Bryan Caplan  

Two Paradoxes of Singaporean Political Economy

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I've finished my paper for Ethos, the journal of Singapore's Civil Service College.  From the intro (footnotes omitted):

Officially, Singapore is a democracy.  When you compare it to almost any other democratic country, though, Singapore has two deeply puzzling features. 

Puzzle #1: Singapore frequently adopts the kind of policies that economists would call "economically efficient, but politically unpopular."  For example, Singapore has (nearly) unilateral free trade, admits unusually large numbers of immigrants, supplies most medical care on a fee-for-service basis, means-tests most government assistance, imposes peak load pricing on roads, and fights recessions by cutting employers' taxes.  In most democracies, advocating any of these policies could easily cost a politician his job.  In Singapore, policies like this have stood the test of time.

Puzzle #2: Even though it follows the forms of British parliamentary democracy, Singapore is effectively a one-party state.  The People's Action Party (PAP) has held uninterrupted power since the country gained Home Rule in 1959, and has never received less than 60% of the popular vote.   Even more strikingly, the PAP has a near-monopoly in Singapore's Parliament.  In many electoral cycles, this party literally won 100% of the seats; it currently holds 82 out of 84.

What's makes these puzzles so puzzling?

[Singapore] persistently adopts policies that the democratic process would overturn almost anywhere else on earth, but the same party keeps winning election after election by a landslide.  Why doesn't a rival party promise to abolish the PAP's unpopular policies and soar to power?  How, in short, is Singapore's political-economic equilibrium possible?

The paper then explores three families of explanations:

1. Singapore is not really a democracy.

2. Singapore's voters are unusually economically literate.

3. Singapore's voters are unusually loyal, deferential, and/or resigned.

The punchline: Explanation #1 is simply wrong, and #2 is dubious.  But several variants on #3 fit the facts well.  The main challenge is figuring out the proper weights to assign to each of the main contenders.

P.S. Since I was tormenting my colleague Ilia Rainer with the "Who cares?" question over lunch, I now feel obliged to address it.  Here goes:

Understanding the paradoxes of Singaporean political economy sheds new light on political economy in general.  While most democracies have frequent partisan turnover at the national level, sub-national democratic politics are often as one-sided as in Singapore.  In the broader world, though, one-party democracy does not seem to depend on the delivery of remarkable economic performance.  Is this because the relative importance of loyalty, deference, and resignation varies?  Or did Singapore simply have the good fortune to put blind trust in men who coincidentally deserved it?

Once political economists have a better handle on one-party democracy, they will be ready to take a second look at national politics.  Why exactly is it so hard for one party in a democracy to stay on top at the national level?  One interesting hypothesis is simply that people are more interested in - and therefore less resigned about - national politics.  But this raises further questions: What determines whether a given democratic contest will catch voters' interest?  And under what circumstances does greater interest lead to worse policies?


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COMMENTS (29 to date)
Peter St. Onge writes:

Bryan,

I wonder if loyal, deferential and/or resigned can be categorized by source: culture or policy. It seems reasonable that Singaporean culture, at independence, was some weighted average of, say, Malaysians, Tamils, Hokkienese, and perhaps British, who all have had very different political experiences since. So culture on its own seems fairly weak.

Which leaves policy; while Singapore today is democratic, I wonder whether a legacy of non-democracy could have instilled deference and resignation in the culture, which persists for awhile but gradually fades. It seems to me this occurred in the US post-FDR, where it took awhile for the media and the citizenry to question government authority, but once that ball got rolling it had some momentum.

Given sufficient ideological diversity within a single party, it seems that a one-party democracy will eventually trend towards a no-party democracy. However, it sounds like the consistency of Singapore's economic policies are evidence of a lack of ideological diversity within the dominant political party. Would the lack of intra-party diversity also be due to excessive deference to authority?

Kevin writes:

I think option 3 obtains not just in Singapore, but in many other nations as well. The USA's one-party system, for example.

The Student writes:

My guess would be a combination of three things

1. Inability to avoid those with whom you disagree. It's clear that in most societies, people segregate themselves into reasonably ideologically and culturally alike groups. In a country the size of Singapore, you can't just move into a city or state more hospitable to your views. For those who are racist, you can't just move thirty miles out of the city into the suburbs or exurbs. I think the inability to heavily segregate based on common characteristics/cultural identity/ideological identity forces the mix of views to come together and compromise more.
Look at the political map of the United States. It's clear that where one lives is very indicative of political views.

