Public Finance and Social Policy in OIC and Scandinavian Countries: A Comparative Study of Malaysia and Sweden

Abstract

This study compares the public and social finance systems in Malaysia and Sweden, embodying contrasting ideological paradigms. Malaysia features a dual fiscal structure blending Islamic values via zakat and waqf under decentralized religious governance. Sweden represents a centralized secular welfare state, relying on progressive taxation and universal services. Using a qualitative comparative case study with secondary data, the analysis examines fiscal legitimacy, institutional design, redistribution, and socio-economic outcomes. Malaysia's model draws on moral-religious principles with targeted redistribution to syariah-defined groups (asnaf). Sweden employs a universalistic social contract approach, fostering egalitarian public services. It reveals that public finance systems reflect their normative foundations. Islamic models emerge as contextually valid and ideologically coherent, challenging views of Western secular dominance. This research advocates plural welfare models and inclusive theorizing in public finance scholarship. Compared with prior studies that tend to treat zakat/waqf and welfare taxation as separate technical topics, this article offers an explicitly ideology centered comparison of Malaysia and Sweden as complete fiscal welfare models, clarifying how normative legitimacy shapes redistribution outcomes.