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      The political economy of health financing reform in Malaysia

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          There is growing evidence that political economy factors are central to whether or not proposed health financing reforms are adopted, but there is little consensus about which political and institutional factors determine the fate of reform proposals. One set of scholars see the relative strength of interest groups in favour of and opposed to reform as the determining factor. An alternative literature identifies aspects of a country’s political institutions–specifically the number and strength of formal ‘veto gates’ in the political decision-making process—as a key predictor of reform’s prospects. A third group of scholars highlight path dependence and ‘policy feedback’ effects, stressing that the sequence in which health policies are implemented determines the set of feasible reform paths, since successive policy regimes bring into existence patterns of public opinion and interest group mobilization which can lock in the status quo. We examine these theories in the context of Malaysia, a successful health system which has experienced several instances of proposed, but ultimately blocked, health financing reforms. We argue that policy feedback effects on public opinion were the most important factor inhibiting changes to Malaysia’s health financing system. Interest group opposition was a closely related factor; this opposition was particularly powerful because political leaders perceived that it had strong public support. Institutional veto gates, by contrast, played a minimal role in preventing health financing reform in Malaysia. Malaysia’s dramatic early success at achieving near-universal access to public sector healthcare at low cost created public opinion resistant to any change which could threaten the status quo. We conclude by analysing the implications of these dynamics for future attempts at health financing reform in Malaysia.

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          Most cited references 19

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          When Effect Becomes Cause: Policy Feedback and Political Change

           Paul Pierson (1993)
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            The New Politics of the Welfare State

             Paul Pierson (1996)
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              Stakeholder analysis: a review.

               R. Brugha (2000)
              The growing popularity of stakeholder analysis reflects an increasing recognition of how the characteristics of stakeholders--individuals, groups and organizations--influence decision-making processes. This paper reviews the origins and uses of stakeholder analysis, as described in the policy, health care management and development literature. Its roots are in the political and policy sciences, and in management theory where it has evolved into a systematic tool with clearly defined steps and applications for scanning the current and future organizational environment. Stakeholder analysis can be used to generate knowledge about the relevant actors so as to understand their behaviour, intentions, interrelations, agendas, interests, and the influence or resources they have brought--or could bring--to bear on decision-making processes. This information can then be used to develop strategies for managing these stakeholders, to facilitate the implementation of specific decisions or organizational objectives, or to understand the policy context and assess the feasibility of future policy directions. Policy development is a complex process which frequently takes place in an unstable and rapidly changing context, subject to unpredictable internal and external factors. As a cross-sectional view of an evolving picture, the utility of stakeholder analysis for predicting and managing the future is time-limited and it should be complemented by other policy analysis approaches.

                Author and article information

                Health Policy Plan
                Health Policy Plan
                Health Policy and Planning
                Oxford University Press
                December 2019
                28 September 2019
                28 September 2019
                : 34
                : 10
                : 732-739
                [1 ] Department of Global Health and Population , Harvard T.H. Chan School of Public Health, 677 Huntington Ave, Boston, MA 02115, USA
                [2 ] Planning Division, Ministry of Health, Block E6, Parcel E, Federal Government Administration Centre , 62590, Putrajaya Malaysia
                [3 ] Institute for Health System Research, Ministry of Health , Blok B2, Kompleks Institut Kesihatan Negara (NIH) No.1, Jalan Setia Murni U13/52, Seksyen U13 Setia Alam, Shah Alam, Selangor 40170, Malaysia
                [4 ] Razak School of Government, Menara Prisma , Level 5, 26, Persiaran Perdana, Presint 3, Putrajaya 62675, Malaysia
                [5 ] Institute for Health Management, Ministry of Health Malaysia , Blok B1, Kompleks NIH, Jalan Setia Murni U13/52, Seksyen U13, Setia Alam 40170 Shah Alam, Malaysia
                Author notes
                Corresponding author. Department of Global Health and Population, Harvard T.H. Chan School of Public Health, 677 Huntington Ave, Boston, MA 02115, USA. E-mail kcroke@
                © The Author(s) 2019. Published by Oxford University Press in association with The London School of Hygiene and Tropical Medicine.

                This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (, which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited. For commercial re-use, please contact

                Page count
                Pages: 8
                Original Articles


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