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Previous studies have challenged the Human Development Index’s (HDI) ability to emulate the achievement of falāh (happiness). This paper aims to evaluate the role of religious values in establishing a positive link between the current measurement of development and falāh.

First, this study derives an improved value-loaded development measure from the concept of Maqasid al-Shari’ah (the higher objectives of Islamic law). Second, this paper compares the calculated Maqasid al-Shari’ah Index (MSI) with the HDI of some Organisation of Islamic Cooperation (OIC) countries by using the parametric pair difference z-test and t-test along with the non-parametric Wilcoxon signed-rank test. Finally, the relationship of both indices and the proxy of falāh are examined by using the ordinary least square and the generalised method of moments estimations.

As far as the religious-led development is concerned, the HDI underestimates OIC countries’ development progress. Here, the MSI can better embody the attainment of falāh than the HDI.

This study only covers limited OIC countries due to the data availability issue.

The cultural-based development stemming from the religious values proves useful for putting the government effort towards the attainment of the objective of human well-being in the right direction.

To the best of the authors’ knowledge, this is the first study examining the empirical relationship between the MSI and falāh.