Al Irtifaq al-Thalith :

With the completion of second stage, the human society develops into a city stage. Shah Waliullah emphasizes that city does not mean walls, buildings and market. The city is a kind of relations between different groups of people based on mutual dealings and cooperation. The integrity, interest and independence of the city are maintained through the Institution of Imam, who acts as a physician to maintain a healthy body of the city.
In this stage it will be the duty of the government to see that proper allocation of employment is done in different industries and services. Traders and farmers are encouraged in their professions and arrangement for their proper education is also made. He emphasizes that city develops with easy taxation and employment of necessary number of officials.

Al Irtifaq al-Rabi:

In this stage the human society and the Institution of the government adopts an international character and need arises to have a government of all the governments (Khalifat al Khulafa).
This is the final stage of socio-economic development. Shah Waliullah does not assign any economic role to the government in this stage, except that it will need a lot of men and material to perform the duty of keeping peace, providing Justice and check exploitation.

Later Development in Islamic Economic Thought:

Although Muslim scholars have discussed the economic principles of Islam earlier, much attention has been paid to the subject in the twentieth century. It started in the third decade and specialized works appeared in the fourth. Its commencement was due to the world wide economic crises during the thirties and forties and the increasing exposure of Muslim mind to the socialist doctrines and the impact of Russian Revolution. There was acceleration in these writings during the fifties and the sixties due to the emergence of a number of independent Muslim countries and the rise of powerful Islamic movements which raised hopes of serious attention to the application of the Islamic teachings on the practical affairs of the new state. On one hand Islamic Economic principles were thoroughly discussed on the other, it was presented as an alternative to neoclassical economics and other economic doctrines rooted in western social thought. Among the Muslim Scholars of the modern times Muhammad Baqir al Sadr has emerged as a distinguished economist. He wrote a comprehensive book on economics „Iqtisaduna‟ besides having academic scholarship in other disciplines of knowledge like Jurisprudence, exegeses, Philosophy, history, theology and Islamic culture. In Iqtisaduna he has made a detailed study on capitalism, socialism and communism and the book primarily deals with various aspects of Islamic economy.