Market, Government and Malaysia's New Economic Policy

Rajah Rasiah and Ishak Shari (2001) "Market, government and Malaysia's New Economic Policy", Cambridge Journal of Economics, 25(1): 57-78.

Posted: 3 Jul 2013

See all articles by Rajah Rasiah

Rajah Rasiah

University of Malaya

Ishak Shari

University of Malaya (UM)

Date Written: 2001

Abstract

Leading economic institutions such as the World Bank have argued that liberalization holds the key to growth, poverty alleviation and redistribution. Even recent efforts to model increasing returns within the framework of new growth theories have not resulted in prescriptions for stronge roles for government. The fast-growing Southeast Asian economies are still being used to demonstrate causation between liberalization, growth, poverty alleviation and redistribution. Using Malaysia as an example, this paper argues that growth, poverty alleviation and redistribution was achieved in the country through interventionist policies, as well as, market coordination. Throughout the New Economic Policy Period (1970-90) incentives were given to both the import-substitution and the export-oriented manufacturing sectors, the state made strong forays into the market to redress poverty and inequality. The paper also argues that poorly coordinated government intervention generated substantial unproductive rent seeking.

Keywords: Market, government, new economic policy, Malaysia

JEL Classification: H3, H5, L5

Suggested Citation

Rasiah, Rajah and Shari, Ishak, Market, Government and Malaysia's New Economic Policy (2001). Rajah Rasiah and Ishak Shari (2001) "Market, government and Malaysia's New Economic Policy", Cambridge Journal of Economics, 25(1): 57-78., Available at SSRN: https://ssrn.com/abstract=2002390

Rajah Rasiah (Contact Author)

University of Malaya ( email )

University of Malaya
Faculty of Economics and Administration
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia
60379673606 (Phone)
60379673719 (Fax)

Ishak Shari

University of Malaya (UM)

Kuala Lumpur, Wilayah Persekutuan 50603
University of Malaya (UM)
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia

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