Khaled Abou El Fadl in the Boston Review:
For Islam, democracy poses a formidable challenge. Muslim jurists argued that law made by a sovereign monarch is illegitimate because it substitutes human authority for God’s sovereignty. But law made by sovereign citizens faces the same problem of legitimacy. In Islam, God is the only sovereign and ultimate source of legitimate law. How, then, can a democratic conception of the people’s authority be reconciled with an Islamic understanding of God’s authority?
Answering this question is extraordinarily important but also extraordinarily difficult, for both political and conceptual reasons. On the political side, it must be said at the outset that democracy faces a number of practical hurdles in Islamic countries—authoritarian political traditions, a history of colonial and imperial rule, and state domination of economy and society. But philosophical and doctrinal questions are important, and I propose to focus on them here as the beginning of a discussion of the possibilities for democracy in the Islamic world.
More here.