDI and the non-optimal use of  digitalization in supporting human development.  This study uses a quantitative approach with panel  data from 2010 to 2023, with a sample consisting  of 10 OIC countries that have complete and  representative data. The analysis model used is  moderated regression analysis (MRA) with the  Fixed Effect Model (FEM) approach.The results  show that economic limitations have a positive  and significant effect on IHDI. While digitalization  does not have a direct effect, it is able to  strengthen the effect of the economy on IHDI as a  moderating variable. Thus, digitalization can be an  alternative pillar in Islam-based human  development, especially in the midst of fiscal  constraints and social inequality. Therefore, OIC  countries need to integrate economic  development strategies with digital  transformation that is inclusive and based on  maqāṣid al-sharī'ah to create sustainable social  justice.