ABSTRACT
There is a good deal of agreement that the microeconomic foundations of economies count towards ensuring that macroeconomic objectives such as full employment and growth are achieved. Stated differently, this means that macroeconomic goals can only be achieved if there are robust institutions to ensure that the microeconomic policies are designed, executed and monitored in a manner that is in accordance with the principles of transparency and good governance. While institutional strategies do not usually take a place of prominence in debates on national economic growth, it seems that this is a mistaken view, since the foundations of economic growth are based on sound institutional processes that can guide microeconomic policy. The micro foundations of macroeconomic growth are well recognized, and
even at the policy level in Malaysia there is ample evidence that the political leadership accepts the need for microeconomic reform. The privatization initiative that was undertaken in the late 1980s is a milestone in microeconomic reform in Malaysia; and while it points to the recognition of the need for microreform, it also demonstrates the necessity for institutional structures that can support the microeconomic reform process. This chapter first establishes the need for institutional strategies that can
accommodate effective and efficient institutional processes. It instantiates the need for institutional reform in Malaysia by citing areas where institutional strategies were not established or inadequately established. It then examines the sources of resistance to improving institutional structures in Malaysia. Finally it examines how APEC as an organization can assist in Malaysia’s reform process.
