Privatization in Malaysia: Regulation, Rent-Seeking and Policy Failure, 1st Edition (Paperback) book cover

Privatization in Malaysia

Regulation, Rent-Seeking and Policy Failure, 1st Edition

By Jeff Tan


252 pages

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In recent years, privatisation has fallen out of favour in many countries because the underlying political factors have not been well understood. This book examines Malaysia’s privatisation programme, focusing on how political constraints resulted in the failure of four major privatisations: the national sewerage company (IWK), Kuala Lumpur Light Rail Transit (LRT), national airline (MAS), and national car company (Proton). It considers why developing countries such as Malaysia might want to embark on privatisation, the factors that lead to policy failure, and what is needed to make it work. It shows clearly that political motives driving privatisation often dominate purely economic considerations, and thus it is necessary to analyse privatisation within the specific country context. It argues that failure in the Malaysian case was due to political considerations that compromised institutional design and regulatory enforcement, leading to problems associated with corruption. It concludes that privatisation does not necessarily improve incentives for efficiency or enhance the finance available for capital investment, and that successful privatisation depends on the state’s institutional and political capacity to design and manage an appropriate set of subsidies. Overall, this book is a comprehensive examination of privatisation in Malaysia, providing important insights for understanding the political economy of this process in other developing countries.

Table of Contents

1. Introduction: Why Privatize? 2. Privatization, Rents and Rent Seeking 3. Institutional and Political Failure: Privatization in Malaysia 4. Universal Access and Private Provision: Malaysia’s National Sewerage 5. The Fallacy of Privatized Urban Rail: Kuala Lumpur Light Rail Transit 6. Perverse Incentives: Malaysia Airlines 7. Rents and Industrial Upgrading: Proton 8. Summary and Conclusion

About the Author

Jeff Tan is an Assistant Professor at the Aga Khan University Institute for the Studies of Muslim Civilisations (AKU-ISMC) in London where he lectures in development studies. He specialises in the political economy of development and his research interests include the privatisation of public utilities and infrastructure, governance and globalisation.

About the Series

Routledge Malaysian Studies Series

The Routledge Malaysian Studies Series publishes high quality scholarship that provides important new contributions to knowledge on Malaysia. It also signals research that spans comparative studies, involving the Malaysian experience with that of other nations.

This series, initiated by the Malaysian Social Science Association (MSSA) to promote study of contemporary and historical issues in Malaysia, and designed to respond to the growing need to publish important research, also serves as a forum for debate on key issues in Malaysian society. As an academic series, it will be used to generate new theoretical debates in the social sciences and on processes of change in this society.

The Series covers a broad range of subjects including history, politics, economics, sociology, international relations, geography, business, education, religion, literature, culture and ethnicity. The series will encourage work adopting an interdisciplinary approach.

New proposals for the series are welcomed.  Prospective authors should in the first instance contact the series editors, whose email addresses are:;; and


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Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Development / Business Development
BUSINESS & ECONOMICS / International / Economics
POLITICAL SCIENCE / Public Policy / Economic Policy
SOCIAL SCIENCE / Ethnic Studies / General