This chapter is a historical study of the emergence of the dominant forces that shaped the types of regimes found in Malaysia and Indonesia. Both emerged as democratic post-colonial states. However, in Indonesia the democratic process was suspended altogether and, after about a decade of independence, an authoritarian state emerged there. Malaysia, on the other hand, retained in relative terms a functioning democratic system. After the onset of the financial crisis in 1997, some have suggested that there is a convergence in regime types between the two, that is, the ousting of Anwar Ibrahim reflects a general tendency towards greater authoritarianism while the ousting of Suharto is a manifestation of democratisation. The contrast between Indonesia and Malaysia, then, provides us with an opportunity to study the conditions under which democracies emerge and can be sustained in post-colonial states.