Aligning Private Aspirations with Public Good

by M. Bakri Musa

Bravo to Negri Sembilan Mentri Besar Mohamad Hasan! In awarding RM25,000 to each first-class honors graduate of local public universities, he clearly demonstrated where the priorities should be. He went further and forgave the students’ loans if they were given by his state agency.

To put that cost in perspective, at a total of about RM300,000 it is less than the inflated cost of one corrupt school laboratory construction project. Yet the benefit far exceeds that of any school computer lab, even if it were well built. As a bonus, unlike a poorly built building, this award program poses no danger to anyone.

Malay leaders, especially those in UMNO, continually lament on the generally backward status of our people despite decades of ever increasingly generous preferential treatment. Unfortunately that is all they are capable of doing — lamenting. Occasionally a bright leader might emerge who in a show of bravado would chastise and upbraid us by degrading our cultural heritage and questioning our biological endowment.

Only very rarely would a leader like Mohamad Hasan do something right, like having an appropriate mechanism in place and aligning the incentive system that would encourage the development of those qualities that we desire in our people. My complimenting Hasan would I hope encourage other leaders to follow his fine example.

Mechanism Design Theory

It is instructive that this year’s Nobel Prize in Economics was awarded to three economists whose collective intellectual contributions under the rubric of “Mechanism Design Theory” help us understand better the real world in which we humans interact. Their insights could help us create our own institutions that would encourage the development of desirable behaviors and traits in our people by realigning our private and public incentives accordingly.

To purist disciples of Adam Smith, the open marketplace, guided only by the omnipresent “invisible hand” that would smack those who make the wrong decisions and pat those who had the right ones, is the best mechanism to ensure this. However we all know that competition — and thus the marketplace — is hardly ever “pure.” Unrestrained, the human tendency is to collude and conspire. Unrestrained “pure” capitalism would produce only conscienceless capitalists of Dickens’s era. We still see those characters today, in such places as China, resulting in millions of children being poisoned by their cheap but dangerous toys.

Malaysia too, under its “world’s happiest Prime Minister” Tunku Abdul Rahman, was enamored with unrestrained free enterprise, at least as understood by him. The result was disastrous, and no sane Malaysian would want a repeat of the May 1969 tragedy.

To economists of that era, like the eminent Ungku Aziz, the problem of poverty, specifically Malay poverty, would be solved if only we could remove the stranglehold of the monopolists and monopsonists. Broke them we did, with Pernas, Petronas, and other ‘Nases in the form of the various government-linked corporations. We also legitimized the “natural monopolies” in providing essential public services like utilities.

Unfortunately, those monopolists, whether state-sponsored or guided by individual greed, behave essentially in the same manner. Meaning, the public is ill served by them. It turned out that nothing improves service as much as competition. This applies to air travel as well as healthcare. Witness the improvement in air travel with the approval of Air Asia to compete with government-owned Malaysia Airlines. The healthcare of Malaysians is also much better served with the presence of a vibrant profit-making private sector.

Preference Falsification

Mechanism design theorists recognize the world as it is and take humans as we are. That is, we are neither saints nor satans and that we respond to incentives in what we believe to be in our best self interests, our public declarations notwithstanding. What we consider as incentives however may vary. To capitalists, interest income is a powerful incentive to save; to devout Muslims, an invitation to a life of sin and thus a definite disincentive!

A more monumental problem is that what we profess publicly may at times be at variance to what we believe or want privately, a phenomenon economist Timur Kuran refers to in his book, Private Truths, Public Lies, as “preference falsification.” This is the greatest barrier to formulating sound public policy.

The insight of mechanism design theory is in implicitly recognizing this and designing institutions that would best align public and private goals. This could be reconciling the seller wanting to maximize his profit and the buyer demanding the cheapest product; to universities upholding meritocracy and admitting only “top” students over the demands of influential alumni in “legacy” admissions favoring their children. On a broader public order, it could be the government wanting the greatest revenue from its broadwave spectrum to making sure that the public is well served.

In my book An Education System Worthy of Malaysia, I suggest ways how we could encourage excellence among our students by guaranteeing them scholarships when they manage to secure admissions to elite universities of the world. Not only that, we would give them the freedom to choose whatever field of study they wish in order to pursue their dreams. They and Malaysia would benefit from such a policy, a congruence of public policy and private aspiration.

