Munich Personal RePEc Archive

Governance, leadership and economic growth in Singapore

Venu Menon, Sudha (2007): Governance, leadership and economic growth in Singapore.

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Abstract

Although Singapore inherited the same British model of governance as other Commonwealth states, its governing system has become widely known for efficiency and competence, especially in terms of its role in generating an “economic miracle.” Economic growth has remained consistently high—at an average annual rate of 9.8 percent in the 1970s and 8.2 percent in the 1980s. Between 1988 and 1997, its Gross Domestic Product or GDP increased more than 2.5 times; between 1993 and 1997, it continued to rank very high in terms of its business-friendly environment; and by 1994, its per capita GDP (US$20,000) surpassed that of Australia, Canada, and the UK. These state-led economic achievements make Singapore a good case for studying contemporary reforms in governance based on the principle of the rolling back of the state’s economic management. While most countries have adopted the above mentioned business oriented governance reforms due to the alleged inefficiency and mismanagement of the public sector, the Singapore government has introduced such reforms despite its efficient and well-managed public sector. Moreover, although many developing countries with heavy external debt have adopted privatization and deregulation, liberalized trade and investment, and restructured their state bureaucracy according to the principles of the “New Public Management” (NPM), often in response to conditions imposed by international aid agencies, Singapore is virtually free from external debt and thus free from such direct external pressure to adopt these reforms.Against this context this article tries to explain the role of governance and leadership in administration which fostered economic growth in Singapore. Singapore governance system has been consistently rated by Transparency International as one of the most politically transparent and least corrupt governments in the world, but is also often being criticized for excessive interference in social issues.The article highlights how rapid socio economic transformation and quality of life was made possible through the ruling political party’s [PAP] brave attempt to liberalize the economy and attract foreign capital through various measures. The pervasive role of government is visible in all aspects of economic life in Singapore making it classic example of the direct relationship between transparency and economic development.

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