administrative modernization in the malaysian local government: a

Pertanika J. Soc. Sci. & Hum. 14(1): 51-62 (2006) ISSN: 0128-7702© Universiti Putra Malaysia Press

Administrative Modernization in the Malaysian Local Government:A Study in Promoting Efficiency, Effectiveness and Productivity

AHMAD ATORY HUSSAIN & MALIKE BRAHIMDepartment of Public Management

Faculty of Public Management and LawUniversiti Utara Malaysia

06010 Sintok, Kedah, Malaysia

Keywords: Administrative, modernization, reforms, local government

ABSTRAK

Dalam tempoh pemerintahannya dari tahun 1981-2003, Dr. Mahathir Mohamad telahmelaksanakan usaha pemodenan atau pembaharuan pentadbiran awam di Malaysia melaluipelbagai dasar dan program yang telah diperkenalkan - dilihat sebagai tempoh pemodenan danpembangunan yang pesat. Usaha pemodenan pentadbiran di Malaysia tidak hanya melibatkanagensi-agensi kerajaan di peringkat persekutuan, tetapi turut membabitkan kerajaan tempatan.Penyelidik telah menganalisis program-program dan dasar-dasar pembaharuan yang telahdiperkenalkan melalui kajian tinjauan dari tahun 2002-2003 dalam kalangan pegawai-pegawaikanan yang sedang berkhidmat di unit-unit kerajaan tempatan di lapan buah negeri sepertiPerlis, Pulau Pinang, Kedah, Kelantan, Sabah, Sarawak, Pahang dan Terengganu. Pernilihannegeri-negeri ini dengan andaian mereka masih ketinggalan dan belurn mencapai matlamatpembaharuan pentadbiran terutamanya di peringkat kerajaan tempatan masing-masing. Hasilkajian mendapati tidak semua usaha pembaharuan yang telah dilaksanakan oleh pihak kerajaandi peringkat kerajaan tempatan di negeri-negeri tersebut berkesan dan berjaya. Oleh itu, unit-unit kerajaan tempatan perlu bersedia melaksanakan pembaharuan dan menerima perubahandalam usaha memodenkan sistem pentadbiran masing-masing agar dapat bersaing dengankerajaan tempatan di negara-negara maju dan juga di negara-negara sedang membangun yanglain.

ABSTRACT

Closely examining the Malaysian administrative modernization or reform initiated by Dr.Mahathir Mohamad, the Prime Minister of Malaysia from 1981 to 2003 - a decade ofmodernization and faster economic growth - the reseacher analyses various programmes andreform policies introduced in the public administration system in Malaysia. Modernizationefforts that were carried out not only involved the federal government levels but also includedthe local government level. This article identifies the administrative reform efforts that wereintroduced at the local government level. Research were carried out from 2002 to 2003, togauge the opinion of the senior officers who are currently serving in various units in the localgovernments in eight states, namely Perlis, Penang, Kedah, Kelantan, Sabah, Sarawak, Pahangand Terengganu. The eight states were chosen based on the assumptions that they are still somereform efforts implemented that have not met the targets. The result of the research shows thatnot all reform efforts introduced and adopted in those states are effective and successful. Thismeans that the local government must be ready to carry out reforms and changes to modernisetheir administrative system to be able to compete with other local government in other advancedand developing countries.

Ahmad Atory Hussain & Malike Brahim

INTRODUCTIONThe Malaysian government system is dividedinto three levels — namely federal, state andlocal governments (Ahmad Atory 2002; Malaysia1999; Phang Siew Nooi 1996; Zahari 1991).Consequently, the state government has theright to determine types of programmes andpolicies that are suitable for their localgovernments. Morever, the local government'sstatus and position is provided in the MalaysianConstitution, whereby the Constitution statesthat the local government is under the powerand control of the respective state governments.This is a special provision stipulated in theMalaysian Constitution to administer, formulatepolicies, develop and control for the localgovernment, which is known as The NationalCouncil for Local Government (NCLG).1 Thelocal governments derive their power andautonomy through the process ofdecentralization from the state government.2

Though they have little power and autonomy,they play an important role in providing basicfacilities and services, as well as maintaininginfrastructures. The local government, to thatextent could to find their own revenue such asgetting involved in the privatization projectsand so forth.

