Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers

As of late, several state governments in Malaysia have been identified as having serious difficulty in meeting their financial needs, to the extent of the government being qualified as on the verge of bankruptcy. One of the explanations put forward is that state governments have been acting irrespon...

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Main Authors: Abdul Jalil, Ahmad Zafarullah, Abdul Karim, Noor Al-Huda
Format: Article
Language:English
Published: Chulongkorn University, Thailand 2009
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Online Access:http://repo.uum.edu.my/7401/1/MPRA_paper_25188.pdf
http://repo.uum.edu.my/7401/
http://mpra.ub.uni-muenchen.de/25188/
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spelling my.uum.repo.74012013-05-22T10:12:58Z http://repo.uum.edu.my/7401/ Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers Abdul Jalil, Ahmad Zafarullah Abdul Karim, Noor Al-Huda HJ Public Finance As of late, several state governments in Malaysia have been identified as having serious difficulty in meeting their financial needs, to the extent of the government being qualified as on the verge of bankruptcy. One of the explanations put forward is that state governments have been acting irresponsibly in managing finances.Thus, the question that ensues is: why do state governments behave in such irresponsible manner fiscally and financially in the first place? In this paper, we relate the financial difficulties faced by these governments within the confines of the institutional and political environment currently in place within the country.We will examine one of the institutional features of the intergovernmental system in Malaysia – the intergovernmental grants systems.More precisely, there are two hypotheses that will be tested in this research.. First, federal transfers may stimulate more spending by state governments which leads them to increase spending beyond the means available to them. Second, financial problems may be the consequence of a state governments’ incapacity to utilize tax capacities to the fullest, which in turn may be explained by the disincentives effects that are embedded (whether intended or not) within the transfer system. Chulongkorn University, Thailand 2009 Article NonPeerReviewed application/pdf en http://repo.uum.edu.my/7401/1/MPRA_paper_25188.pdf Abdul Jalil, Ahmad Zafarullah and Abdul Karim, Noor Al-Huda (2009) Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers. Chulalongkorn Journal of Economics , 20 (2). pp. 113-141. ISSN 0857-8397 (Unpublished) http://mpra.ub.uni-muenchen.de/25188/
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HJ Public Finance
spellingShingle HJ Public Finance
Abdul Jalil, Ahmad Zafarullah
Abdul Karim, Noor Al-Huda
Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers
description As of late, several state governments in Malaysia have been identified as having serious difficulty in meeting their financial needs, to the extent of the government being qualified as on the verge of bankruptcy. One of the explanations put forward is that state governments have been acting irresponsibly in managing finances.Thus, the question that ensues is: why do state governments behave in such irresponsible manner fiscally and financially in the first place? In this paper, we relate the financial difficulties faced by these governments within the confines of the institutional and political environment currently in place within the country.We will examine one of the institutional features of the intergovernmental system in Malaysia – the intergovernmental grants systems.More precisely, there are two hypotheses that will be tested in this research.. First, federal transfers may stimulate more spending by state governments which leads them to increase spending beyond the means available to them. Second, financial problems may be the consequence of a state governments’ incapacity to utilize tax capacities to the fullest, which in turn may be explained by the disincentives effects that are embedded (whether intended or not) within the transfer system.
format Article
author Abdul Jalil, Ahmad Zafarullah
Abdul Karim, Noor Al-Huda
author_facet Abdul Jalil, Ahmad Zafarullah
Abdul Karim, Noor Al-Huda
author_sort Abdul Jalil, Ahmad Zafarullah
title Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers
title_short Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers
title_full Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers
title_fullStr Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers
title_full_unstemmed Understanding Malaysian state governments fiscal behavior: The role of intergovernmental transfers
title_sort understanding malaysian state governments fiscal behavior: the role of intergovernmental transfers
publisher Chulongkorn University, Thailand
publishDate 2009
url http://repo.uum.edu.my/7401/1/MPRA_paper_25188.pdf
http://repo.uum.edu.my/7401/
http://mpra.ub.uni-muenchen.de/25188/
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score 12.925488