Sources of Inefficiency of the Waqf Institutions in Malaysia

Dahlia Binti Ibrahim, Haslindar Ibrahim, Wong Wai Peng


The purpose of this study is to assess the efficiency of the Waqf institutions organized by the State Islamic Religious Councils (SIRCs) by applying the Data Envelopment Analysis (DEA). In Malaysia, the SIRCs are responsible to manage Waqf assets entrusted to them. As of recent, there are quite a number of studies looking into the performance of the SIRCs in managing the Waqf. Therefore, there are three types of DEA model applied in this study; technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE). The data consists of 13 Waqf Institutions for the period of 2007 to 2013. The results of this study suggest that only 1 of the Waqf institutions is fully efficient and the other 12 institutions are inefficient when the analysis is done on a full sample of the 13 SIRCs. Further analysis on the technical efficiency components also reveals that inefficiency of the Waqf Institutions is mainly caused by managerial inefficiency rather than scale inefficiency.


Efficiency, Data Envelopment Analysis (DEA), Waqf Institutions

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