  Economic inequality is one of the pivotal issues for most of economic and
social policy makers across the world to insure the sustainable economic growth
and justice. In the mainstream school of economics, namely neoclassical
theories, economic issues are dealt with in a mechanistic manner. Such a
mainstream framework is majorly focused on investigating a socio-economic
system based on an axiomatic scheme where reductionism approach plays a vital
role. The major limitations of such theories include unbounded rationality of
economic agents, reducing the economic aggregates to a set of predictable
factors and lack of attention to adaptability and the evolutionary nature of
economic agents. In tackling deficiencies of conventional economic models, in
the past two decades, some new approaches have been recruited. One of those
novel approaches is the Complex adaptive systems (CAS) framework which has
shown a very promising performance in action. In contrast to mainstream school,
under this framework, the economic phenomena are studied in an organic manner
where the economic agents are supposed to be both boundedly rational and
adaptive. According to it, the economic aggregates emerge out of the ways
agents of a system decide and interact. As a powerful way of modeling CASs,
Agent-based models (ABMs) has found a growing application among academicians
and practitioners. ABMs show that how simple behavioral rules of agents and
local interactions among them at micro-scale can generate surprisingly complex
patterns at macro-scale. In this paper, ABMs have been used to show (1) how an
economic inequality emerges in a system and to explain (2) how sadaqah as an
Islamic charity rule can majorly help alleviating the inequality and how
resource allocation strategies taken by charity entities can accelerate this
alleviation.
