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Project: Sub-national Economies

Sub-national Economic Dynamics in Southeast Asia

Conventional approaches to economic, politics, and international relations focus on nation-states. However, over the past two decades, this ‘nation-centred’ approach has been called into question by the advent of globalization. The increasing importance of multilateral organizations, global networks of firms, and the untrammelled flow of information has led some to declare that the nation-state is in decline. While this is debatable, there is a general awareness that nation-states are facing challenges to their authority from above as well as across their borders.

However, what is less discussed is how the traditional role of nation-states is being challenged from below. Many of the same globalizing forces that are challenging the primacy of nation-states imply a potentially greater role for their sub-national counterparts. Greater flows of information result in citizenries that demand a more direct say in the affairs of government. For many, national-level government is too remote a reality, as it is at the state or provincial level that issues of relevance such as transport, local services, and often health and education are decided.

In part, this is due to policies enacted by national governments themselves. Over the last two decades, the ‘Silent Revolution’ of decentralization has swept the globe, as many nation-states have devolved responsibilities to lower levels of government. In some cases, this has been through the introduction of decentralization measures, as in the case of the Philippines in 1991 and Indonesia in 1999. In others, it has been through a generalized ‘rolling back’ of national-level regulatory frameworks that has, in turn, allowed sub-national governments to move in.

Furthermore, economic globalization seems to be heightening the relationship between location and economic activity. This is seen in the emergence of high-performing sub-national economies in industrialised as well as industrializing countries. These trends have implications for meso- and micro-level governments. Because these government institutions are, in theory, closer to their constituents, they may be better placed to deliver particular types of services than higher levels of government, and thus play a more active role in forging their territories’ economic fortunes.

The localized dimension of economic activity and greater local political participation means that state and provincial governments are increasingly expected to be stewards of their economies and deliver sustained growth rates for their citizens.  Now, spurred on by increasing competition, not least from neighbouring territories, sub-national governments are increasingly formulating their own plans for economic development, taking out loans, investing in specialist facilities, and establishing marketing offices abroad. Despite this increasingly challenging environment, there is little research on what sub-national governments can or should do to catalyse the development of their economies.

This project aims to: analyse key economic and political economy issues at the sub-national level in Malaysia, Indonesia, and the wider Southeast Asian region.


Current Projects:

‘Mapping’ the Electronics Sector in Johor, Penang, Singapore, and Batam

Image: "De Maria and Schenk, Architecture of Territory, ETHZ"

Carried out in conjunction with the Economic Geography Section of the Urban and Regional Research Centre, Utrecht, this project aims to understand how the electronics sector has developed over the past two decades in and across these locations in Malaysia, Singapore, and Indonesia.

‘Sovereignty and Vulnerability: Sub-national States and Industrialization in Malaysia’

This book-length manuscript looks at the influence of institutions on economic outcomes at the sub-national level in Malaysia, with specific reference to the states of Penang and Johor.

Federalism in Malaysia

This project, organized in conjunction with the Penang Institute in Malaysia, brings together a wide range of scholars to critically study the practice of federalism and explore adjustments or reforms which may improve democracy and governance.

Decentralization and the ‘Missing Middle’ in Southeast Asia

As part of a larger project on changing state structures in Southeast Asia, this research seeks to establish the commonalities in how governments in the region have implemented decentralization reforms.


Past Projects:

Architects of Growth? Subnational Governments and Industrialization in Asia.
ISEAS Publishing, 2014

Focusing on the electronics sector, this book draws together ten cases of promising states or provinces largely, but not exclusively, from Asia. These dynamic regions have managed to outcompete the primary economic and political centres of power in their countries and are negotiating their own entry into one of the most challenging and demanding sectors. In exploring the issues of agency, autonomy, and state-business relations at the sub-national level, this book aims to shed light on a vital, but overlooked topic.


Recent Research Products:

  • “Malaysia’s Federalism: Overt and Covert Centralization”, Journal of Contemporary Asia, 2014


Upcoming Research Products:

“(De)Centralization and the Missing Middle in Indonesia and Malaysia”. under review.
“Centre-State Relations and Intra-Party Dynamics in Malaysia: UMNO and the Case of Johor”. Asian Journal of Political Science, 2015.

For more information on this research project, please contact Francis Hutchinson, RES : fhutchinson@iseas.edu.sg