Among all the factors that influence the rapidity and substance of economic growth, it is now clear that state institutional capacities (and related bureaucratic competence) for economic governance are among the more decisive (Evans and Rauch 1999, Rauch and Evans 2000). Among the countries that have sustained an impressive record of economic growth in recent decades, Malaysia occupies an unusual - and perhaps unique - position. It does so for three related reasons. Firstly, it is the only one of the dynamic economies of East Asia that is substantially multi-ethnic in social composition 1; secondly, it is the first 'Muslim-majority' state from the developing world to have industrialised 2; and thirdly it is one of the few - perhaps the only - capitalist society to have integrated commitments to poverty elimination and redistribution as central moments in its growth strategy. As a result of this combination, Malaysia warrants close investigation, both in its own right and in terms of what its experiences might have to 'say' about the relation of economic governance to poverty and its reduction in equivalent societies.

By Jeffrey Henderson, David Hulme, Richard Phillips and Noorul Ainur M Nur. Published in May 2002. The research on which this paper draws was funded by the Department for International Development (DFID) via its Globalisation and Poverty Programme (Grant R7861).