 The elusive quest for high income status—Malaysia and Thailand in the post-crisis yearsKunal Sen and Matthew Tyce Structural Change and Economic Dynamics, 2019, vol. 48, issue C, 117-135 Abstract: Both Malaysia and Thailand were seen to be part of the miracle growth economies of East Asia and fast moving into high income status in the early 1990s. Following the Asian Financial Crisis (AFC) of the mid 1990s, both countries have observed prolonged growth slowdowns. In this paper, we offer a political economy explanation of the growth slowdown in Malaysia and Thailand in their post AFC phases. We argue that the nature of the political settlement in these two countries determined a growth strategy that was predicated on offering open deals in the export-oriented manufacturing sector that were accessible to most firms, while at the same time, offering closed deals to politically connected firms in the natural resource and services sectors. As the political settlement moved to a vulnerable authoritarian one in both countries, such a dualistic deals strategy became patronage based over time and detrimental to growth. Keywords: Political settlement; State-business relations; Asian Financial Crisis; Growth slowdown; Middle- income trap; Malaysia; Thailand (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:48:y:2019:i:c:p:117-135 DOI: 10.1016/j.strueco.2017.11.007 Access Statistics for this article Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen More articles in Structural Change and Economic Dynamics from Elsevier |
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