Cover Image

Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective

By using fiscal datasets from 1990 to 2010 in Malaysia, a panel Dynamic-OLS (DOLS) is employed to investigate the extent to which fiscal decentralisation can support state level economic growth as proposed in the Market preserving federalism (MPF) theory. Despite having a more centralised federalism...

Full description

Saved in:
Bibliographic Details
Main Authors: Abd. Ghani, Judhiana, Grewal, Bhajan, Ahmed, Abdullahi D., Mohamed Nor, Norashidah
Format: Article
Published: 2019
Online Access:http://psasir.upm.edu.my/id/eprint/79911/
https://www.ukm.my/jem/article/fiscal-decentralisation-and-economic-growth-in-malaysia-a-market-preserving-federalism-perspective/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.upm.eprints.79911
record_format eprints
spelling my.upm.eprints.799112023-03-24T02:03:22Z http://psasir.upm.edu.my/id/eprint/79911/ Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective Abd. Ghani, Judhiana Grewal, Bhajan Ahmed, Abdullahi D. Mohamed Nor, Norashidah By using fiscal datasets from 1990 to 2010 in Malaysia, a panel Dynamic-OLS (DOLS) is employed to investigate the extent to which fiscal decentralisation can support state level economic growth as proposed in the Market preserving federalism (MPF) theory. Despite having a more centralised federalism system, the result strongly shows that a fiscal decentralisation variable, (i.e. a composite ratio of decentralisation) has significant coefficient and positive relationship with state economic growth. This implies that a certain degree of fiscal decentralisation in Malaysia is able to contribute to states’ economic performance by adopting fiscal decentralisation simultaneously on both dimensions of revenue and expenditure. This validates the view that decentralisation is a multi dimentional measure. The study shows that Malaysia also would be able to benefit from a system of federalism which empowers state governments to make policies for their jurisdictions and to compete with one another for better services and higher investment. Hence, competition is the mechanism that creates incentives that result from satisfying the MPF conditions and subsequently leading to the achievement of higher state economic performance. 2019 Article PeerReviewed Abd. Ghani, Judhiana and Grewal, Bhajan and Ahmed, Abdullahi D. and Mohamed Nor, Norashidah (2019) Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective. Jurnal Ekonomi Malaysia, 53 (1). pp. 153-170. https://www.ukm.my/jem/article/fiscal-decentralisation-and-economic-growth-in-malaysia-a-market-preserving-federalism-perspective/ 10.17576/JEM-2019-5301-13
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description By using fiscal datasets from 1990 to 2010 in Malaysia, a panel Dynamic-OLS (DOLS) is employed to investigate the extent to which fiscal decentralisation can support state level economic growth as proposed in the Market preserving federalism (MPF) theory. Despite having a more centralised federalism system, the result strongly shows that a fiscal decentralisation variable, (i.e. a composite ratio of decentralisation) has significant coefficient and positive relationship with state economic growth. This implies that a certain degree of fiscal decentralisation in Malaysia is able to contribute to states’ economic performance by adopting fiscal decentralisation simultaneously on both dimensions of revenue and expenditure. This validates the view that decentralisation is a multi dimentional measure. The study shows that Malaysia also would be able to benefit from a system of federalism which empowers state governments to make policies for their jurisdictions and to compete with one another for better services and higher investment. Hence, competition is the mechanism that creates incentives that result from satisfying the MPF conditions and subsequently leading to the achievement of higher state economic performance.
format Article
author Abd. Ghani, Judhiana
Grewal, Bhajan
Ahmed, Abdullahi D.
Mohamed Nor, Norashidah
spellingShingle Abd. Ghani, Judhiana
Grewal, Bhajan
Ahmed, Abdullahi D.
Mohamed Nor, Norashidah
Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective
author_facet Abd. Ghani, Judhiana
Grewal, Bhajan
Ahmed, Abdullahi D.
Mohamed Nor, Norashidah
author_sort Abd. Ghani, Judhiana
title Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective
title_short Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective
title_full Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective
title_fullStr Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective
title_full_unstemmed Fiscal decentralisation and economic growth in Malaysia: a market preserving federalism perspective
title_sort fiscal decentralisation and economic growth in malaysia: a market preserving federalism perspective
publishDate 2019
url http://psasir.upm.edu.my/id/eprint/79911/
https://www.ukm.my/jem/article/fiscal-decentralisation-and-economic-growth-in-malaysia-a-market-preserving-federalism-perspective/
_version_ 1761620393777430528
score 13.211869

Similar Items