2. Continual Success. Why fix what is broken? A governing party that has gone through it's history as being both successful and not given to corruption or abuse of power tends to survive. The Democratic Party from the 1930s to the 1970s was a good example of this. Without major ethics scandals and a track record that was, until the stagflation of the 1970s, relatively unblemished, led to effective one party dominance of the national politics. Even with the interruptions of Eisenhower and Nixon, it was clear that neither was particularly conservative, in the modern sense of the word. Nixon was arguably the most Keynesian President we've ever had, and an enviornmentalist, while Eisenhower was sought out by both parties, reflecting his very moderate ideological status. The only way Republicans competed during this time period was by moving left.
That is, until Stagflation derailed the economy, greatly reducing the ability of Democrats to run on the "best for the Economy" platform.

3. Eastern political attitudes. Individualism as a trait is much less highly valued, and I think we see less of Singaporean's voting specifically in their own interest than we do in America. There exists a general consensus about what policies are good for the whole, and Singaporeans continually support these policies, even if they may hurt them individually, generally in the short run.

That's my hypothesis.

Methinks writes:

I think it has a lot to do with the small size of the country and the kind of immigrants their incentives attracts. For example, in the united states it takes a minimum of three months to cut through regulatory mess to start a company like mine. In Singapore, I could be up and running within two weeks. It's just very easy to do business there if you're willing to give up chewing gum.

It may also be cultural. I have a few friends from Singapore and they are unusually inclined to believe that they are responsible for themselves and must earn their own keep. This kind of thinking was once prevalent in the United States and is now as rare as dodo birds. Whatever the reason, I'm considering a move to Singapore.

Bill R writes:

Could this be a validation of the theory that as long as the economy is doing pretty well then people don't really care and stay with the status quo? http://www.centerforpolitics.org/crystalball/article.php?id=AIA2008061901

Perhaps the loyalty factor is enough to weather a 1 or 2 year recession without clamoring for a change in party or policy. This then allows the economy to correct and be on a more sustainable growth pattern and this in turn increases satisfaction with the party.

Also most Singaporeans I'd imagine have the savings to weather a short recession... so that could be a cultural factor that influences political economy. And I'd guess patience during the recession also correlates with the type of people that have high savings rates.

Even in this recession Singapore has an amazing 2.6% as of 12/08 http://www.singstat.gov.sg/

Now if it's 3 or 4 years...

Is it possible Singapore's people know a good thing when they see it? Voluntary exchange under rule of law that protects people from violence, fraud, and other forms of compulsion strikes me as just about as good and productive as it gets.

Bill R writes:

"Even in this recession Singapore has an amazing 2.6% as of 12/08 http://www.singstat.gov.sg/"

2.6% unemployment rate that is...

dearieme writes:

I vaguely remember someone comparing Singapore and Hong Kong about 15 years ago. Both were Chinese in culture, but one was run on authoritarian-democratic lines by Chinese, the other on laissez-faire colonial-government lines laid down by Scots. Both were prospering mightily. The idea was to find an explanation for the success of both.

scott clark writes:

What about the fact that in Singapore, many people over a certain age, the elderly, are largely illiterate? Didn't country really make a big jump in public education after the 1960's? So you don't need a government that transfers resources from the young to the old, 'cause the old stay passive and subserviant, or resigned to their lot, due to their lack of formal education, while the young don't have to agitate for any radical governmental reforms, since there is no need to rebel against the politics and policies of their parents.

Zac writes:

I like what commenter "The Student" said: "1. Inability to avoid those with whom you disagree." My experience is that people really can't stand to live around people who don't have the same views as they do, particularly on 'social' issues.

I wonder how much explanatory power this has for explaining the prevalence of single-party rule in urban politics. If it is a major factor, might we expect increasing population density to lead to more homogeneity of political preferences?

Lord writes:

Size and homogeneity is critical. There is really no significant difference of interests of its inhabitants. It also means there is little alternative to economic freedom since they cannot produce everything they want themselves. Besides Hong Kong, places like Brunei and some island states would be interesting to compare though many may be traditional rather than industrial, and autocratic rather than democratic.

Taimyoboi writes:

Mr. Caplan,

So when are you planning on moving to Singapore?

As an aside and with respect to immigration, I've heard a varied description. Singapore is actually very pro-immigration depending on where the immigrants come from.

