Since the cooperative movement was first introduced in Malaysia approximately eighty five years ago, there is no doubt that it has had a positive impact on Malaysia’s economic development. The characteristic of being community-centered and catering to those most vulnerable to economic vagaries has rendered cooperatives as valuable institutions in promoting agricultural development and trade, the creation of employment opportunities and in advancing the social and economic positions of societies in general. This paper evaluates the policies of cooperatives and their programs and performances in boosting the economy of Malaysia as well as investigates the function of cooperative societies in the growth of economic development. It concludes by stating that to be effective and successful, cooperative institutions must adhere to the principles and precepts provided for by the government as in the Cooperatives Societies Act 1993.