In a later book, Towards A Competitive Malaysia, I suggested that public contracts be preferentially awarded to companies whose work force reflects the greater Malaysian society regardless whether the company is foreign or locally owned. It matters not whether the company is a subsidiary of Temasek or Guandong State Development Corporation, if its workforce reflects the greater Malaysian society, which in a practical sense means enough Malays at all levels, it would get preferential treatment.

This would align the public goals of attracting foreign investments, getting the best contractors, and integrating the private sector work force with the private one of encouraging Malays to pursue practical subjects so as to make them employable. We thus effectively align incentives such that private gains are compatible with the pubic good, or to use the language of the mechanism design theory, “incentive compatibility.”

Locally, our leaders may want to groom “glokal” Malays, but they unhesitatingly “protect” their children and even in-laws, a clash of stated public goals with individual’s private agenda! By rewarding generously those who excel scholastically, Mohamad Hasan is attempting to reconcile public policy with private aspirations by designing his own mechanism or institution albeit on a very tiny scale.

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34 Replies to “Aligning Private Aspirations with Public Good”

  1. I wish to point out that the Orang Asli, not the malays, are the original inhabitants of Malaysia. Most of the malay Malaysians came from Sumatra and other parts of Indonesia. They only migrated here much earlier than the Chinese and Indian Malaysians. It does not mean they deserve privileges or rights just because they were the pioneer immigrants.

    I applaud the non-malays who have kept quiet but are though uneasy over these special rights. You are true heroes, willing to show malays that you can succeed despite the odds. But neither I nor you should give up the right to be a first-class citizen of your country.

    In fact there is nothing wrong in working hand in hand for the greater good of Malaysia. As for the malays who insist on hiding behind the veil of malay special rights – you have lost the respect of non-malays a long time ago.

    Most non-malays I know come from low and middle income families. They struggled to save every sen. They like everyone else, spent their hard earned savings plus their EPF funds to educate their children. The poor ones can’t even do that as there is no one to help them. Can they ask for help from the government? Who represents these people?

    It is arguable that if not for the contributions of the Chinese and Indian Malaysians who helped in the development of this country tremendously, Malaysia would probably be in same category like Indonesia or the Philippines, if not worst.

    The Umno and others of the same mind should learn to stand on their own feet rather than claim for special privileges and rights. The world is becoming globalised and if they don’t change their attitude, they will only become beggars in their own country.

  2. “Bravo to Negri Sembilan Mentri Besar Mohamad Hasan! In awarding RM25,000 to each first-class honors graduate of local public universities, he clearly demonstrated where the priorities should be. He went further and forgave the students’ loans if they were given by his state agency.” Bakri Musa

    My God! Is that what they do today – offering cash prizes to graduates with First Class honors by the dozens! Personally I’d be happy with a Book Prize and RM1,000.00. Well, after factoring in inflation over the last few decades, perhaps RM5,000.00 would be a decent sum today.

    When I was an undergrad, a First Class Honors in any field is rare and is awarded not just to the best and brightest of the graduating class of that year, but to the best of the best measured against the performance of the best among graduates of any academic year – and more. If no graduate measures up, no First Class Honors would be awarded and that situation could continue for years without a candidate filling that position.

    Today they roll out First Class Honors by the dozens! Does that mean that the academic standard and reputation of a particular university is to be measured in terms of how many First Class Honors graduates they are able to produce each academic year?? If that is the case then our universities are the best among the world’s universities.

    This is bound to happen when education is politicized. ‘Academic excellence’ becomes tainted by partisan politics.

  3. Perhaps this is only ‘jalan boleh’ among all other ‘jalan tak boleh’ to produce towering Malays.

    Since quiet long ago, JPA, MARA…. were already in the practice to convert study loans to scholarships if one attains good results, but not too sure whether it must be 1st class honors. Maybe this incentive is not powerful enough since most of the loan borrowers convert the loans to scholarships unilaterally, by defaulting the loan payments.

    Today the incentive is $25,000 cash bonanza enough to buy a Kancil, next day maybe a Proton voucher to show the world ” top class student with top class car”

  4. Undergrad2 says:
    “This is bound to happen when education is politicized. ‘Academic excellence’ becomes tainted by partisan politics.”

