Singapore's Success

Henri Ghesquiere worked at the International Monetary Fund and wrote this to explain Singapore's economic performance in terms other than luck or authoritarian efficiency. His argument is that the outcome followed from a small set of policy principles applied consistently over decades, supported by institutions capable of implementing them.

The principles he identifies include fiscal prudence with sustained budget surpluses and accumulated reserves; a high savings rate imposed through the Central Provident Fund; openness to trade and foreign investment without protection of domestic firms; competitive markets in traded sectors alongside state provision in housing, transport and utilities; pragmatism about ideology, meaning willingness to use state or market instruments according to what worked; and a public administration recruited competitively and paid at private sector rates to reduce corruption.

Ghesquiere emphasises the self-reinforcing nature of the arrangement, in which competent administration produces good outcomes, which produces public support, which allows unpopular decisions, which sustains competent administration. He also addresses whether the model transfers, and is cautious: he argues that the principles are general but that Singapore's small size, its geographic position and the specific political circumstances of its founding made implementation possible in ways that do not replicate. He writes as an admirer and gives limited attention to the political costs, to income inequality, to the position of the foreign workforce, or to the arguments about factor accumulation.