Since Dr. Mahathir Mohamad became thePrime Minister in 1981, a substantial numberof administrative reforms in the publicadministration system had been introduced.The administrative reforms that were introducedare still carried out until now. The reformswere introduced mainly to improve and upgradeeffectiveness, image and the quality of theadministration of government including localgovernments. It also helped to change theattitude of the civil servants, which is the mostencouraging success of the reform. Malaysiacan now claim to have an administrative system,which is comparable to that of other advancedand developing countries (Ahmad Atory 1998).There are some developing countries that haveemulated the Malaysian administrative model.

However, at the local government level, effortstowards reform in the administrative system aregiven less attention. Realising the situation,research about the administrative reform in thelocal government administration in Malaysia wascarried out to get the opinions as well asevaluation from the senior officers of theeffectiveness of the reforms that were introducedso far. The study focused on the perceptions ofeffectiveness of various reform initiatives.

At the local government level in Malaysia,there are still lack of information aboutadministrative reform carried out by thegovernment. In conjunction to that, thediscussion in this article consists of finding ofresearch undertaken in 2002 (and completed inthe year 2003), by compiling opinions andevaluation of public officers of the localgovernment regarding the reform that has beenimplemented to upgrade the efficiency,effectiveness and productivity.

Efforts to achieve and upgrade efficiency,effectiveness and productivity in the publicservice and administration are the main objectiveof the Mahathir administration. To achieve thisobjective, various efforts and reform strategiesthat involve work procedures and civil servants'attitude have been carried out, including at thelocal government level. The government hadintroduced Malaysia-Incorporated Policy; Clean,Efficient and Trustworthy; Leadership ByExample; Look East Policy; Privatisation Policyand many more in efforts to change the attitudeof the civil servants so that they will be morepositive, innovative, disciplined, responsible, andefficient. Apart from that, the reform aims toimprove and upgrade the capability anddeveloping system in the public administrationin Malaysia.

These programmes and policies havebrought a lot of changes and success inupgrading efficiency, effectiveness andproductivity of the public administration inMalaysia. Ahmad Atory in his book entitled"Administrative Reform in Malaysia (1998) haslisted down a number of reform efforts that

Under Item 4 in List 2 of the Ninth Schedule, the Malaysian Federal Constitution stipulates local government toa subject under the State List. Hence, all local authorities fall under the exclusive jurisdiction of the stategovernments (Malaysia 1991; Phang Siew Nooi 1996).Following an amendment to the Malaysian Federal Constitution, the government enacted, under Article 95A, theNational Council for Local Government (NCLG) to advise and coordinate the local authorities in matters especiallypertaining to legal and major policy issues (Malaysia 1999; Report of the Royal Commission of Enquiry toInvestigate in the Working of Local Authorities in West Malaysia 1970). Also see Ahmad Atory (2002).

52 PertanikaJ. Soc. Sci. & Hum. Vol. 14 No. 1 2006

Administrative Modernization in the Malaysian Local Government

have brought positive changes in efficiency,effectiveness and productivity of the Malaysianpublic sector particularly during the Mahathir'sadministration. His findings noted that epitomeof examples can be seen in the. reform effortslike privatisation, trimming size of the civilservice, attitudinal changes of the civil servantsthough several procedural reforms like punchcard system, name tag identification among thecivil servants, manual procedures, client-chartered, open space lay-out. In addition, somepositive changes have also been identifiedthrough various programs to upgrade theleadership quality among civil servants. Someof these programs are as follows: (i) trainingopportunities for levels of civil servants; (ii)better promiotion prospects and fringe benefitssuch as opportunities for postgraduate studiesand sabbatical leaves; (hi) job specialization;and (vi) job rotation to give civil servants widerexposure to various operations of theirrespective departments. But, how is it at thelocal government level? Therefore, researchobjectives of this study are:(a) To evaluate the extent to which reform

efforts at the local government level wereachieved through responses of the seniorofficers regarding work procedures andattitude of their colleagues; and

(b) To study the success in privatisation as oneof the reforms adopted in the localgovernment administration.

