Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy objectives must be appreciated, but various misconceptions, especially regarding affirmative action, have resulted in polarization and stalemate after 50 years of the NEP. Social justice and affirmative action must be conceptualized and evaluated with clarity and rigor, with policy objectives, mechanisms and outcomes aligned. Malaysia needs to systematically formulate a new social justice paradigm, building on the NEP and anchored on the principles of equality and fairness. In the affirmative action sphere, this framework must focus on developing capability and competitiveness, and balance identity, need and merit in the allocation of opportunity.
{"title":"Social Justice and Affirmative Action in Malaysia: The New Economic Policy after 50 Years","authors":"Hwok-Aun Lee","doi":"10.1111/aepr.12404","DOIUrl":"https://doi.org/10.1111/aepr.12404","url":null,"abstract":"<p>Malaysia's New Economic Policy (NEP), promulgated in 1971, established a two-pronged national social justice agenda of poverty reduction, and social restructuring or pro-Bumiputera affirmative action. This distinction of these policy objectives must be appreciated, but various misconceptions, especially regarding affirmative action, have resulted in polarization and stalemate after 50 years of the NEP. Social justice and affirmative action must be conceptualized and evaluated with clarity and rigor, with policy objectives, mechanisms and outcomes aligned. Malaysia needs to systematically formulate a new social justice paradigm, building on the NEP and anchored on the principles of equality and fairness. In the affirmative action sphere, this framework must focus on developing capability and competitiveness, and balance identity, need and merit in the allocation of opportunity.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"18 1","pages":"97-119"},"PeriodicalIF":3.9,"publicationDate":"2022-08-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50135519","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Zhuang (<span>2023</span>) covers a large amount of ground when it comes to issues, countries, and literature. The latter is indicated by the fact that the list of references includes more than one hundred titles.</p><p>My first comment is that Zhuang's paper actually does not do what the title originally indicates. On one side, the spatial coverage is broader than suggested by the title. It covers Australia and New Zealand, that usually are not considered parts of Asia. More importantly, the coverage is narrower as it does not treat income and wealth inequality in Asia as a unit. True the paper deals with the development of inequality in Asian countries and its possible causes. However, it does not attempt to address how inequality at the household level in Asia as an entity has developed.</p><p>For some years a literature studying how household income inequality from a global perspective has evolved. In a recent contribution, Milanovic (<span>2022</span>) reports that the Gini coefficient at the household level for income in Asia as a whole decreased from 59% in 2008 to 55% in 2013, a rather large decrease over a short period.</p><p>It can be claimed that the evolution of income inequality in Asia during the most recent years does not at most, have to do with how inequality within countries has evolved. Instead the main factor is how the average incomes in various countries have changed. For example average income in China and in India has increased more rapidly than in Asia's high-income countries like Japan. As a consequence the middle classes in China and India have grown. On this see, for example, Sicular <i>et al</i>. (<span>2022</span>) who define the “global middle class” as being neither poor nor rich if the people are living in the developed world. In 2018 China's global middle class constituted not less than 25% of China's population and the middle class in India was estimated to 6% of its population. The absolute size of the Chinese middle class was in 2018 nearly double the size of the global middle class in the USA and similar in size to that in Europe.</p><p>My second comment relates to if we should care about rising inequality. Zhuang touches on this issue in his concluding section and refers to the literature on the inequality of opportunity (IOp). A point of departure taken in this literature is that public policy better not try to counteract inequality that is due to effort, but it should focus on inequality due conditions individuals cannot affect (circumstances). Most of the empirical literature aiming to quantify IOp concerns high-income countries but by now there are some papers on China. For example, Yang <i>et al</i>. (<span>2021</span>) show that between 2002 and 2013 and especially between 2013 and 2018 IOp in China declined. In 2002 the large contributors to IOp were region and hukou type at birth. However, in 2018 the contributions of those circumstances had decreased, but that of parents' education had increased.
