- Thursday, April 11
- 12:15 PM
- Kaiserplatz 7-9, 4th floor, Room 4.006
Robin Hood or Crony Capitalism? Income Inequality Trends in Malaysia (1984-2014) Under Protracted Affirmative Actions
In this paper, we document the evolution of income inequality not only at the national level (for the period of 1984-2014) but also by ethnic groups in Malaysia for the period of 2002-2014. To this end we combine national accounts, household surveys, fiscal data, and demographic statistics. To our knowledge this is the first attempt to produce inequality measurements of Malaysia, which are fully consistent with national accounts. Our research shows that despite its exceptional growth rate the economic growth has been inclusive. The bottom 50% and the middle 40% benefits significantly in the economic growth compared to top 10% or top 1%. Interestingly, among the ethnic groups, the highest growth of real income per capita accrued to Bumiputera in the top 1%. Their impressive income growth rates stand in sharp contrast to the substantially lower income growth rates of the Indians and Chinese in the top 1%, although 60% of the adults in top 1% income group are Chinese, compared to 33% Bumiputeras, and 6% Indians. We conclude that in this period Malaysia’s growth features inclusive Robin Hood style redistribution between income classes, but with a twist between racial groups.