Based on the objectives above, theeffectiveness of the reform programmes andpolicies that were introduced by Dr. MahathirMohamad administration, including the reformin the local government system were evaluatedby selected respondents undertaken by theauthors. The evaluation made by the officersconcerned especially those serving in the variousunits in the local government is very importantto be known on how effective is the reformmade in the local government system. Therespondents can give their important evaluationbecause they are involved directly with theimplementation of the reform efforts.

THE CONCEPT OF ADMINISTRATIVEREFORM (MODERNIZATION)

The concept of administrative reform meansdifferent things to different people. Caiden(1969) uses it to refer "... to all improvements

in administration; ... to general administrativeoverhauls in difficult circumstances; ... to specificremedies for maladministration; ... to anysuggestion for better government; ... and tointention of self-styled administrativereformers...". According to Hanh (1970),administrative reform is defined as "a systematicand integrated effort to bring about fundamentalchanges in public administration to enhancepublic administrative capability to achievenational development goals." This definition isdesigned to accommodate: (i) organizationalimprovements (both structural and procedural);and (ii) improvements in the behaviour of civilservants.

The main objectives of structural reformsinclude the reduction of overlapping andduplicating functions, redefinition ofresponsibilities, reduction of span of controland redesigning of organizastion and institutions(Caiden 1969: 35). While the lowest level ofstructural reforms includes improvement inprodedures or changing the routines of publicadministration. Incompetency of administrativeprocedures in coping with increasing demandfor implementaion of development projects isusually the reason for procedural reforms. Therange of procedural reforms may vary. Reformmay take the form of improvement in proceduresconcerned with organisation, planning, finance,budgeting, accounting, auditing, methods andsupply management and elimination exchangecontrol. Reforms can also take the form ofsimplification of export procedures and otheraspects such as ICT, ISO, TQM, E-Government,etc.

Basically, behavioral reforms make use ofthe propositions drawn from the field ofpsychology and sociology. Herbert Kaufman usesthe phrase administrative behavior to designatehuman behavior in organizational setting,particularly behavior of others. This literaturewhich deals mostly with motivation is also oftenconcerned with application and advising, forexample, how to secure greater workproductivitry or acceptance of change or "changein value" {International Encyclopedia of SocialSciences'. '72). Behavioral reform can besubdivided into two dimensions (i) personnelimprovement; and (ii) improvement ofpersonnel behavior ot attitudes. The former isconcerned more with the material well-being ofthe personnel in the civil service, both extrinsic

Pertanika J. Soc. Sci. & Hum. Vol. 14 No. 1 2006


and intrinsic benefits, while the latter isconcerned with improvement of the behaviorof civil servants in terms of the alteration ofbelief, values, attitudes and individual actions. Itis hope that by changing the attitude andbehavior of civil servants, efficiency, effectivenessand productivity will follow.

The local government system in Malaysiahas experienced changes in its administrativesystem and structure to a greater scale sinceindependence. The effect thus brought to therestructuring of local government in Malaysiadid not have any special system, structure,categories and standardised and systematicregulation aspects. So, during that time, thegovernment saw that the situation causedproblems in the management and administrationof various units in the local government. Toidentify problems, the government formed aRoyal Commission for restructuring andinvestigating the local government system ofwhich Athi Nahappan was made as the Chairmanof the Royal Commission. It started theinvestigation on local governments in PeninsularMalaysia on 1 July 1965 even though YangDiPertuan Agong (The King of Malaysia) hadapproved the formation of the RoyalCommission in July 1963 (Ahmad Atory, 2002;Norris 1980; Phang Siew Nooi 1996; Zahari1991).

After the investigation was undertaken, areport was sent to Yang DiPertuan Agong on 30January 1969. The report forwarded suggestionsthat brought to the efforts in restructuring thelocal government in Malaysia under The LocalGovernment Act 1973 (Temporary Provision).The act had a lots of effects on the localgovernment system in Malaysia until it was thenchanged to The Local Government Act 1976(Act 171). Under The Local Government Act1976, the restructuring process of localgovernment in Malaysia (only in the PeninsularMalaysia) was carried out with four mainobjectives as outlined below:a) Reducing the types of local authority by

establishing only three types or entities thatis the city council (majlis bandaraya),municipality council (majlis perbandaran)and and district council (majlis daerah);

b) Integrating laws involving the formation,function and main power of local authorityfor the three categories of local authority as

to avoid duplication with the localgovernment laws in West Malaysia;

c) Reducting the numbers of local authoritythrough the combination or merger of theexisting local authority; and

d) Introducing uniformity of the power andlaws of construction works and regionalplanning through the Building, Drain andRoad Act 1974 (Act 133), The Urban andRural Planning Act 1976 (Act 172) andother minor acts.