{"title":"Comment on “Income and Wealth Inequality in Asia and the Pacific: Trends, Causes, and Policy Remedies”","authors":"Bjorn Gustafsson","doi":"10.1111/aepr.12403","DOIUrl":"https://doi.org/10.1111/aepr.12403","url":null,"abstract":"<p>Zhuang (<span>2023</span>) covers a large amount of ground when it comes to issues, countries, and literature. The latter is indicated by the fact that the list of references includes more than one hundred titles.</p><p>My first comment is that Zhuang's paper actually does not do what the title originally indicates. On one side, the spatial coverage is broader than suggested by the title. It covers Australia and New Zealand, that usually are not considered parts of Asia. More importantly, the coverage is narrower as it does not treat income and wealth inequality in Asia as a unit. True the paper deals with the development of inequality in Asian countries and its possible causes. However, it does not attempt to address how inequality at the household level in Asia as an entity has developed.</p><p>For some years a literature studying how household income inequality from a global perspective has evolved. In a recent contribution, Milanovic (<span>2022</span>) reports that the Gini coefficient at the household level for income in Asia as a whole decreased from 59% in 2008 to 55% in 2013, a rather large decrease over a short period.</p><p>It can be claimed that the evolution of income inequality in Asia during the most recent years does not at most, have to do with how inequality within countries has evolved. Instead the main factor is how the average incomes in various countries have changed. For example average income in China and in India has increased more rapidly than in Asia's high-income countries like Japan. As a consequence the middle classes in China and India have grown. On this see, for example, Sicular <i>et al</i>. (<span>2022</span>) who define the “global middle class” as being neither poor nor rich if the people are living in the developed world. In 2018 China's global middle class constituted not less than 25% of China's population and the middle class in India was estimated to 6% of its population. The absolute size of the Chinese middle class was in 2018 nearly double the size of the global middle class in the USA and similar in size to that in Europe.</p><p>My second comment relates to if we should care about rising inequality. Zhuang touches on this issue in his concluding section and refers to the literature on the inequality of opportunity (IOp). A point of departure taken in this literature is that public policy better not try to counteract inequality that is due to effort, but it should focus on inequality due conditions individuals cannot affect (circumstances). Most of the empirical literature aiming to quantify IOp concerns high-income countries but by now there are some papers on China. For example, Yang <i>et al</i>. (<span>2021</span>) show that between 2002 and 2013 and especially between 2013 and 2018 IOp in China declined. In 2002 the large contributors to IOp were region and hukou type at birth. However, in 2018 the contributions of those circumstances had decreased, but that of parents' education had increased.","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"18 1","pages":"45-46"},"PeriodicalIF":3.9,"publicationDate":"2022-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12403","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50145851","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Kanchoochat (<span>2023</span>) provides a useful, multi-level approach to accounting for Thailand's inequality problem, a problem that has persisted despite overall economic growth. Kanchoochat not only rightly links the problem to the country's weak structural transformation, that is, its persistently high agricultural employment and low agricultural productivity, but also highlights the supply-side of the picture by outlining the negative impact of Thai governmental institutions, especially the nonelected oversight bodies, agencies whose theoretical function is to monitor and discipline elected politicians and parties, but actually undermine political accountability and reinforce the weakness of the party system. Equally important, it recognizes the demand-side by describing the impact of precarious, unstable nature of off-farm work and the marginality of on-farm work. Further, it does an excellent job of linking all of these, including informality, to phenomena such as Thailand's weak tax collection.</p><p>I also think the article suggests the utility of three additional, complementary avenues of analysis.</p><p>First, given Kanchoochat's emphasis on the “stickiness” of on-farm employment, it would be useful to devote more attention to what Rigg <i>et al</i>. (<span>2018</span>) label the “classically precarious” nature of nonfarm occupations. Most critically, why has the manufacturing sector not absorbed surplus agricultural labor? Why has Thailand not experienced a “Lewis Turning Point”? This requires some attention to the role of multinational corporations who dominate the more export-oriented sectors of Thai industry. Addressing this issue would not only link the paper to Rodrik's (<span>2016</span>) argument about “premature de-industrialization,” but also suggest the relationship of that phenomenon to socio-economic inequality.</p><p>In addition, it would suggest the need to explore the policy impacts of multinationals who, although they dominate the “commanding heights” of Thai industry and whose interests are clearly part of the policy equation, have little impact on party politics. Indeed, one might argue that their absence from the political realm, along with the weakness of smaller, Thai-owned firms, impedes the development of a more cohesive, programmatic party system that might promote productivity-enhancing policies. All of this could link Kanchoochat's analysis to Thailand's inability to move out of the “middle-income trap” (Doner & Schneider, <span>2017</span>).</p><p>Second, Kanchoochat's analysis could be further deepened by more attention to the ways in which relatively easily accessible revenues have enabled the weak institutions so thoughtfully described in this article. Thailand has, over the decades, benefited from an extensive land frontier, US military spending, robust and diversified agricultural exports, migrant labor, and various forms of foreign direct investment. These revenues have, as suggested by Carrol