David Jinkins writes:

Economists have to be really careful with the culture or preferences argument, as it can be invoked to explain any difference between two areas. Why do European countries have larger welfare states? Preferences\culture. Why do Americans save so little and Japanese so much? Preferences\culture. Why is British cooking so bland and French cooking so tasty? Je ne sais pas. You get the idea.

Furthermore, the culture argument is the end of the conversation. If Singaporeans are just culturally different, there isn't much we can do to make our political system work more like theirs, for instance.

On the other hand, sometimes the culture argument is correct, maybe in this case (or maybe Bryan has some insight about the Singaporean system affecting voters preferences--I haven't read the paper). It's just that because it is such an easy out, the culture argument should be invoked as sparingly as possible.

dcpi writes:

Singapore does hold elections, but I don't know if I would call them a democracy in the sense that we understand it.

Try running against the PAP. Try writing a story critical of the PAP. You will be lucky to walk away with two nickels to rub together.

Nathan Sharfi writes:

Quoth David Jinkins:

Furthermore, the culture argument is the end of the conversation. If Singaporeans are just culturally different, there isn't much we can do to make our political system work more like theirs, for instance.

A bit earlier, Methinks grabbed a fat marker and scrawled this:

I have a few friends from Singapore and they are unusually inclined to believe that they are responsible for themselves and must earn their own keep. This kind of thinking was once prevalent in the United States and is now as rare as dodo birds.

You could nudge American culture to be like Singaporean culture, at least on the self-reliance front. (I don't think the anti-individualist trait is necessarily worthy of emulation, at least at first blush.)

Lars writes:

Dear Brian:

When you say that characterizing Singapore as not a democracy is 'simply wrong' you referred to a report by Freedom House.

Was it this Freedom House report for Singapore, for 2008?

http://www.freedomhouse.org/template.cfm?page=363&year=2008&country=7486

In which Freedom House says, among other things:

"Singapore is not an electoral democracy. The country is governed through a parliamentary system and holds regular elections, but the ruling PAP dominates the political process, using a variety of methods to handicap opposition parties. The prime minister retains control over the Elections Department, and the country lacks a structurally independent election authority."

The same report also says this:

"Despite his expressed desire for a “more open society,” Lee Hsien Loong has done little to change the authoritarian political climate. He called elections in May 2006, a year early, to secure a mandate for his economic reform agenda. With a nine-day campaign period and defamation lawsuits hampering opposition candidates, the polls resembled past elections in serving more as a referendum on the prime minister’s popularity than as an actual contest for power. The PAP retained its 82 seats with 66 percent of the vote, although the opposition contested a greater number of seats and secured a larger percentage of the vote than in previous years."

It also says this:

"Singapore’s media market remains tightly constrained. All newspapers, radio stations, and television channels are owned by government-linked companies. Although editorials and news coverage generally support state policies, newspapers occasionally publish critical pieces. Self-censorship is common among journalists as a result of PAP pressure. The Sedition Act, in effect since British colonial rule, outlaws seditious speech, the distribution of seditious materials, and acts with “seditious tendency.” Media including videos, music, and books are sometimes censored, typically for sex, violence, or drug references. In April 2007, the government banned Martyn See’s documentary film about a political activist’s 17-year detention under the Internal Security Act (ISA)."

I could go on, but the full report from Freedom House is in the link above. Bit I sort of think their statement that "Singapore is not an electoral democracy" sort of contradicts your statement that it is. In other words, this source you site seems to says the exact opposite of what you seem to claim it says.

adina writes:

It could just be one of the quirks of history and probability.
The first organized party happened to consist of people who actually wanted to do good for the country. Thus, even if most of Singapore's citizens oppose the party's platform, the citizens may also see that their society is overall pretty good, and decide to vote for them anyway. In other words, why ruin a good thing?

Jayson Virissimo writes:

"Singapore does hold elections, but I don't know if I would call them a democracy in the sense that we understand it.

Try running against the PAP. Try writing a story critical of the PAP. You will be lucky to walk away with two nickels to rub together."-dcpi

Try running against a Democrat in San Francisco. Let me know how that works out for you. Oh wait...

Larry Peoples, Sr. writes:

Sounds to me like Singapore lives under the "If it aint broke - don't fix it" philosophy.