    Not only university degrees. The ‘stupid’ BN government is known to even stoop so low as to lower passing grades so as to post glowing results in the UPSR, PMR and SPM exams! Especially in an election year! Every vote counts. As if parents, happy with their children’s results, will thank the government for a ‘brilliant’ education system and vote BN.

    Some examiners for these exams tell me how the Ministry of Education ‘distorts or manipulates’ such results to suit their own ends. So much for their credibility! What wouldn’t they do to preserve their ‘Ketuanan”? Why have exams in the first place? Might as well let each school do their own tests. Saves money, saves time, saves stress. Besides, it’s an extension of the free books, free schooling…and now… hey, presto…free results! So what grades do you want? Why not talk it over a cuppa, eh?

    Someone once sent me an exam paper, better known as 21st Century “English Language For Science and Technolgy”. At first glance, I honestly fell off my rocker! And that’s no fib. I even had a brain seizure and literally gasped for breath. The shocking truth is, this English Paper is so student-friendly that even Zam (or some call Maidin) would have got an ‘A+’ (which is not an official grade but which is truly and verily better than an ‘A’.). So too would the Jerai MP, Zakaria, MAt TAib and every other non-English-speaking and non-English writing UMNO MP and ADUN get theri “A’s. That’s one helluva way the BN government builds up the euphoria over the long list of candidates whose string of ‘A’s are longer than the Penang Bridge!!!

    Ha, ha, Malaysia Boleh! But the world will never understand why Malaysian graduates can’t speak or write good English anymore. I am just wondering if the reason why some judges don’t write judgments or take so many years to write judgments (perhaps, long after prisoners have died in their prison cells) is because their English is so poor, the right words are nowhere to be found in their brains. But that is another story.

  5. While it may be a good gesture can someone pls ensure the money is given to these students? For I know the govt or how these fellas do things are appalling. They have many bright ideas but the implementation is truly one of a kind.

    Just yesterday I read of how the students who particiapted in the Merdeka celebration has yet to rcv their money. Must they wait for another 50 years or has someone already gasak the money and hope that these rightful beneficiaries will sit down quietly and forget about it. Afterall, it may not be much.

    MB may look good with his gesture but hey if I can dish out money just like that and it doesnt belong to me I can even look like a god to many ppl! Remember how Zakaria can fete the many orphans in his PLUSH MANSION? Hey whose money are those? So shouldnt these orphans be thankful to us instead?

  6. Can only chip in with the earlier comments.
    The gesture is noble, in reality times have changed since Bakri Musa left for overseas. These days, public (and private) universities have linked staff evaluation to ‘academic achievement’ of their students, CGPAs are part of KPI, passing marks have been lowered. Recently a public university changed the process for calculating the overall result. All contributing marks (quizzes, test, assignments, final, etc.) have to be rounded _up_ _before_ being summed up for the overall marks.

    For everyone not in the know, the usual cut-off for As is around 70-80 percent. The lower limit to pass is situated effectively between 30-35 percent.
    And, contrary to the old days (or some other places), when you fail your coursework, you may still pass by scoring a tad higher in the finals. Or, when you score well in the coursework (group assignment anyone?), you may as well fail your finals and still pass.
    These facts are, by the way, reason for dissatisfaction of employers with graduates. Simply, because grades do not mirror knowledge and aptitude realistically. Overall, and on the long run, no favour is done by helping the graduates to pass and score through administrative means. Instead, passing and scoring need to be brought back into lecture halls and labs.

  7. “This is bound to happen when education is politicized. ‘Academic excellence’ becomes tainted by partisan politics.”

    There is truth in what undergrad2 said. Our education system is thoroughly and completely politicised.
    First Class Honours, Distinctions (As) in STM and SPM are dished out like one cent coins to show the world that we have a fantastic education system. So that parents will be happy with the government.
    How many of us are aware that 70 marks can get you an A in our public exams?

    First Class Honours from the Malaysian University cannot match one from a Singapore University.

  8. The prize of RM25,000 and a waiver of the loan…is excellent reward…provided it is applied to all Malaysians irrespective of race and of course…..no exam papers are leaked to produce “great, intelligent” Malays. But then …this is a hopeless thing to wish for….for cheating has become part and parcel of the bumiputra culture. Nay it is firmly ingrained in it so as to pass off as the norm in that culture.

