Monday, August 22, 2011

Malaysia – a simple institutional analysis

Malaysia is classified as a non – democratic state by all international index measuring quality of democracies. This is also affirmed in academic circles.

By New Mandala (Greg Lopez)

The works of Angus Maddison on world economic history identifies that economic growth only took off after the British Industrial Revolution. Maddison notes that from the year 1000 – 1820, advance in per capita income was a slow crawl with per capita income rising by about 50 per cent but population increased fourfold. Since 1820 however, per capita income exceeded population growth with per capita income rising by more than eightfold and population more than fivefold. Maddison also notes that these growth rates were concentrated in Western Europe.

Michael Spence, in a lecture based on his latest book, “The Next Convergence: The Future of Economic Growth in a Multi-Speed World” quotes the works of Maddison and points out that the higher growth rates since the British Industrial Revolution benefited approximately only 15 per cent of world population, namely the elites in Western Europe and its European offshoots. However, since World War II (WWII), far more people in far more geographical regions have benefited from this open international economic order created after WWII.

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