It appears to be a combination of some of these factors, along with others not mentioned here. Ibn Khaldun’s analysis appears to be a good foundation to go off. [Thread]

Ibn Khaldun makes an important distinction between what he calls العُمران الحضري and العمران البدوي, which, for convenience’s sake, I’ll translate as urban civilisation and rural/Bedouin lifestyle.
He notes that the rural world is largely nomadic, and, as such, Bedouins build character traits that assist the survivalist lifestyle — e.g. the fact that they have to kill snakes that might pop up at any time during their travels helps them build courage and bravery.
The lack of stability and a proper settlement means they don’t really have the luxury of sitting down to let their minds wonder around. They thus build a preservation mindset, which manifests itself through emphasis on memorisation and transmission.
Inhabitants of urban world, on the other hand, are largely settled and established. This means they face less attacks from snakes, lions or danger of human attack from other tribes. Thus, they don’t build the courage and bravery of the Bedouins.
However, it also means they have the privilege of having little to worry about. This enables them to be more creative in engaging with the knowledge they have, and are also open to exploring the knowledge of other civilisations (this will be important).
Ibn Khaldun thus argues that creative knowledge and new crafts develop only in urban civilisations, as the inhabitants there do not have the preservation mindset of the survivalist Bedouins. This brings us to the difference in methodology between Ahl al-Hadith and Ahl al-Raʾy.
The Hijaz (and the Arabian peninsula in general) was largely tribal. They had the living practice of the significant number of companions who had remained there (hence, a lot of hadith). They focused on preserving that tradition and transmitting it at it is/was.
Meanwhile in Iraq, scholars naturally had access to fewer hadiths in comparison to the scholars of the Hijaz, as the number of companions who migrated there were far less than those who remained in Madinah, for instance.
Adding to that their access to the knowledge of the Persians, their urban privilege enabled them to explore the limited traditions they had in a creative and critical way.
This led to the rise of qiyas, where more and more rulings were extrapolated from existing traditions. And those rulings became precedence for later rulings to be extrapolated (takhrij).
Yes, in theory, this means that if an Iraqi were to meet a Hijazi who had an explicit hadith that disproves a theoretical extrapolated (mukharraj) ruling, he would have accepted it. However, in practice, life works differently.
As generations go on, local regions create a respected tradition. Going against that tradition is culturally sensitive and causes a number of issues, all the way from bias to fear of being outcasted. Knowing this, Imam Shafiʿi came along and presented a harmonised methodology.
While he was certainly influential, his approach wasn’t accepted by all groups. The positions of Ahl al-Raʾy then moved from a methodology to a school of particulars. As they relocated to other cities, we see their approaches change, which further confirms Ibn Khaldun’s theory.
For instance, the Hanafis of Syria and Egypt lived in multi-madhhab, urban societies; while the Hanafis of Transoxiana (ما وراء النهر) lived in relatively rural, homogenous societies. As such, their own approaches differ wildly.
This is also why you see the Hanafis of rural India having a preservation-centric attitude towards their Fiqh, while Hanafis in urban London typically revert to the methodological approach to fiqh, as per the nature of urban civilisations.
Back to the ancients, Imam Shafiʿi was well-travelled and was thus familiar with the ‘theory’ of Iraq along with the ‘data’ of Hijaz. (Notice how this resembles the philosophy vs science debate.)
He accepted the rigorous hadith methodology of the Ahl al-Hadith along with the methods of deducting law (طرق الاستدلال) of the Ahl al-Raʾy. He filled in the gaps left by both approaches and formed his own harmonised methodology.
This methodology marries the philosophy with the science. Rulings of fiqh were understood in light of hadith, and hadiths of ahkam were interpreted in light of both ʿulum al-hadith as well as usul al-fiqh.
This gave birth to a nuanced school that undoubtedly is the most influential school in the world.
There is more to say about why the Hanafi school gave the Qurʾan a higher epistemic weight, along with the contributions of Imam Ahmad Ibn Hanbal, but Twitter’s threads have limitations, so I’ll stop here.

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