This article first appeared in Forum, The Edge Financial Daily on February 7, 2022

I was once in a building that had six lifts in the lobby. Of those six lifts, one was for Bomba and therefore inaccessible to the general public. Of the remaining five, two were under repair and thus unusable for the time being. Of the remaining three, two were “reserved” for VIPs in the building. This left one lift, out of six, for everyone else in the building. If the building was only four storeys tall, it would not be that big of an issue. But imagine if the building were 50 storeys.

Malaysia leads the world in power distance, a national culture measure created by Dutch social psychologist Geert Hofstede. Power distance is defined as “… the degree to which the less powerful members of a society accept and expect that power is distributed unequally … People in societies exhibiting a large degree of power distance accept a hierarchical order in which everybody has a place and which needs no further justification”. In thinking about how this may be reflected in day-to-day life in Malaysia, I find that this anecdote of the lifts is an excellent representation.

Another way to think about this is traffic, particularly in the Klang Valley. There are always construction projects going on, thereby necessitating the blockage of a road or two, akin to the above-mentioned lifts under repair in the lobby. Then, of course, we also have vehicles such as ambulances and fire trucks that, rightfully, deserve every right of way on any road, just like the lift for Bomba. And then we have those with police outriders — it would be interesting to see, on a cross-country basis, how many in other countries, apart from their heads of state, heads of government and so on, are entitled to have police outriders.

I have made the point in a previous article in this newspaper that Malaysia’s power distance or “VIP culture” will be a factor holding us back from achieving a much higher economic development trajectory. I stated, “We will not achieve a true merdeka of self-determination for our country if we, at the societal level, do not ourselves possess a merdeka of our spirits.” The reason is simply because innovation, creativity and progress require questioning everything, including the authority of those in power, and the authority of the past. Indeed, there are arguments that such a mindset was a crucial ingredient in why the Industrial Revolution occurred in Western Europe, versus, say, China and India.

However, we are where we are — we lead the world in power distance. And yes, ideally, I would love to have this completely reversed. But before we can go about doing that, we must do a couple of things. First, we need to understand what function power distance plays in our society and why it has survived with such prominence for so long. Second, we need to understand what the realm of possibilities may be for reversing this trend.

A helpful way of thinking about these questions is the field of cultural evolution. If we believe that culture matters for economic development, and there is a rapidly growing body of evidence that it does, then we need to understand why different countries or societies have different cultures. After all, as argued by Harvard anthropologist Joseph Henrich, “…how well a society functions depends on its package of social norms”.

So, what is cultural evolution? In general terms, cultural evolution is the idea that cultural changes — changes in socially transmitted beliefs, knowledge, norms, skills, customs and so on — can be described as a Darwinian evolutionary process that is similar in key respects, though not necessarily identical, to genetic evolution. To put it another way, if Darwinian evolution tells us that humans evolved into having large brains because they helped us survive and thrive in our environment, cultural evolution tells us that particular cultural variants evolved because they help us and the groups we belong to survive and outcompete other groups. Whether or not the cultural variant is “good” or “bad” is not the point; what matters is its usefulness.

Therefore, if Malaysia is the world leader in power distance, we need to understand why that is. Casually dismissing it as some undesirable part of our culture will not get us anywhere closer to addressing it. Thus, we must investigate why power distance and our “VIP culture” has persisted for so long, and continues to persist. What benefits did it bring Malaysia, as a whole, such that it was this particular variant, as opposed to a more egalitarian one, that persisted? Moreover, even if we believe that this cultural variant benefited only a few at the expense of the many, why did our society continue to let it thrive instead of letting it die away?

Now, suppose we have found some convincing answers for the “fitness” of this cultural variant, and if we believe this cultural variant is not conducive to long-term economic development, the obvious question is how can we reverse it? And herein lies a tremendously difficult problem. In genetic evolution, path dependence — way leading on to way as Robert Frost would put it — means that as we climb an evolutionary mountain path, it is essentially physically impossible to move back downhill. Genetic evolution does not allow it, given that we have evolved particular traits that beat out other traits lower on the mountain to make us “fitter” for our environment.

In the social world, while it is not physically impossible to move back downhill, it is still extremely difficult. Jeffrey Ely, an economist at Northwestern University, coined this scenario as a “kludge”, which he defines as “an improvement upon a highly complex system that solves an inefficiency but in a piecemeal fashion and without addressing the deep-rooted underlying problem … the kludge itself — because it makes sense only in the presence of the disease it is there to treat — intensifies the internal inefficiency…”

In the public policy arena, while it is possible to move downhill and to abolish previous policies, what typically happens, as Harvard economist Nathan Nunn writes is, “…political parties choose not to move ‘downhill’ by removing old rules, but instead only choose to add new rules. This occurs because as policies become more complex … the rules become entangled in one another. And so removing an unfavourable rule involves also removing favourable rules if they are entangled. Thus, when policy complexity is high, there is entanglement and a bias towards adding rather than deleting rules …”

And there we have it. Our “VIP culture” and power distance is our kludge. And it is hard to go back downhill, especially after years and years of it being a crucial characteristic of our society. Policies preserving it — almost overwhelmingly put in place by folks in the status quo – have made it more entangled with a whole bunch of things. But this is the challenge we face. Power distance and our “VIP culture”, which may have worked in different instances in the past or indeed in the present for a given objective, is unlikely to be conducive to future economic development objectives. But in order to reverse it, we first have to understand why it persists before we can think of moving back down the kludge.

Nicholas Khaw is an economist and head of research at Khazanah Nasional Bhd

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.