The East Asian miracle: Economic growth and public policy: By the World Bank. (New York: Oxford University Press for the World Bank, 1993. 389 pp. $19.95, paper.)

This paper uses a case study of Hong Kong and Singapore, two of the fastest growing economies in the postwar world, to evaluate competing theories of economic growth. Although broadly similar in historical background and economic structure, the two economies are strikingly different along three dimensions of interest to growth theorists: (1) Hong Kong began the postwar era with a considerably better educated labor force; (2) the subsequent accumulation of human and physical capital in Singapore far exceeds that in Hong Kong; and (3) Singapore has experienced considerably more rapid structural change, as government targeting policies have propelled the economy into technologically advanced sectors. A total factor productivity growth analysis of the two economies reveals that while TFP growth in Hong Kong accounts for over two-thirds of the increase in GDP per capita during the 1970s and 1980s, total factor productivity growth in Singapore during the same period is next to nil. These results constitute stro...

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A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore

The East Asian Miracle--Economic Growth and Public Policy/World Bank(1993)

The developmental state, government, and Singapore's economic development since 1960

Since the early 1980s, developing countries have generally welcomed FDI, recognizing its manifold benefits, such as provision of capital, transfer of technology, etc. An extensive literature has evolved on FDI that identifies a number of variables, such as market size, trade openness, etc, as its key determinants. Domestic investment climate as a determinant of FDI has been excluded from the literature as reliable data on investment climate are generally unavailable. This study seeks to fill that void by using the economic freedom index, published since 1995 by The Heritage Foundation/Wall Street Journal, as a proxy for domestic investment climate for a sample of seven East Asian countries over the 1995–2000 period. Employing panel regression methodologies, this study finds that economic freedom is a significant and robust determinant of FDI. These results further our knowledge of the FDI dynamics in East Asia, which should be helpful in devising strategies to attract more FDI into that region.

Economic Freedom and Foreign Direct Investment in East Asia

Policy Options for the Singapore Economy

This paper looks at how government intervention shapes the evolution of the Singapore economy and accounts for its successes and failures over the past 50 years. Compared with other dynamic Asian economies, the Singapore government's approach to intervene in the economy is both more extensive and more intrusive, but with a narrow focus on GDP growth and surplus accumulation as the primary objectives. The ruling government's near complete dominance in politics has enabled it to mobilize resources to create the preconditions for strong GDP growth and high savings. But the impact on the broader development of the economy and the long term sustainability of growth is less obvious. High GDP growth and strong savings have been achieved without developing the inherent production and indigenous innovation capacity, securing a larger hinterland and providing a less skewed income distribution and higher quality of life for residents. As the economy enters a new phase where more complex and multi-faceted development...

https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2876&context=soe_research

The role of the state in Singapore: Pragmatism in pursuit of growth

This paper looks at Singapore’s efforts to transform the economic growth base from one that is predominantly efficiency driven to one that is more innovation driven. To accelerate the transition process, the government is aggressively investing in “innovation infrastructure” systems and institutions that make the city a more conducive environment for innovations. The modus operandi, with a distinctive “winner-picking” flavor, mirrors that of its earlier strategic industrial policy in building up the manufacturing sector. It is also in sync with the new urban growth literature, which argues that the success of any innovation-driven growth strategy depends on a city’s ability to attract a large community of creative individuals in different fields. Innovation infrastructure building requires more than putting in the right systems. It also requires a mindset change at various levels of society. This paper looks at how the government’s policy, philosophy and practices have evolved over time, and discusses the effectiveness of the government-led, strategic supply-push approach in propelling Singapore onto an innovation driven growth path. It takes into consideration the city-state’s underlying comparative advantages (or disadvantages) and asks how Singapore’s existing strength in efficiency infrastructure may give it a first mover advantage in attracting creative talents, how its success may be affected by the small size of the economy, and the various political and social constraints that a small sovereign city-state faces. These issues are explored against the backdrop of the keen competition among the major cities in the region to become an innovation hub.

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From efficiency-driven to innovation-driven economic growth : perspectives from Singapore

This paper surveys methodological issues in subnational credit ratings and highlights key challenges for developing countries. Subnational borrowing from capital markets has been on the rise owing to fiscal decentralization and demand for infrastructure investments. A prerequisite for accessing capital markets, subnational credit ratings have also emerged as a part of broader reform for fiscal sustainability. They facilitate a more transparent budgetary and financial management system. The global financial crisis makes subnational credit ratings more relevant, as they contribute to fiscal risk evaluations and fiscal adjustment. In addition to subnationals own credit strength, the creditworthiness of the sovereign and the intergovernmental fiscal system are among the most critical rating criteria. Implicit and contingent liabilities are integral to the rating process. Indirect debt instruments including off-balance-sheet financing create fiscal risks. The ongoing financial crisis has reinforced the rating focus on the management of liquidity, debt structure, and off-balance-sheet liabilities.

Subnational credit ratings : a comparative review

Without intending to do so, China has in recent years played a major role in East Asia’s economic integration. It has done so mainly through the production and supply chain networks it has spun across the region. This paper argues that given the developmental trends in the Chinese economy, the Chinese government should pursue a more active strategy towards a broader and more balanced economic integration with the region. The emergence of a multi-track production structure, increased importance of domestic consumption and the services sector, together with faster integration of the domestic economy, will fundamentally change China’s trade and investment relationships with the rest of East Asia and necessitate a review of China’s economic integration strategy. The paper also argues that ASEAN can play a useful role in facilitating the region-wide integration process.

https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2203&context=soe_research

Kim Song Tan

Papers

Policy Options for the Singapore Economy

The role of the state in Singapore: Pragmatism in pursuit of growth

From efficiency-driven to innovation-driven economic growth : perspectives from Singapore

Subnational credit ratings : a comparative review

China's Changing Economic Structure and Implications for Regional Patterns of Trade, Production and Integration