This book provides a fresh perspective on the debate over the role of the state in East Asia’s development history. Comparing the post-war development policies of Singapore and Hong Kong, it argues that their strong economic performances preceded and persisted despite, not because of, developmental state policies. While both nations are not pure free markets, the Hong Kong economy comes closer to that ideal and exhibited clear advantages over state-driven Singapore, in terms of greater levels of indigenous entrepreneurship, productivity and innovation.
The book highlights the complex ways in which states penetrate markets, which are often neglected in liberal accounts of Hong Kong and Singapore as ‘free-market success stories’. At the same time, it also stands as a cautionary tale on the use of non-comprehensive development planning in the twenty-first century, where an unprecedented degree of complexity complicates economic policy and industrial upgrading. The book renews the case for economic liberalism in development policy through a unique Asian cultural lens.
Author(s): Bryan Cheang
Publisher: Palgrave Macmillan
Year: 2022
Language: English
Pages: 364
City: Cham
Preface
Contents
Abbreviations and Acronyms
List of Figures
List of Tables
Chapter 1: Developmental State and Economic Liberalism
Challenging the Developmental State
So What?
What Is the Developmental State in the First Place?
Transcending Economic Statistics
Knowing More About Less
Empirical Richness and the Use of Facts
Structure of the Book
Part 1: Getting the Facts Right
The Neoliberal Portrayal
The Institutional Divergence
Part 2: Evaluating Economic Performance
The Paradox of Success
References
Chapter 2: Economic Freedom, Institutional Arrangements, and Local Context
Economic Liberalism
What Economic Freedom Indices Say
What East Asian Scholars Tell Us
Culture of Economic Freedom
Complexity and Institutional Details on the Ground
Factor Markets
State Monopolisation of Land
Singapore
Hong Kong
Impact on Cost
Manpower and Capital
Capital
Manpower
Manpower Planning
Government Scholarships
Comparative Analysis of Public Sector Institutions
Peculiar Institutional Arrangement of Singapore’s Developmental State
Omission of Statutory Boards
Correcting the Omission
Significance of the Omission
Conclusion
References
Chapter 3: State Capitalism vs. Entrepreneurial Capitalism
Competition in Market Economies
Path Dependence and the Pattern of Market Competition
Policy Choices Made in the 1960s Had a Path-Dependent Effect
Singapore
Hong Kong
Policy Orientation of State Elites in Hong Kong and Singapore in the Post-WWII Period
Big Firms in Hong Kong vs. Big State Entities in Singapore
Extensive State Presence in the Singaporean Private Sector
Sovereign Wealth Funds in Singapore
GLCs and GLREITs in Singapore
Strategic Position of GLCs and GLREITs in Singapore
State-Owned Companies in Hong Kong
Market Concentration in HK Real Estate
Government Land Policy as a Root Cause
Government Fiscal Dependence on Land Sales
Government Business Alliance
Industrial Policy and Crowding Out
Comparative Contributions of Small-Medium Enterprises in Hong Kong and Singapore
Singapore
Hong Kong
What About the Concern of Big Firm Domination in Hong Kong?
Conclusion
References
Chapter 4: Development Requires Freedom
Freedom and Development
Bringing Politics In
Hong Kong’s Liberal Governance Contrasted with Singapore’s Authoritarian Developmental State
State-Society Relations in Singapore
Developmental State Model Entails Some Authoritarianism
The Centrality of the Ideology of Technocracy
Ideological Control in Singapore
From Arm’s Length to Antagonistic State-Society Relations in Hong Kong
Administrative States
Contrasting Logics of the Developmental vs. Colonial State
Importance of Being Connected to the State, According to Social Perceptions
Comparative State of Political Culture and Civil Society
Comparison of Think Tanks
Survey Results
Conclusion
References
Chapter 5: Hong Kong and Singapore as an Anglo-Chinese Success Story
Colonialism or Developmental State?
Revisionists
State-Centric History
Both Perspectives Are Incomplete
Of Course, Colonialists Pursued Their Self-Interest, But That’s Not the Point
Institutional “Tabula Rasa”
Singapore
British Trade Interests in the Malay Peninsula
Even though the British had Trade Interests, the “man on the spot”, Stamford Raffles, Played a Critical Role
What is the Legacy of the Institutions Implemented by Stamford Raffles?
Hong Kong
British Economic Interests in India-China Trade
Just like Singapore, it Was the Colonial Men on the Spot who Acquired Hong Kong
Hong Kong’s Constitutional Structure and Policy Orientation were Geared towards Commerce
After the Arrival of the British, Trade and Population Exploded
Singapore’s Post-War Growth Started from a High Base
Even though British Colonialism had a Positive Impact, my Account is Not Purely “elite history”, but Steers a Middle Course
British and Chinese as Joint Partners
Convergence of Interests and Values
Economic Dominance of the Chinese
Tan Kah Kee and his Industrial Legacy
Presence of a Domestic Industrial Class
Conclusion
References
Chapter 6: Reassessing Relative Economic Performance
Beyond National Income
Government-Led GDP vs. Private Sector-Led GDP
Catch-Up vs. Cutting-Edge Growth
Total Factor Productivity
Comparison of TFP between Countries
Up Until 1990
Till the Present Day
Labour Productivity
“High-Quality” Economic Growth
Innovation
Government-driven vs. Private Sector-led R&D Efforts
Indigenous Innovation Capacity
Innovation Efficiency
Cultural Disposition Towards Disruptive Innovation
Entrepreneurial Culture
Looking Beyond Conventional Income Statistics
References
Chapter 7: State and the Creative Class
High-Quality Economic Growth and the Creative Class
An Innovative Economy Is One with Strong Creative Industries
Freedom, Public Policy and Creative Industries
Restrictive Stance Towards Arts and Media in Singapore
Political Censorship
Clampdowns on Socially Sensitive Content
Direct Censorship
Censoring the Arts
Censoring the Media
Indirect Censorship
Withholding State Aid
Self-censorship
Light Touch Approach in Hong Kong
Lack of Industrial Policy Targeting the Creative Industries
Creative Freedoms Tolerated in Hong Kong
External Pressure from Mainland China
What Is the Overall Impact on the Performance of the Arts in Both City-States?
Comparative Quantitative Analysis
Merging the Definitions
Comparative Employment Statistics of Creative Sectors
Economic Contribution of Creative Sectors
Creative Industries Trade Performance
Quantity and Quality of Creative Goods
Comparative Qualitative Analysis
Survey Results
Interviews Conducted
Censorship is a Problem in Singapore
Political Uncertainty and High Costs are a Problem in Hong Kong
References
Chapter 8: Conclusion: Reconsidering Developmental State Exceptionalism
Economic Performance Reassessed
Theorising the Limits of the Developmental State
Is Economic Growth Sustainable?
Getting the Story Right
References
Methodological Appendix
Survey and Sampling Methodology
Interviews and Focus Groups
Messiness and Data Collection Limitations
This Book Is an Exercise in Triangulation
Appendix 1: Statistics on Export and Import Volume in Straits Settlements and Hong Kong from 1868 Onwards12
Appendix 2: Measurement of Economic Freedom by Fraser Institute
Appendix 3: Compilation of New Dataset for Revenue and Expenditures of Singapore Statutory Boards Since 1994
Appendix 4: New Dataset on Singapore’s Government Expenditure/Consumption (Including Statutory Boards Previously Omitted)
Appendix 5: List of Tier 1 and Tier 2 Government-Linked Corporations, as of August 2020
Appendix 6: List of Government-Linked Real Estate Investment Trusts (GLREITs), as of 2019
Index