METHODOLOGY AND SAMPLINGThe research that was undertaken using surveymethod has with 600 questionnaires that wererandomly mailed to senior officers (betweenthree and five respondents per local authoritye.g district officer, assistant district officers,president or chairman of the district council ,including those in the various units ofadministration e.g finance, engineering or

TABLE 1Distribution of respondents by state

N-187

State Number of Respondents Percentage (%)

PerlisPenangKedah

KelantanSabah

SarawakPahang

TerengganuTotal

34

26213i621624187

1.62.113.911.216.633.28.212.8100

Source. Survey Data (2002)

planning units. The questionnaires were onlysent to the local governments of the eightstates of Perlis, Penang, Kedah, Kelantan, Sabah,Sarawak, Pahang and Terengganu (as shown inTable 1). The local governments for otherthan these states are not covered in the study.About 600 questionnaires mailed, only 210(35%) were returned. Of the total (210) only187 (89.04%) were completed for the analysis.

The questionnaire has three parts; the firstpart is about respondent's demography such as,age, race, designation, sex, state, service unit

Pertanika J. Soc. Sci. & Hum. Vol. 14 No. 1 2006


and service duration. The second part includesquestions about efforts made to improve workingprocedures and system, upgrading public service,improving staff's attitude, upgrading work ethicsand the use of the computers. While the thirdpart includes questions about the achievementof the privatisation policy or decentarizationpolicy that was implemented at the localgovernment level and the form of privatisationthat were carried out.

DISCUSSION

Improving Procedures and Work SystemWhile efforts were made to improve the workingsystem and procedures in the civil service, thegovernment as shown in Table 2, thenintroduced about twelve work procedures forwhich can be categorized into the proceduresand works systems. The effectiveness inimproving work system and procedures in thecivil service are based on the evaluation ofofficers who are presently serving in the localgovernment in the eight states as shown earlierin Table 1.

The introduction of punch card system isaimed at to improving the work attendance,apart from upgrading the efficiency andeffectiveness in the civil servant. The governmentstaff are required to punch in before 8.00 amand punch out after 4.15 pm. While the use ofname tags is mainly for easy recognition of

those officers who deal with the public. TheQuality Control Circle concept was introducedto encourage the officers to analyse the problemsand suggest solutions to overcome the problemand forward them to the management units.This system involves all staff in solving problemsby collectively seeking solutions.

The government too had introduced theconcept of open space office to create conduciveand suitable working atmosphere. The aim isto ensure the formality is reduced andcommunication in the office is smooth andeffective. On the other hand, theimplementation of the file system inmanagement aim to speed up the service processof the government agencies as what is happeningin the local government level. At the same time,the government had directed all governmentagencies including the local government toprovide manual work procedures as a tool toupgrade effectiveness in the civil service.

In effort to improve the work system andprocedure, the government improved the postalcorrespondence. It is to ensure letters areprocessed efficiently and fast. Before the reformof the administration was implemented, thegovernment did not follow any suitable andexact system to call for meeting, including thewriting of report about the minutes of themeeting as well as the actions taken to overcomeany problems or anything in connection. Thus,the government provided guidelines on meeting

TABLE 2Effectiveness of work systems and procedures

N=187

Work System and Procedures Percent Positive Evaluation Neutral (Unable Percent Negative Evaluation(Effective) to Evaluate) (Ineffective)

Punch cardName tagQuality circle controlOpen-space office layoutWork procedure manualDesk file systemPostal correspondenceManagement through meetingProductivity measurementprogrammeTQM conceptISO 9000 conceptConcept of electronic government

55.672.251.358.865.858.373.882.939.0

43.962.641.2

21.90.514.417.65.95.98.04.330.5

21.414.430.5

22.527.334.223.528.335.818.212.830.5

34.823.028.3

Source: Survey Data (2002)

Pertanika J. Soc. Sci. & Hum. Vol. 14 No. 1 2006 55


management. To strengthen the work systemsand procedures, productivity measures were alsoimplemented to upgrade the product as well asthe service quality.

