CME: A Proposal to Preserve both Democracy and Political Stability

SUNDAY, 21 January 2024: The recent debate around the proposed Fixed-term Parliament Act (FTPA) revolves around the following reasoning: the democratic system requires the introduction of a certain degree of restrictions in order to promote political stability and – with it – enhance economic growth.

“While it is true that political stability can promote economic growth, it is also true that democracy and alternance should not be sacrificed. Furthermore, reducing the level of competition in the democratic system can also be detrimental for the economy, as it reduces the incentives to do better by creating the idea that political equilibria will not change”, commented Dr Carmelo Ferlito, CEO of the Center for Market Education (CME).

According to CME, it is possible, instead, to improve the degree of democracy in Malaysia and at the same time to increase political stability with the introduction of a new electoral law.

Currently, the 222 Malaysia’s Members of Parliament are elected by dividing the country into constituencies, whereby the most voted candidate of each constituency wins the seat and the other parties do not get any representation, independently by the quantitative consistency of each party (British system). Such a system suffers of a lack of full representativeness, as only the first candidate in each constituency is elected. Furthermore, the system forces party to form pre-electoral coalitions, while it remains extremely difficult to know the real weight of each party in the coalition.

Our proposal is to divide the country into macro-constituencies, corresponding to the states and federal territories; each constituency elects a number of MPs proportional to its population. Furthermore, MPs are assigned proportionally to the number of obtained votes: 20% of the votes correspond to 20% of the available seats. However, we propose that only 80% of the seats should be assigned with this system.

According to our proposal, 178 of the 222 seats should be elected in each state as it follows from the table below.

For each state, each party which decides to run in that state should present a list of candidates equal to the number of available seats. By going to vote, citizens would have the possibility to choose both their preferred party and, within the party, their preferred candidate. Example: if in Selangor UMNO obtains 33% of the votes, UMNO will win 12 of the available seats and the elected MPs will be the first 12 by number of preferences. The possibility of choosing their preferred candidate will force politicians to establish a relationship with the territory and the voters. Moreover, it will give chance to “outsiders” to be elected if they have a good relationship with their territory despite not having a good relationship with the party leadership. 

The main advantage of the proportional system is to grant representativity also to smaller parties without forcing them into an alliance with bigger groups. At the same time, it will avoid bigger groups to be threatened by smaller but indispensable parties.

How is this system granting stability instead of fragmentation? With two adjustments. The first one is to put a 5% floor for obtaining representation: in order to participate to the distribution of the constituency seats, a party should obtain at least 5% of the votes. The second regards the attribution of the 20% remaining seats; in fact, we have proposed that only 178 seats are distributed with the proportional system. The remaining 44 seats will be a stability premium assigned, after elections, to the wining party or coalition.

Dr Carmelo Ferlito, CEO of the Center for Market Education, concluded:

“We believe that our proposal presents the following advantages:

  • It is more democratic as it grants representation also to smaller or newer parties; the composition of parliament will better represent voters’ will.
  • It incentivizes the formation of coalitions after elections and only if necessary, so to force political agreements on the base of a clear and implementable programmatic pact.
  • It introduces healthy competition within the same party thanks to the preference system. This would allow also outsiders to emerge if they are able to gain consensus among the voters. There is a higher degree of power in the hands of voters.
  • Fragmentation is avoided with the 5% floor system.
  • Stability is granted by the 20% stability premium”.

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About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia, and Jakarta, Indonesia.

As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces.

In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities.

Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions. Visit