{"title":"Comment on “Siamese Twin Failures: Structural and Regulatory Transformations in Unequal Thailand”","authors":"Richard F. Doner","doi":"10.1111/aepr.12402","DOIUrl":"https://doi.org/10.1111/aepr.12402","url":null,"abstract":"<p>Kanchoochat (<span>2023</span>) provides a useful, multi-level approach to accounting for Thailand's inequality problem, a problem that has persisted despite overall economic growth. Kanchoochat not only rightly links the problem to the country's weak structural transformation, that is, its persistently high agricultural employment and low agricultural productivity, but also highlights the supply-side of the picture by outlining the negative impact of Thai governmental institutions, especially the nonelected oversight bodies, agencies whose theoretical function is to monitor and discipline elected politicians and parties, but actually undermine political accountability and reinforce the weakness of the party system. Equally important, it recognizes the demand-side by describing the impact of precarious, unstable nature of off-farm work and the marginality of on-farm work. Further, it does an excellent job of linking all of these, including informality, to phenomena such as Thailand's weak tax collection.</p><p>I also think the article suggests the utility of three additional, complementary avenues of analysis.</p><p>First, given Kanchoochat's emphasis on the “stickiness” of on-farm employment, it would be useful to devote more attention to what Rigg <i>et al</i>. (<span>2018</span>) label the “classically precarious” nature of nonfarm occupations. Most critically, why has the manufacturing sector not absorbed surplus agricultural labor? Why has Thailand not experienced a “Lewis Turning Point”? This requires some attention to the role of multinational corporations who dominate the more export-oriented sectors of Thai industry. Addressing this issue would not only link the paper to Rodrik's (<span>2016</span>) argument about “premature de-industrialization,” but also suggest the relationship of that phenomenon to socio-economic inequality.</p><p>In addition, it would suggest the need to explore the policy impacts of multinationals who, although they dominate the “commanding heights” of Thai industry and whose interests are clearly part of the policy equation, have little impact on party politics. Indeed, one might argue that their absence from the political realm, along with the weakness of smaller, Thai-owned firms, impedes the development of a more cohesive, programmatic party system that might promote productivity-enhancing policies. All of this could link Kanchoochat's analysis to Thailand's inability to move out of the “middle-income trap” (Doner & Schneider, <span>2017</span>).</p><p>Second, Kanchoochat's analysis could be further deepened by more attention to the ways in which relatively easily accessible revenues have enabled the weak institutions so thoughtfully described in this article. Thailand has, over the decades, benefited from an extensive land frontier, US military spending, robust and diversified agricultural exports, migrant labor, and various forms of foreign direct investment. These revenues have, as suggested by Carrol","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"18 1","pages":"71-72"},"PeriodicalIF":3.9,"publicationDate":"2022-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12402","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50145850","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper takes an institutional approach to inequality in Thailand by exploring the country's structural and regulatory transformations. It discusses how Thailand's transition from agriculture to industry and services has been impeded by both the demand and supply sides of government subsidies since the 1950s. The relative failure of structural transformation has slowed down economic catch-up and widened the well-being gap between those inside and outside the agricultural sector. Furthermore, while regulatory transformation has mitigated state-led malaise in certain Asian economies, post-1997 reform in Thailand has incentivized unconventional political actors, such as academics, medical doctors and civil society leaders, to make collective efforts in toppling elected governments in exchange for gaining selection into oversight agencies. The case of Thailand indicates how regulatory reform may create perverse incentives that adversely affect democratization, decentralization, competition, and taxation. Dealing with inequality therefore requires a big push toward progressive structural and regulatory transformations altogether.
{"title":"Siamese Twin Troubles: Structural and Regulatory Transformations in Unequal Thailand","authors":"Veerayooth Kanchoochat","doi":"10.1111/aepr.12400","DOIUrl":"https://doi.org/10.1111/aepr.12400","url":null,"abstract":"<p>This paper takes an institutional approach to inequality in Thailand by exploring the country's structural and regulatory transformations. It discusses how Thailand's transition from agriculture to industry and services has been impeded by both the demand and supply sides of government subsidies since the 1950s. The relative failure of structural transformation has slowed down economic catch-up and widened the well-being gap between those inside and outside the agricultural sector. Furthermore, while regulatory transformation has mitigated state-led malaise in certain Asian economies, post-1997 reform in Thailand has incentivized unconventional political actors, such as academics, medical doctors and civil society leaders, to make collective efforts in toppling elected governments in exchange for gaining selection into oversight agencies. The case of Thailand indicates how regulatory reform may create perverse incentives that adversely affect democratization, decentralization, competition, and taxation. Dealing with inequality therefore requires a big push toward progressive structural and regulatory transformations altogether.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"18 1","pages":"47-68"},"PeriodicalIF":3.9,"publicationDate":"2022-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50154929","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Asep Suryahadi, Ridho Al Izzati, Daniel Suryadarma, Teguh Dartanto
Trust is an important ingredient to improve economic performance and people's welfare by alleviating market failures caused by imperfect information, costly enforcement, or coordination failures. Using the World Values Survey 2018, we estimate the impact of village and district levels inequality on trust in institutions in Indonesia. We find that higher village level inequality has a negative effect only on trust in strangers, while higher district level inequality reduces trust in television, the press, the central government, the courts, and the police. The implication points to the importance of keeping inequality at the aggregate level in check to maintain people's trust in social, political and state institutions.
