Assessing development efficiency in Malaysian economy: input-output approach

This paper attempts to analyse and assess the changes in the efficiency level in the Malaysian economy, especially during the period 1980–2005, when the planners formulated and implemented nine plans so far. We used five input-output (I-O) tables published so far by the Department of Statistics, Malaysia for the period under study. The year 2005 is chosen as the closing year of study because this is the last year for which an I-O table is available. This comparative study focuses on changes in the economic structure with different levels of development over time through the changes in the A and (I − A)<SUP align="right"><SMALL>−1</SMALL></SUP> matrices over the study period. New evidence is found in this study: first, the efficiency degree between demand and supply side for the Malaysian economy still remains weak and changeable over the study period. Also, the results indicate a rather remarkable degree of commonality in the patterns of growth processes, with more significant differences between sectors than between tables. However, most changes within sectors, and the Malaysian table as a whole, seem to result from changes in the level of the efficiency.