Productive Investment within the Governance Framework of the Prophetic State; An Institutional Approach to Reforming Iran's Economic Structure

In the last decade, the Iranian economy has been facing the challenge of freezing capital in unproductive sectors and structural imbalances. The present study aims to review the governance model of the Prophetic government in the connection between the public finance system and investment promotion policies, seeking to extract implications for reforming the country's productive structure. Using a descriptive-analytical method and an institutional economics approach, this study examines the economic life of the Prophet Muhammad (PBUH) not as a historical report, but as a regulatory and facilitating system. The findings of the study show that the Prophetic government, by designing a transparent and discipline-oriented financial system, reduced investment risk and, through institutions such as production quotas and a tax on stagnant money (liquidity zakat), increased the cost of speculative activities and strengthened the incentive to enter the productive sector. Unlike current models that focus on price increases, the Prophetic model is based on facilitating access to basic resources and participation in profits and losses. The results show that the guidance of credit in early Islam was achieved by severing the link between wealth and rent and replacing the debt system with participatory contracts. The implications of this model for Iran are the need to change the paradigm from imbalance management to productivity management and the real productivity of government assets.