Two Paradoxes of Singaporean Political Economy
By Bryan Caplan
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?
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?