PARTY-POLITICAL (IN)CONGRUENCE AND FEDERAL-STATE FISCAL RELATIONS

Since the first election held in 1955, the National Front (Barisan National and also known as the BN) has won the mandate to rule Malaya/Malaysia. However, the political domination of the BN was shaken with its worst perfornance in the 2008 general election. BN suffered massive losses; losing its two-third majority in parliament and mandate to rule five state governments out of the 13 contested states. Consequently, the 2008 general election transformed the landscape of Malaysia politics including the restructuring of federal-state relations. This paper argues that the changes in political party strength were resulted from the changed voting pattern and the transformed political opposition has the potential to alter federal-states relations notably the federal transfers. In the case of Malaysia, centralisation offers the federal government considerable scope to provide different treatment towards those states that are governed by the dominant major political party and others that are governed by the major opposition party.