Essays on economic *growth in Malaysia in the twentieth century

This dissertation differs from previous studies on Malaysian economic development in presenting a quantitative analysis of economic growth that spans over a hundred years. The study of long-run economic growth in Malaysia was not possible until now because of the complete absence of national income accounts before World War II. The first paper of the dissertation fills this gap in the literature by presenting the GDP estimates of Malaya for each year from 1895 to 1939. To my knowledge, these are the first such estimates to be prepared for this period. The second paper employs a growth accounting analysis to examine the sources of growth of the Malaysian economy in the twentieth century. It is shown that growth was driven largely by increases in capital and labor inputs. Changes in the rate of growth of exports and investment explain much of the variation in total factor productivity growth. Private, mainly foreign, investment has been the primary source of capital accumulation, with the state playing an important supportive role. The contribution of labor input to overall growth has remained stable at between 1.9 to 2.1 per cent for most of the century. The third paper examines various aspects of economic instability---its extent, causes and consequences on economic growth. Instability was found to have been much greater in the pre-war period. The empirical evidence strongly suggests that export instability reduces growth, and that the impact was more important in the earlier years.