Academic journal article Southeast Asian Studies

Rents, Accumulation, and Conflict in Malaysia

Academic journal article Southeast Asian Studies

Rents, Accumulation, and Conflict in Malaysia

Article excerpt

I Introduction

Malaysia's political economy is usually analyzed in terms of policy swings between state intervention and economic liberalization. The former is seen as a response to political pressures for redistribution and the latter as a response to the growth imperative. The withdrawal of the state through economic liberalization is thus considered desirable by reducing rent seeking and corruption associated with state intervention. The implicit assumption here is that state intervention is intrinsically inefficient (because politicians pursue their own interests) and is an invitation to rent-seeking behavior. This draws from public choice theory (see, e.g., Krueger 1974; 1990; Buchanan 1980; Boycko et al. 1996) and is consistent with the elite-centered approach where state intervention is analyzed in terms of political capture of the state by individual politicians who then redistribute public resources to secure political support (see, e.g., Jesudason 1989; Bowie 1991; Gomez 2002).

Several problems can be identified with the elite-centered explanation. First, the public choice critique of state intervention and rents fails to distinguish between different types of rents and ignores the role of some types of rents in the development process historically. Second, the discussion of rent seeking largely excludes discussion of rent seekers, that is, the social forces that pursue rents and influence the allocation of rents. Instead, elite-centered explanations focus on the role of individual political leaders, with analysis of the state and state intervention similarly removed from social forces that the state is invariably connected to. Third, conflict tends to be examined in terms of interethnic rivalries that are seen as the cause of political instability rather than the outcome of pressure from social forces seeking rents.

This paper provides an alternative approach to the issue of conflict in Malaysia through an analysis of rents in order to provide a broad overview of the relationship between the economic imperative for growth and political imperative for stability since independence. It develops a framework to link episodes of conflict and political instability to the allocation of rents and pattern of accumulation in Malaysia. It does this by distinguishing between the different types of rents needed in the development process, the social forces that drive the allocation of these rents, and the impact of the allocation of rents on growth and stability (section II). The paper then applies this framework to Malaysia (section III) and argues that the emergence and expansion of social forces, specifically the Malay intermediate classes, increased contestation and conflict over the allocation of rents. This compromised the state's ability to balance the political imperative for stability with the economic imperative for growth because of the nature of the state's relationship with these classes. Malaysia's long-term economic slowdown can be traced to the state prioritizing rents for accommodation (and hence stability) over rents for learning and accumulation. This corresponds with premature deindustrialization and the increasing frequency and intensity of conflict.

II Rents, Accumulation, and Conflict

The development process entails the transfer of resources from less to more productive sectors and classes. Historically this redistribution has been associated with the process of industrialization and occurred through the allocation of rents for learning (to promote manufacturing) and accumulation (to support the emergence of an industrial capitalist class). As any form of economic redistribution is invariably contested, rents associated with economic growth will usually need to be supplemented with rents for accommodation to secure political stability, usually by buying off dissent or purchasing support during a period of socioeconomic transformation. The allocation of rents in the development process will thus be informed by the imperatives for growth and stability. …

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