  9. With regard to Endangered Hornbill. I was formerly marking papers for the Exam Board. I believe there is a separate band for A for different papers. A student who didn’t answer two long questions which constitute 30% of the paper still got a 1A for Additional Maths. Science subjects will have a lower band to get an A as oppose to Sejarah, Chinese or BM papers. Maybe it is for some students of a particular race to help them get more 1As.
    A student with a 1A for English can’t even write a simple article. Everything is so politicised that there are so many straight A students. That is why our local universities aren’t even ranked.
    I had the opportunity to read an English passage done by a senior graduate teacher(aged around 35), she had more than five grammar mistakes in her article. Maybe it’s because she is of the Boleh race and she’s allowed to make 60% mistakes. NAZI UMNO always stressed on their majority, so all under achievers, low productivity workers, slow learners and mat rempit undergraduates are expected to perform at 60% of what non bumis do. UMNaziO MPs behave with a thinking capacity of 60% of ordinary people. So when they talk nonsense in Parliament, please excuse them! Check and see what they are doing with the Matrikulasi students. Their syllabus is about 50% of what an STP student is doing. Compare the syllabi of IPTA courses with NUS or NTU courses. You will be shocked.

  10. M Bakri, an interesting piece.

    There are many reasons that I can see. Mohamad Hassan is just one. Rewarding deserving students is nothing new. It is just the implementation that is in question. Some 20 years ago, I had to beg, borrow and steal just to enter the local university. Then as well as now, rewards had NEVER been accorded on the basis of excellence. Mohamed Hassan is doing the extra-ordinary.

    Could this be related to the impending GE?

    On the other hand, Mohamed Hassan could be genuine. Of course the sum is negligible compared to the billions embazzled yet I am looking forward to the good this could produce. We just hope that this is emulated by all states in Malaysia.

  11. “for cheating has became part and parcel of the bumiputera culture..” Raven77.

    That is far from the truth, or you choose to believe what you hear and not what you see, probably because you are so enclosed in your own circle of friends. Do you have a bumiputera friend? Do you associate with them? Do you know who the bumiputeras are?

    Raven77, you travel from Penampang to Kota Belud, I am not sure the exact spot. Along the road are stalls after stalls. Fruits and vegetables are sold BUT, there’s a big but there, there is not a single trader seen. You stop your car, pay accoring to the price written, (even make your won change from the money in the kerosene tin) and off you go.

    We are all bumiputeras here Raven77. Welcome to Sabah and Sarawak. We are still friends.

  12. Since we are on the subject of academic excellence, the top student for PSLE (Primary 6) in Singapore is a Malay and this is the second time in the past 4 or 5 years.

    So it shows that Malays can compete with the rest on a meritocratic basis if the government stops preaching the politics of the “crutch mentality”.

    Of course the withdrawal symptoms will be painful to all concerned.

  13. ENDANGERED HORNBILL: “I am just wondering if the reason why some judges don’t write judgments or take so many years to write judgments (perhaps, long after prisoners have died in their prison cells) is because their English is so poor, the right words are nowhere to be found in their brains. But that is another story.”

    About this other story….

    Those judges who earned their law degrees in the U.K. and went on to qualify as barristers in the U.K. you gotta give it to them. They have good control of the English language. The course leading to the London bar exam is grueling, demanding and the exam is one of the most difficult public exams to pass – the pass rate being a constant 33% each sitting.

    The same cannot be said of many of our local graduates – products of our national education system including many of the graduates of the University of London External who never had to leave Malaysia to earn their degrees. Their control of the English language could be better.

    But I suspect the problem with the ‘slow’ judges is that they are distracted by voices they hear such as this one

    http://rotikacangmerah.blogspot.com/2007/11/nakal.html

  14. Next academic year they will churn out a few more hundreds! General Election is just round the corner, remember?

    Negeri Sembilan’s MB Mohamad Hassan should have awarded those first class honors graduates a “Dato-ship” each, at least it’s not so much at tax-payers’ expense afterall recipients of such titles get younger every year.

  15. Dr. Bakri is fast losing his touch. Perhaps being the product of NEP, his thought is so confined/trapped in the “tongkat” mentality.