Based on the officers' evaluation, efforts toupgrade the work systems and procedures(which consist of the twelve procedures as shownin Table 2) were been indentitled. But it didnot achieve the expected result, or in otherwords, the effectiveness is still low. Only theuse of the name tag (72.2%), postalcorrespondence (73.8%) and managementthrough meeting had achieved high level ofeffectiveness in upgrading work system andprocedures in the local government. Othersprocedures such as the quality control circle(51.3%), the use of punch cards (55.6%), deskfile system (58.3%), open space office layout(58.8%), ISO 9000 standard (62.6%) and workprocedure manual (65.8%) that wereimplemented to upgrade efficiency andeffectiveness, only achieved moderate results(as evaluated from the respondents). On theother hand, other procedures that wereimplemented such as the ProductivityMeasurement Programmes (39%), concept ofthe electronic government (41.2%), TQMconcept (43.9%) had not achieved expectedresults.

Based on the evaluation, it can be said thatthe twelve work procedures were not positivelyevaluated by the respondents. More effortshould be done to upgrade and instilresponsiveness among the government staff soas to be more efficient and effective in theadministration and management of the localgovernment.

Improving Services to the PublicThe government has stressed on efforts toimprove service quality for the public, as one ofthe reforms undertaken in the local governmentsystem. In 1982, one new concept wasintroduced, that is the One-stop Service Centre.It was introduced to make it easy for the publicto pay bills and taxes as many bills can be paidat one counter. Thus the governmentintroduced One-stop Payment Centre; One-stopService Centre; One-stop Licence Centre;Suggestion Box; and GIRO System.

Regarding the efforts to improve service tothe public, the evaluation made by the officersat the local government level on the efficiencyand the effectiveness is shown in Table 3. Fromthe evaluation, it is found that the One-stopService Counter is the most effective (70.6%).The rest are still not that really effective,especially One-stop Licence Counter (52.4%),One-stop Service Counter (46.5%), SuggestionBox (32.6%) and GIRO System (20.9%).

Changing the Attitudes of the Civil ServantsAnother aspect that was stressed by thegovernment in the administrative reform of thelocal government is improving the governmentservants' attitude. This is the main focus oreffort to bring changes in the civil service.Thus the Clean, Efficient and Trustworthyconcept was introduced in order to instil ethicsand good moral values among those in thegovernment sectors especially at the localgovernment level. They have to show andpractice good moral values and be positive intheir attitude.

TABLE 3Effectiveness of services to the public

N-187

Services

One stop payment centreOne stop service centreOne stop licence centreSuggestion boxGIRO

Percent PositiveEvaluation(Effective)

70.6%46.5%52.4%32.6%20.9%

Neutral (Unableto Evaluate)

19.3%36.4%30.5%17.1%61.5%

Percent NegativeEvaluation

(Ineffective)

10.2%17.1%17.1%50.3%17.6%

Total (%)

100100100100100




Apart from that the local government alsointroduced the concept of Leadership-by-example, which was launched by Dr. MahathirMohamad on 1 March 1983. It aimed toincreasing efficiency and productivity in thepublic service. Those of the senior civil servantswill be the example of those under theirleardeship example. In connection with theconcept, excellent service award was implementedmainly to show appreciation to those who arereally efficient and excelled in their work.

On 25 February 1982, Mahathir 'sadministration introduced Malaysia-IncorporatedConcept. Through this concept, the governmentwants to see that Malaysia as a company thusexist cooperation between the private and publicsectors. Not only that shared intelligence canexist between the two sectors, so that this countrywill experience better economic growth. Thegovernment also introduced the concept offriendliness among civil servants. This conceptwas introduced as there had been complaintsabout the unsatisfactory counter service in thegovernment offices. So this concept wasintroduced in the hope that government officerswill be friendlier and to strengthen the earlierconcept of Leadership by Example.

