Administrative Economies of Scale in the Malaysian States: A Panel Data Analysis

There is ongoing concern over administrative performanceamong the different Malaysian states. Using panel data econometric approach, this paper investigates administrative scale effects and the determinants of administrative intensity in the thirteen states and three federal territories in Malaysia over the period 2005 to 2020. Our results indicate that both production labor inputs and population jointly have a scale effect on administrative intensity. There is an inverted U-shaped scale impact from population size and a U-shaped scale effect from production labor input on administrative intensity in Malaysia. Several public policy recommendations are suggested for the improvement of Malaysian administrative performance.