    What we need is the total revamp of our educational system. Get rid of all those sub-standard school teachers and U lecturers and start engaging new ones through meritocratic system. We can’t wait for those mak/pah ciks to retire because by then another generation or two of our kids will inherit these sub-standard education and pass it down. Send these mak/pah ciks to run the canteens or pasar malam.

    Engage so many non-Malay educators to work side by side the Malays to show the different standard and dedication to wake them up or instill competiton may help. Or let the non-Malay be the head of schools/departments so we don’t get excuses of bad attendances/performances attributed to “sakit”, “saudara sakit”, “banjir”or “tertidur”.

    Bring back the system base on meritocracy otherwise the Malays are fast losing their credibility. Or do they have any in the first place? Our spaceman only has good looks and a set of nice teeth, a candidate for advertising Colgate?

    Of “Malaysia too, under its “world’s happiest Prime Minister” Tunku Abdul Rahman, was enamored with unrestrained free enterprise, at least as understood by him. The result was disastrous, and no sane Malaysian would want a repeat of the May 1969 tragedy”, as peddled by Dr. Bakri as the unavoidable consequence of Tunku’s rule or free enterprise, I think it’s a cruel lie and a direct result of him consuming too much of the NEP drugs. Dr. Bakri should in all fairness give the alternative view of Dr.Kua Kia Soong as stated in his book and not just state his own as gospel truth.

    What “glokal” Malays is Dr. Bakri talking about? Is diging oil from the soil/off shore by Petronas and selling it really difficult. Only the Indonesians could have failed to do so.

  16. So everytime they churn out first class honor they give the cash to them so that they would vote for UMNO and will bankrupt the country in a bout let’s see…10 years or less? What stupid inpractical joke are you playing here dude?

  17. Also with such low standard of education standard and only a Bachelor degree, where nowadays it does not mean much, you would think they would have learned to put effort into producing better teaching staff and more educatioin autonomy. But nooooooo they decided to do even more dumb stuff of what I call, white elephant investments.

  18. “Also with such low standard of education standard and only a Bachelor degree, where nowadays it does not mean much…”

    In the United States with its many colleges, universities a Bachelor Degree means exactly that – a bachelor with a degree. It gets you a job. It may not be a job of your choice but it gets you a job. Haven’t heard of any bachelor without a degree without a job.

  19. It’s not at all amusing to see all discussions in all topics here degenerate into racial bashing. Wouldn’t it be nice if we’re all clear on who we are actually angry at, and channel our anger at them rather than make sweeping statements against any particular race?

    Besides, the author’s point is about aligning incentives to desired behaviors. The government should do more of this. The mechanics and the quantum of rewards would have to be thought through.

    The example cited happens to be related to education. But the article is not about education.

    Don’t be surprised if the comments here are being used by certain quarters to stroke the fire of paranoia amongst malays. Who can blame them if chauvinistic statements appear in black and white?

    Think first.

  20. Singapore’s best student this week in it’s PSLC exam happened to be a Malay girl. No tongkats..No NEP and yet a student can score good results. With the right policies race do not become a stumbling block.

  21. All this talk about a Malay student being top scorer and all, does it not validate the popular perception – or mis-perception depending on where you are coming from – that Malays are not expected to do well academically because they are members of a genetically inferior race?

  22. The menteri besar of Negri Sembilan , Mohamad hasan is a poor administrator.Under his present tenure Negri Sembilan is heading to become a failed state.Investors are folding up and closing shop.Recently two Japanese factories at Beranang closed their operation and transferred their operation to Vietnam.Samsung, the korean electronic conglomerate also ceased their operation in negri Sembilan.If you were to pass along Tun Dr. Ismail you will notice rows and rows of shops being closed and empty.People are just deserting this state because the govt is in a state of Paralysis.Along of decision that reaches the state exco remain unresolved.
    Investors applying for sand licence has been waiting for two years now without any resolution.The grape wine is that his brother is monopolising the sand business and therefore to protect this monopoly he has stopped issuing any sand licence.Housing developers are in a quandry as there is an artificial shortage of sand in the building industry and this has caused the price of sand to spiral upwards.
    In today NST, he admitted that investors have pulled out from a $1billion investment because of lack of the Multi-media corridor.But the real reason is because the investors have lost faith in the govt under Mohamad Hasan. He is indecisive and the state is suffering from his lack of leadership.
    So please Mr. Bakri, before you heap praise on this man please get your facts right.Giving a few donation does not make him an efficient administrator.