Based on the evaluation as shown in Table4, efforts in upgrading and improving theattitude of civil servants were not veryencouraging. Only 72.2% of the evaluations arepositive towards the Clean Efficient andTrustworthy concept. The implementation ofLeadership by Example (69%); friendliness(69%); and Excellent Service Award (61%)concepts are moderately evaluated. At the sametime, the implementation of the MalaysiaIncorporated Policy is negatively evaluated. Only

35.3% showed positive attitude towards theconcept, thus show to us that the cooperationbetween the government and the public sectoris not that good as expected.

Inculcating Work Ethicsin ManagementApart from the efforts discussed earlier on, theMalaysia government then instil positive ethicalvalues among civil servants. There are seventeenpositive moral values that the government triedto instil as shown in Table 5. The efficiency andthe effectiveness among civil servants in carryingout their daily work is connected to moralvalues that they possess. Thus they should bearin mind that only by having good moral values,positive work ethics can they be more efficientand effective in their performance. This aspectis very important, as they will deal with differentlevels of the society. Based on the evaluationfrom the respondents, it is found that havingpositive moral values when doing daily routineworks, determine the success of theimplementation of the reform in theadministration of the local government. It seemsthat having the values of cooperation (82.4%);self-management (73%); and accountability(76.5%) are the best evaluation made. Theother ethical values are also seen to be quiteeffective in implementing government policies.Hence, only the values of entrepreneurship(39%) are not that popular among governmentservants.

Utilization of Computers in the Local GovernmentManagement

Utilization of Computers is another reformintroduced during the Dr. Mahathir

TABLE 4Effectiveness of improving attitudes of civil servants

N=187

Administrative/Behaviouraltechniques

Percent PositiveEvaluation(Effective)



(Ineffective)

Total

Clean, efficient and trustworthyLeadership by exampleExcellent service awardMalaysia-Incorporated

72.7%69.0%61.0%35.3%

4.3%3.2%4.8%

40.1%

23.0%27.8%34.2%24.6%

100100100100


PertanikaJ. Soc. Sci. & Hum. Vol. 14 No. 1 2006 57


TABLE 5Inculcation of work ethics among local government officers

N=187

Values or Work Ethics

AccountabilityCooperationSelf-managementSelf-developmentDiligenceIntelectualTeam spiritThriftCreative and innovativePositive attitudeIntegrityResponsiveSelf-disciplineClient-orientedHigh perfomance orientedProfessionalismEnterprising

Percent PositiveEvalution (Effective)

76.5%82.4%77.0%65.8%69.0%70.6%72.7%61.0%58.3%65.2%67.9%66.3%68.4%67.9%64.2%57.2%39.0%


2.7%1.1%1.1%2.1%2.1%3.7%2.1%1.6%2.1%1.6%3.2%2.1%1.1%2.7%2.7%6.4%17.6%


(Ineffective)

20.9%16.6%21.9%32.1%28.9%25.7%25.1%37.4%39.6%33.2%28.9%31.6%30.5%29.4%33.2%36.4%43.3%

Total (%)

100100100100100100100100100100100100100100100100100

Source. Survey Data (2002)

TABLE 6Effectiveness of utilization of IT (computer) in local government

N=187

Particular Percent PositiveEvalution(Effective)



(Ineffective)

Total

Greater speed in policy decisionImprovement in accuracyImprovement in counter serviceEfficiency in correspondenceEfficiency in project implementationMore speed programme evaluation

74.9%78.1%80.2%69.0%69.5%59.4%

10.7%8.6%8.6%9.6%13.9%17.1%

14.4%13.4%11.2%21.4%16.6%23.5%

100100100100100100

administration. Though using computers fordoing work in government offices wasimplemented long ago, yet it was still not thatwidely used until 1980's. Thus, in this research,the use of computers really shows us the positiveresult in the effectiveness and efficiency of thecivil servants to upgrade productivity.

Most respondents gave positive evaluationon the utilization of computers as shown inTable 6. About 74.9% of the respondents statedthat the utilization of computers is very effective,

whereby 78.1% stated that the utilization ofcomputers improved accuracy, standardisationand consistency. Apart from that, about 80.2%stated that computers assist in upgrading theirseffectiveness in the counter service. At the sametime respondents' evaluations on the utilizationof computers are very positive in the efficiencyaspect on correspondence, projectimplementation and speed up programme, thatare 69.0%, 69.5% and 59.4% respectively.



