ABSTRACT
The social and welfare state structure had more than quadrupled the share of the state in economy in most developed nations in a century. The state could not find a successful solution to inequality in income and wealth distribution and had to face high public debts. By the end of 20th century, state’s efforts to create social justice were associated with concepts such as welfare state crisis and financial crisis. Market oriented liberal theory which supported economic growth was implemented following 1980s; however the relevant economic policies were unable to find a solution to inequality and worsened the situation. In that regard, this study aims to discuss whether Islamic economic perspective can find solution to wealth inequality in the world with its institutions and implementations. In comparison to welfare state’s social transfer implementations which result in ineffectuality due to asymmetrical information issues, we will try to analyze the success rate of zakat to overcome inequality -which is the contribution of a certain portion of one's wealth as a religious practice- in Islamic economy model that suggests ‘’starting to help those around you’’.