ARE FINANCIAL SECTOR POLICIES EFFECTIVE IN DEEPENING THE MALAYSIAN FINANCIAL SYSTEM?

This paper provides an empirical assessment of the effects of financial sector policies on development of the financial system in Malaysia over the period 1959–2005. The technique of principal component analysis is used to construct a summary measure of interest rate policies in order to account for the joint influence of various interest rate controls imposed on the Malaysian financial system. The results show that economic development, interest rate controls, and capital liquidity requirements positively affect the level of financial development. However, greater trade openness, higher statutory reserve requirements, and the presence of directed credit programs appear to be harmful for development of the Malaysian financial system. The results provide some support to the argument that some form of financial restraints may help promote financial development. (JEL E44, E58, O16, O53)     

ACCOUNTING FOR THE PUBLIC SECTOR IN DEVELOPMENT PLANNING

This paper seeks to set out in some detail an accounting structure for the public sector of developing countries which will provide the information essential for development planning. The public sector is of course of special importance in planning because of its sheer size and its pivotal position for altering the contours of the entire economy. Yet the information available for this strategic area often falls far short of what is needed, and also of what could be provided with more effort.
The paper is divided into a number of sections, the first two of which are concerned with demarcating the public sector and with the nature of the accounting framework proposed. These are followed by sections dealing with the distinction between development and other expenditures; the need for separate financial information; public enterprises; the grouping of expenditures according to the purposes served; and income distribution. A final section touches briefly on some of the data problems involved in implementing the system. In addition, a full set of accounts for the public sector and its components is appended.     

ASSESSING THE PERFORMANCE OF THE PUBLIC SECTOR

ABSTRACT ** :  One is used to hearing harsh statements about inefficient public services. It is not surprising to see public sector performance questioned. What is surprising is that what is meant by performance, and how it is measured, does not seem to matter much to either the critics or the advocates of the public sector.
The purpose of this paper is to suggest a definition, and a way to measure the performance of the public sector or rather of its main components. Our approach is explicitly rooted in the principles of welfare and production economics. We will proceed in four stages. First of all we present what we call the 'performance approach' to the public sector. This concept rests on the principal-agent relation that links a principal, i.e., the State, and an agent, i.e., the person in charge of the public sector unit, and on the definition of performance as the extent to which the agent fulfils the objectives assigned by the principal. The performance is then measured by using the notion of productive efficiency and the 'best practice' frontier technique.
In the second stage we move to the issue of measuring the performance of some canonical components of the public sector (education, health care and railways transport), assuming that there is no constraint as to data availability. The idea is to disentangle the usual confusion between conceptual and data problems. In the third stage, we move to real world data problems. The question is then given the available data, whether it makes sense to assess and measure the performance of such public sector activities. The final stage is devoted to explaining performance or rather lack thereof. This exercise has clear implications for public policy.
Finally we argue that when the scope is not components but the entirety of the public sector, one should restrict the performance analysis to outcomes and not relate them to inputs.     

MEASUREMENT OF THE ROLE O F THE PUBLIC SECTOR IN THE FINNISH ECONOMY

Following the growth of the public sector traditional measures of the size of the public sector have appeared to be inadequate for policy purposes. In the article the role of the public sector in the Finnish economy is described first by using some traditional methods and indicators. The historical background of the development is briefly discussed. After that some specific problems of the measurement are discussed. These problems include measurement of output and productivity, definition of appropriate balance of the public sector, different measures to describe the size and scope of the public sector, role of tax reliefs and subsidies, different organizational arrangements, public sector regulation etc.
The growth of the public sector takes many different forms and it appears to be more difficult than formerly to obtain a comprehensive picture of the scope of the public sector. For different purposes different indicators have to be used. At the end of the paper the implications of the changing emphasis in the public policy are discussed.