Implementation of Privatisation in the LocalGovernment Management

One of the important efforts in theadministrative reform that was implemented inthe Mahathir's administration is privatisationpolicy. The government objectives ofprivatisation policy are to reduce the financialburden of the government, to stimulate theeconomic growth, to promote competition,efficiency and productivity, stimulatesentrepreneurship, reduce the size of the publicsector and meets the objectives of the NewEconomic Policy.

During the first ten years of itsimplementation, the response was not positiveand the people were not convinced of the policy.Yet, some do not understand why it wasimplemented. Only after that then, the realpicture about it become clearer. In theadministration and management system ofMalaysia, privatisation is believed to bring aboutchanges in behaviour, attitude and values of thegovernment servants and changes towards moreefficient, effective, competitive, productive anddynamic (Ahmad Atory 1998).

Effectiveness of Privatisation ObjectivesAt the local government level, theimplementation of privatisation was included inthe government administration reform. Asmentioned above, those similar objectives ofprivatisation at the federal level are also broughtin the local government system such as to spur

local government growth, to increaseproductivity among the local government staff,to promote competition towards organisationefficiency among the local government staff, tocreate Bumiputera's opportunities in businessand to reduce government financial burden ofthe local government system (Atory 1998: 286-288).

How far have the privatisation objectivesbeen achieved at the local government level?The result can be seen from the evaluationmade by the respondents of this research asshown in Table 7. About 66.8%of therespondents agree that privatisation was aneffective tool of economic growth at the localgovernment level. About 58.3% stated thatprivatisation could increase the income of thelocal government. 61.5% respondents agree thatthe privatisation promote competition towardsefficiency of the local government organisation,where as 58.8% then agree that privatisationcreate opportunities for the bumiputera to getinvolved in business. 52.9% respondents agreeto the objective of privatisation in reducingfinancial burden of the local government system.We should bear in mind that the statistics showedin the table stated the difference percentages ofpositive and negative evaluation for severalreasons. One is that the scope for privatisationat the local level is different from one to another.Not all the services are conducted forprivatisation. Some privatisation are dictated bystate/federal governments, perhaps they maynot approve for a variety of reasons.

TABLE 7Effectiveness of privatization objectives

N=187

Objective Percent Positive Neutral (Unable Percent Negative Total (%)Evaluation (Effective) to Evaluate) Evaluation (Ineffective)

Increase economic growth atthe local level

Increase income revenue at thelocal council

Increase competition towardorganization efficiency

To give opportunity in businessto Bumiputra

To reduce financial burden oflocal council

66.8%

58.3%

61.5%

58.8%

52.9%

11.8%

11.2%

10.7%

11.8%

12.8%

21.4%

30.5%

27.8%

29.4%

34.3%

100

100

100

100

100




After analysing the research based on theevaluation made by the respondents about thesuccess of the implementation of privatisation,it can be said to be low and not that satisfactory.However the implementation at the localgovernment level is still new to upgrade thequality, efficiency and effectiveness of theadministration and the service offered.

Types of Privatisation Implemented in the LocalGovernment System

In Malaysia, there are various types ofprivatisation being employed by the government.Thus, the same situation does apply to the localgovernment as well as what is shown in Table 8.Out of 187 respondents, there are four types ofprivatisation being implemented largely at thelocal government level, i..e. Contracting out(107), Management Contract (29), Lease ofAsset (23), Build-Operate-Own (17), Build-Operate-Transfer (21). While Build-Transfer,Build-Own Operate (13 respectively), and Saleof Equity, Sale of Asset and Management-by-Out(9 respectively).

Besides, the nature of privatisation is alsoevaluated by the respondents. Privatization ofService received high number of responses, i.e.78, Partial Privatization (29), and FullPrivatisation (15), while Privatisation ofProduction (3).

Apart from these, there are many activitiesor programmes being privatised by various localgovernments , where initially they were thesolely under the responsibility of the localgovernment. The research study shown in Table9 justified that since a couple years, there havequite a number of activities been privatised,especially in the form of contracting out,followed by service contract and managementcontract.

