Factors affecting the human development status of muslim countries

Abstract

This study analyses the relationship between human development and two types of factors: internal and external. Internal factors include economic inequality, political instability, social capital, knowledge creation, and natural resources. The external factor is colonization. The Organization of Islamic Cooperation is the second largest organization after the United Nations, consisting of 57 Muslim countries, but it is underdeveloped compared to other countries. This study comprehensively analyses Muslim countries' economic, political, social, educational, natural resource, and colonization legacies. This is because Europe colonized 44 out of 57 Muslim countries. This study uses a data panel model, consisting of 51 Muslim countries with 14 years from 2007 to 2020. To analyze the effect of independent variables on the dependent using the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). However, due to heteroscedasticity in the data, REM is the best model to use. The results show that economic inequality and political instability have a negative effect, knowledge creation and natural resources have a positive effect, but social capital does not have a significant effect. Colonized Muslim countries have lower human development than those that have never been colonized. It is concluded that what affects the underdevelopment of Muslim countries is high economic inequality and political instability, and colonization has a long-term impact on Muslim countries.