Islamic socialism is a discourse that seeks to integrate Islamic spirituality and socialism, promoting religious behavior, state ownership, and greater distribution of resources. Some of the most prominent examples of Muslim nation-states associated with the ideology are discussed below.

One of the first attempts was developed by Pakistani statesman Zulfikar Ali Bhutto (1928-1979) and the Pakistan People’s Party (PPP), who adopted the term in response to severe criticism from conservative ulema about their un-Islamic socialism. To help alleviate criticism, Bhutto often referred to the "equality of Islam" (Raza 1997). From 1971 he introduced a range of socialist populist policies aimed at greater redistribution of resources. Overall though, particularly after 1973, Bhutto failed to reconcile the differing expectations of his supporters and urban industrialists and rural landlords, and he became ideologically distanced from Islamic socialism (Noman 1988; Raza 1997; Syed 1992) until he was overthrown in a military coup in 1977.

Islamic socialism is most widely associated with Muammar Abu Minyar al-Qadhafi of Libya, who came to power in 1969. He had been heavily influenced by the leadership of, and Arab socialist nationalism expounded by, the Egyptian leader Gamal Abdel Nasser (19181970). Qadhafi sought to bring about political, social, economic, and cultural change. The Third Universal (or International) Theory was introduced and expounded in Qadhafi’s Green Book, which was published in three parts (1975, 1977, 1978). Qadhafi was critical of the excessive materialism and inequalities associated with capitalism, as well as communism’s atheism and stifling of individual development. His new doctrine was to be an alternative to the dominant metanarratives, and he incorporated elements of Arab nationalism, Islam, and socialism. The Green Book addressed perceived problems within liberal democracy, economics, and social relations. A number of key concepts and practices were promoted, including Jamahiriya (state of the masses), "popular democracy" through direct participation in congresses and committees (Qadhafi 1975, p. 25), state welfare, equity, and religious behavior and morals. Large-scale private ownership and opportunities for "exploitation" were restricted (El-Kikhia 1997; Monti-Belkaoui and Riahi-Belkaoui 1996).

Since 1969, modernization processes have been implemented in Libya that have resulted in vastly improved communication and transportation networks and health and education facilities. However, the economy is overreliant on imports and oil revenues that have largely funded the advancements. Qadhafi’s regime has been widely associated with repression of political dissidents, armed interference in neighboring states, and international terrorism. Following the drop in oil revenues in the 1980s, the onset of trade sanctions, periodic shortages of basic goods, and political isolation, Libya’s economic and political policies were revised. Measures of economic liberalization have been introduced at the expense of Islamic socialist doctrine; these include privatization, expansion of public sector companies, and foreign investment, particularly after the lifting of United Nations sanctions in 2003.

During the 1970s, Islamic socialism, or scientific socialism as it was called by the regime, was also implemented by President Mohammed Siad Barre (19191995) in Somalia. Scientific socialism also sought to integrate religion and socialism and placed emphasis upon community development through self-reliance. But shifting alliances in the late 1970s contributed to closer ties with the West and a restructuring of debt that resulted in a loss of state macroeconomic control, greater liberalization, and the effective end of "scientific socialism."

Today, Islamic socialism attracts little support. The inability of "Islamic socialist" regimes to deliver their promises contributed to the doctrine losing credibility and being replaced by political Islam as the "third way."

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