As Table 9 shows, that there are varioustypes of activities or programs being employedby the respective local governments as torespond to the government policy of theprivatisation. Amongst the very popularprograms that are being employed are thegarbage disposal (54), rehabilitation, cleanlinessand maintenance (20 respectively), parking areand grass cutting (16 respectively), maintenanceand road repair (13 respectively), public toilets,building and drainage maintenance (11respectively). While market maintenance (9),maintenance of street lighting (8), rent vehicle,landscape maintenance, construction of stallsand day and night markets (6 respectively),sewage and drainage (5 respectively), bridgeconstruction (4), housing project and touristmanagement center (3 respectively); and taxcollection/home assessment (2). It is expectedthat more projetcs and programs will be

TABLE 8Types and nature of privatization implemented in the local government

No. Type of Privatization Frequency

1. BOT (Build-Operate-Transfer)2. BOO (Build On Operate)3. Contracting Out4. SOE (Sale of Equity)5. SOA (Sale of Asset)6. BOO (Build-Operate-Own)7. COR (Corporatization)8. BT (Build-Transfer)9. MBO (Management-Buy-Out)10. LOA (Lease of Asset)11. MC (Management Contract)

The Nature of Privatization12. Privatization of service13. Full Privatization14. Partial Privatization15. Privatization of Production

Total

2113

107991771392329

7815293

392


60 PertanikaJ. Soc. Sci. 8c Hum. Vol. 14 No. 1 2006


TABLE 9Local government projects tha: are privatised

No. Types of Activities Frequency

1. Parking area2. Land development3. Service4. Maintenance and road repair5. Garbage disposal6. Rehabilitation, cleanliness and maintenance7. Building and drainage maintenance8. Public toilets9. Landscape maintenance10. Market maintenance11. Bridge construction12. Tax collection/ home assessmentIS. Sewage and drainage14. Construction of stalls and day and night markets15. Tourist management center16. Housing project17. Maintenance of street lighting18. Rent vehicle19. Grass cutting

Total

16221354201111694256338616179

privatised by the local governments throughoutthe country in effort to reduce the financialburden of the local government administrationand at the same time to enhance effectivenessand efficiency of the services rendered to thepublic.

SUMMARY AND CONCLUSION

Referring to various aspects that had beendiscussed, it is clear that in the. Mahathiradministration, the main focus is to reformbehaviour of the civil servants and and workprocedures. It is the important base to improveservice to the public especially at the localgovernment level. The government officers whoare having good quality, capable, skilful and aswell as having positive moral values and workethics, can improve the effectiveness, efficiencyand productivity of the organisation includingthat in the local government.

Apart from that, the government should bemore proactive to strengthen and improve thepresent local government administration systemso that it will be more competitive with goodquality and is able to upgrade efficiency andeffectiveness. It is through the local governmentthat the federal channels whatever development

programmes are, to upgrade the localgovernment itself. Thus, to ensure the successof the reform, all units at the local governmentadministration must be committed to bring indevelopment and modernisation of the systemsin the local government from time to time. Itwould be difficult to achieve the reformobjectives if the local government administratorshardly struggle for it.

At the state and federal government level,more attention and research had been carriedout, unlike that at the local government levelwhere empirical research were not that muchbeing done. Most research is done on thereform of local government laws, leadership,power, financial autonomy, tax and politics.Due to that, details information about theeffectiveness and result of the reform on localgovernment administration is very limited.Hence, the need to undertake research in theeffectiveness, efficiency, productivity aspects aswell as better service delivery system of the localadministration is imperative. The result of thestudy can be summarised as such, various reformefforts implemented at the local governmentlevel need to be improved and paid moreattention. This is because researchers are



optimistic that the local governmentadministration is gaining momentum amid thestrong public demand for better servicesdelivered on the part of local authority. Thiswill bring some benefits for the publicadministration in the country.

All programmes and efforts toward reformsespecially through privatisation must beupgraded and carried out continuously. It isbelieved that through this programme, financialconstraints can be solved as well as can be asource of income. It is also urged in the researchdone by Hazman Shah Abdullah (1992). Itstated that privatisation can overcome financialproblems and as a source of income for thegovernment. Apart from that, throughprivatisation, the government and the privatesectors is supposed to facilitate the public withservices that they need. Thus, to provide thepublic, especially the Bumiputera theopportunity to involve themselves in the businessfield, they eventually will get employment andtheir better living standard will be better.

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(Received: 10 September 2003)

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