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| INSTITUTIONAL ARRANGEMENT AND REGIONAL ECONOMIC PERFORMANCE: A COMPARISON WITH THE INSTITUTIONAL REASONS ON THE DIFFERENT ECONOMIC PERFORMANCE OF MALAYSIA AND INDONESIA AFTER THEIR INDEPENDENCE |
| YANG Ying, CHEN He |
| Economics College of Jinan University, Guangzhou 510632, China |
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Abstract Malaysia and Indonesia have similar geographical location, natural climate and resources, structure of nations, religions and so on. But their economic performances are quite different after the Second World War. When the traditional Neo-classical economics develop theory tries to explain the case, they find that the outcome is not satisfied. The main point of the New-classical economics is that it considers the institution as exogenous variable. So they can't give out the explanation of the economic phenomenon that is caused by the in stitutional factors. Professor North found the problem, and he viewed that institution is the spring of one country's economic development. He introduced new-intuitional economics theory tools into the analysis of the new economic history. And he constructed a theory named Institutional Transition Theory. The theory consists of property right theory, state theory and ideology theory. North used the theory to analyze the difference of the economic performance among different regions and states. Our main analytical tool is based on the North's Institutional Transition Theory, and we also will use some other new-institutional related theories. With these theoretical tools, we will explain that, why some phenomenon is hard to understand in Neo-classical economics, but it is easy to understand in our analytical frame. After the analysis of the confused phenomenon, we will see which factors caused the difference of the two states.
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Received: 07 August 2005
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2006, Vol. 21 