{"title":"How Inequality Affects Trust in Institutions: Evidence from Indonesia","authors":"Asep Suryahadi, Ridho Al Izzati, Daniel Suryadarma, Teguh Dartanto","doi":"10.1111/aepr.12401","DOIUrl":"https://doi.org/10.1111/aepr.12401","url":null,"abstract":"<p>Trust is an important ingredient to improve economic performance and people's welfare by alleviating market failures caused by imperfect information, costly enforcement, or coordination failures. Using the World Values Survey 2018, we estimate the impact of village and district levels inequality on trust in institutions in Indonesia. We find that higher village level inequality has a negative effect only on trust in strangers, while higher district level inequality reduces trust in television, the press, the central government, the courts, and the police. The implication points to the importance of keeping inequality at the aggregate level in check to maintain people's trust in social, political and state institutions.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"18 1","pages":"73-91"},"PeriodicalIF":3.9,"publicationDate":"2022-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50154928","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Asia–Pacific region's rapid growth and poverty reduction in recent decades have been accompanied by rising income and wealth inequality. Technological progress, globalization, deregulation and market-oriented reform, and financialization have generated many new opportunities, but rewarded capital more than labor, benefited skilled workers more than the unskilled, widened spatial inequality, and produced a growing number of the superrich. For some countries, population aging has also contributed to rising inequality. The present paper provides an update on recent trends of income and wealth inequality in the Asia–Pacific region, examines causes behind rising inequality, and discusses policy actions needed to tackle inequality. It also assesses how the COVID-19 has likely worsened inequality in the region.
{"title":"Income and Wealth Inequality in Asia and the Pacific: Trends, Causes, and Policy Remedies","authors":"Juzhong Zhuang","doi":"10.1111/aepr.12399","DOIUrl":"https://doi.org/10.1111/aepr.12399","url":null,"abstract":"<p>The Asia–Pacific region's rapid growth and poverty reduction in recent decades have been accompanied by rising income and wealth inequality. Technological progress, globalization, deregulation and market-oriented reform, and financialization have generated many new opportunities, but rewarded capital more than labor, benefited skilled workers more than the unskilled, widened spatial inequality, and produced a growing number of the superrich. For some countries, population aging has also contributed to rising inequality. The present paper provides an update on recent trends of income and wealth inequality in the Asia–Pacific region, examines causes behind rising inequality, and discusses policy actions needed to tackle inequality. It also assesses how the COVID-19 has likely worsened inequality in the region.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"18 1","pages":"15-41"},"PeriodicalIF":3.9,"publicationDate":"2022-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50150372","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Comment on “Big Data in Asian Central Banks”","authors":"Feng Zhu","doi":"10.1111/aepr.12395","DOIUrl":"10.1111/aepr.12395","url":null,"abstract":"","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"272-273"},"PeriodicalIF":3.9,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87623200","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Japan Center for Economic Research","authors":"","doi":"10.1111/aepr.12398","DOIUrl":"https://doi.org/10.1111/aepr.12398","url":null,"abstract":"","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"315"},"PeriodicalIF":3.9,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12398","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"137790304","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
China has been both active and cautious in developing a central bank digital currency (CBDC). China CBDC has been in research and development since 2014. The process speeded up in 2019. It is currently at the stage of expanding real field experiments. Residents in 11 areas can open e-wallets linked to nine major banks. It is centralized digital cash designed to gradually replace traditional paper cash and coins (M0). It will be supported by the traditional double-layer banking system. It is not blockchain based at issuance but is technology neutral in distribution. Internet and technology companies may join commercial banks in distributing the China CBDC. In the short run, the China CBDC will help improve domestic financial monitoring and policy implementation. In the long run, it may play a role in the RMB's internationalization or even the international monetary system's evolution.
{"title":"Developments and Implications of Central Bank Digital Currency: The Case of China e-CNY","authors":"Jianguo Xu","doi":"10.1111/aepr.12396","DOIUrl":"10.1111/aepr.12396","url":null,"abstract":"<p>China has been both active and cautious in developing a central bank digital currency (CBDC). China CBDC has been in research and development since 2014. The process speeded up in 2019. It is currently at the stage of expanding real field experiments. Residents in 11 areas can open e-wallets linked to nine major banks. It is centralized digital cash designed to gradually replace traditional paper cash and coins (M0). It will be supported by the traditional double-layer banking system. It is not blockchain based at issuance but is technology neutral in distribution. Internet and technology companies may join commercial banks in distributing the China CBDC. In the short run, the China CBDC will help improve domestic financial monitoring and policy implementation. In the long run, it may play a role in the RMB's internationalization or even the international monetary system's evolution.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"235-250"},"PeriodicalIF":3.9,"publicationDate":"2022-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72617691","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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