  23. Talking about the quality of education, i did remember that my daughter came back from school feeling rather distraught, complaining that her English teacher had given her composition plenty of red ink. After reading her passage, I realized that she was right to feel distraught because the words in red had got more grammatical mistakes than what she had written! What was shocking was: the teacher just came back from USA with a M.A. in English! I did what many angry parent would do. I used green ink to run through all her mistakes and told my daughter to tell her that she could call me at my office for clarification. The call never came.
    It would be interesting to trace all those GENIUSES who had scored 12As and above at SPM and find out how they had fair in their degree or even post-graduate courses. If they have judged as well as other students in the overseas Universities than we should accept that local standards are comparable and we all should stop questioning the merit of it.

  24. Quote from undergraduate2; ‘education is politicized’,
    Academic excellence become tainted by partisan politics!!

    It is not a question of doubting the Malays’ IQ. It is the
    principle we are talking about.

    If there are so many Malay can be top scorers in public
    exams, why the politicians still want to CHEAT in the uni-
    versity/college exams by leaking out exam questions in the
    special tuition classes where only 100% Malay students
    can attend??!! Is Cheating Behaviour a Malay Culture??

    I have friends as lecturers/tutors in uni and colleges and
    they revealed that such activities are ABSURD and only
    can happen in Malay-sia!! Why is it so??

    Worst still when the examiner marks the students’ exam
    papers, they are told to add some ‘basic marks’ on top of
    what the students get. It is because of their livelihood
    (cari-makan), they have to succumb to such unfair demand
    from the authority of respective varsiti??

    Why is this unhealthy phenomenon occur in our education
    systems?? Can somebody speak out for that??

    I really feel ashamed of such act. What about you? It is
    truly the idea to Cheat has embedded in the minds of
    majority Malays called Bumiputras!!??

  25. this is a good thing, considering the cost of education, especially overseas, these days. malaysian pay-grade seems to be at a stand-still, and if this continues, soon we’ll only be able to afford local education for our children.

  26. “The grape wine is that his brother is monopolising the sand business and therefore to protect this monopoly he has stopped issuing …” Richard Teo

    What’s with the ‘grape’ and the ‘wine’?

    I think you meant ‘grapevine’. Students of behavioural science should be familiar with the term.

  27. “….//…In a later book, Towards A Competitive Malaysia, I suggested that public contracts be preferentially awarded to companies whose work force reflects the greater Malaysian society regardless whether the company is foreign or locally owned. It matters not whether the company is a subsidiary of Temasek or Guandong State Development Corporation, if its workforce reflects the greater Malaysian society, which in a practical sense means enough Malays at all levels, it would get preferential treatment. …//…” – Dr M Bakri Musa.

    What does this exactly mean? Does work force reflecting the greater Malaysian society refer to an approximate ratio of 60% Malays, 26% Chinese, 12% Indians?

    Isn’t this politics of race or race based NEP Mentality manifested here – which Dr Bakri had in other writings seem to decry – instead of meritocracy? Shouldn’t public contracts be awarded to companies that deliver best quality and reasonable costs and other meritorious business terms (whatever the racial composition of their managerial or other staff work force)?

  28. To be fair to Bakri he is giving credit to Mohamad Hasan for doing the right thing in rewarding academic excellence. He is NOT saying that Mohamad Hasan is an excellent administrator of his state. Anyway I think it is sad that a state MB has to come up with such a scheme – shouldn’t such a scheme come from the Higher Education Ministry and leave Hasan to look after his own business?

    BTW while on the subject of Malaysia Boleh and cheating, I would like to point out that my company staff was a former lecturer teaching a foreign language at University Malaya. She quit in despair after being asked several times to “help” pass Bumi students that had failed on the grounds that they had personal problems. These were students that had not even bothered to attend her classes!

    Which really makes me wonder if they resort to arm twisting lecturers in language classes, how about other faculties like engineering and medicine? Makes one wonder what kind of bumi engineers and doctors UM must be producing….is there no one to audit and correct such atrocities?

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