Carl The EconGuy writes:

Not knowing much about Singaporean political institutions, but believing in the basic precept of public choice that politicians and bureaucrats behave according to the same incentives as private citizens, I would ask whether there are institutional constraints in Singapore against the standard coalition building that destroys Pareto consistent economic policies in other polities. In Western democracies, we observe special interest groups forming voting blocs of willing polticians, and that creates persistent problems. What's keeping that from happening in Singapore? What's keeping the pols on the straight and narrow? They're no different from the rest of us, so it's likely to be something in the rules of the game in Singapore. How are elections financed? How are voting districts written? How is money to pols constrained? Singapore seems to have a very low level of corruption, generally speaking, and how have they kept their politics clean?

dearieme writes:

"Why is British cooking so bland and French cooking so tasty?" For one meal of the daily three it's the other way round.

dearieme writes:

Come to think of it, it's the other way round also for the last course of lunch and dinner.

Teresa Lo writes:

Explanation: Singapore is a small, homogeneous country similar to Japan, ideal for Confuscian "benevolent dictatorships" favored by the Chinese for most of its history.

sourcreamus writes:

One party rule is usually self perpetuating in that no one wants to be thought of as a loser so they identify with the party that always wins the elections. This usually leads to corruption, how has Singapore avoided widespread Chicago style corruption?

Methinks writes:

You could nudge American culture to be like Singaporean culture, at least on the self-reliance front. (I don't think the anti-individualist trait is necessarily worthy of emulation, at least at first blush.)

Singapore is relatively culturally diverse, so I don't know that there is the same strength of anti-individualist trait as a purely Chinese country or city would have.

Agreed on the Americans becoming self reliant. Allow me to scrawl with my big marker again:

Self-interest drives most to seek rents from government even as we scream for free markets and self-reliance. As Milton Friedman points out - everyone loves free markets, but it must be understood that theirs is a special case. How many times have you heard over the past 18 months "I'm the biggest free market guy you will meet, BUT...."?

I fear we are done for and I hope I am wrong because moving to yet another country would be a pain.

Phil writes:

Explanation: Singapore is a small, homogeneous country similar to Japan, ideal for Confuscian "benevolent dictatorships" favored by the Chinese for most of its history.

The falsity of the above is obvious to anyone who actually live here. But at least look up, say, the CIA World Fact Book:

Japan
Ethnic groups - Japanese 98.5%, Koreans 0.5%, Chinese 0.4%, other 0.6%
Religions - observe both Shinto and Buddhist 84%, other 16% (including Christian 0.7%)
Languages - Japanese

Singapore
Ethnic groups - Chinese 76.8%, Malay 13.9%, Indian 7.9%, other 1.4% (2000 census)
Religions - Buddhist 42.5%, Muslim 14.9%, Taoist 8.5%, Hindu 4%, Catholic 4.8%, other Christian 9.8%, other 0.7%, none 14.8% (2000 census)
Languages - Mandarin 35%, English 23%, Malay 14.1%, Hokkien 11.4%, Cantonese 5.7%, Teochew 4.9%, Tamil 3.2%, other Chinese dialects 1.8%, other 0.9% (2000 census)

happyjuggler0 writes:

From the wikipedia entry on Lee Kuan Yew:

In an interview with CCTV on June 12, 2005, Lee stressed the need to have a continuous renewal of talent in the country's leadership, saying:

"In a different world we need to find a niche for ourselves, little corners where in spite of our small size we can perform a role which will be useful to the world. To do that, you will need people at the top, decision-makers who have got foresight, good minds, who are open to ideas, who can seize opportunities like we did... My job really was to find my successors. I found them, they are there; their job is to find their successors. So there must be this continuous renewal of talented, dedicated, honest, able people who will do things not for themselves but for their people and for their country. If they can do that, they will carry on for another one generation and so it goes on. The moment that breaks, it's gone"

From this quote, and from what I've read about Singapore, I think it also says that perhaps there is a lot Singaporean respect for Lee, and that that is perhaps why they have kept his system in place.

He also believes in paying government officials a lot of money (really), which works to incentivize against corruption, and towards bringing in and retaining quality politians and technocrats who understand the nuts and bolts of productivity, better than their overseas counterparts anyway.

That, and the libel lawsuits against those who are critical of the PAP, making it difficult to foment opposition to the PAP.

Jeff writes:

I think there are valid doubts about whether the stimulus package will help. Of course, you can argue what will happen if there is no stimulus. But with this stimulus the federal deficit is likely to go even higher. I saw an interesting article, I think, on

http://www.recessioninfocenter.com

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