Running a Country Like a Business

Singapore is worth talking about because it is very good at some things that most of the rest of us are very bad at. It's not good at everything. It has a reputation for being a bit boring, and for lacking some of the cultural attractions that a city of its standing in the world "should" have, but there's no room for differentiation there. It would be an unrealistic goal to hope to someday hear people saying, "Forget New York and Paris – you need to check out the art scene in Singapore." It can also be annoyingly difficult to get a cab in Singapore, which seems like the sort of thing they should be able to fix, but even if they did, it too would be unlikely to become a source of competitive advantage.

Instead, Singapore excels at things like education, cleanliness, efficiency, and crime prevention – a potent combination typically only seen together in overachieving, unnaturally orderly places like Scandinavia and Japan. Singapore's achievement is even more remarkable when you consider how cosmopolitan it is, its national identity that stretches back only to 1965, its four official languages and its large groups of immigrants from a wide variety of Asian cultures. It is exactly the kind of place that shouldn't work as well as it does. So why does it?

For one thing, Singapore is run like a business. How do businesses in competitive, high-stakes markets ensure they stay on top? They pay well for the best people. And indeed, Singapore pays its public-sector employees vastly better than most countries: the prime minister is paid $2.5 million per year, about six times what Barack Obama makes, and mid-level bureaucrats are likewise paid well relative to other countries. How can they afford this kind of largesse? For one thing, their public sector requires many fewer people to do the same amount of work, since they can take their pick of the most effective personnel. Unfortunately, public-sector inefficiency may be far too entrenched in most parts of the world to attempt such a transition, but the possibility is tempting.

Another point of differentiation is the demand for social order. Unlike, say, Japan or the UK, where orderly public behavior is a deep-seated cultural value, Singapore's residents come from some cultures, such as India and China, without an inherent appreciation for queuing: on the escalators in the city's shiny metro system, you can forget about any sort of stand-on-the-right, walk-on-the-left order. But Singapore uses a combination of workarounds and crackdowns to whip society into shape: rather than hoping to teach people not to spit their chewing gum on the sidewalk, Singapore simply outlaws the stuff altogether. And those escalators are so fast that you'll hardly mind being stuck behind a mass of standees.

This brings us to Singapore's darker side, which might politely be labeled a democracy deficiency. That's different from an absence of democracy altogether: the country has an elected parliament and universal suffrage – indeed, voting is required by law. However, since the People's Action Party has won every election since the country was founded, one might be forgiven for seeing the control of the city-state as rather centralized. The absence of jury trials and a particular fondness for the death penalty doesn't help the not-quite-democratic impressions, either.

Fortunately for Singapore, it has long been fashionable for messy Western democracies to gaze enviously on some of the more hard-fisted, and seemingly so much more effective, non-democratic governments elsewhere in the world. But most benevolent-ish totalitarian governments rule over relatively homogenous environments: in China, the overwhelming majority of Han Chinese are not typically the top-of-mind complainants when one wants to criticize the one-party government, but rather one thinks of the pluralistic fringes, like Tibet, Taiwan, and religious minorities. Singapore hardly fits the mold, and yet seems to function just fine. The real answer may lie in size: it's much easier to rule a small, compact population than it is to find consensus in a larger country.

In Singapore's competition with Hong Kong and, increasingly, Shanghai for the role of regional business hub, efficiency serves it well, as does better air quality, cleaner streets, and the very best airport and airline in a region full of excellent ones. Those cities take a more traditional route, with noise, lights, and excitement. Singapore may be a little dull, but you have to admit there aren't many places quite like it.