Friday, February 19, 2016

Policy Making: Need skin in the game

Form a high level committee with many subcommittees reporting to it. Collect feedback and then come up with strategies. We have used this approach for as long as I can remember. LKY SPP Adrian Kuah pointed out that such an approach may no longer be as effective as before. I tend to agree with him but not his idealistic approach of getting the ground to surface solutions. To me the crowd doesn't even have a radar to see over the horizon. This is not the wisdom of the crowd problem which you ask them to guess how many marbles there are in a glass bottle.

This article had helped me focus my thought toward one conclusion. This government will not change its approach without learning that it doesn't work the hard way. In other words the hardship would be on the people. I think structurally it is vital that policy makers must have skin in the game. They must suffer the pain of failure sooner than us otherwise we would all learn lessons the painful way.

Update: 11am

These property developers used not to have skin in the game. Like the government they could play heads they win, tails we lose. Not any more since Khaw as previous MND minister subject them to market discipline.

Now they are crying for help and asking for assistance. Their leverage as usual is to play the "too big to fail" game with the authorities if they could. In this way they could get what they want, a real moral hazard for us. Egregiously the PAP also play the same game with us as well. That is why they are falling short on accountability.


  1. Every time I read intellectuals in Singapore making such arguments,I would cringe and be very skeptical. Adrian Kuah is basically making a ultra-liberal economics school-of-thought argument.His good friend Donald Low makes a lot of arguments of such nature as well (Chee Soon Juan is another one). But I feel it they are just making a ideological argument (similar to lot of other mainstream intellectuals in this world are doing), rather than an argument which is effective.

    For them, economic growth is something which happens predominantly due to the people's entrepreneurial spirit and freedom. Any top-down attempts by the govt to do planning will be disastrous. Therefore, govt planning, activism, or intervention are all dirty word in their vocabulary. This ultra-liberal economic type of argument is very prominent in the USA and is arguably the mainstream view. However, whether it is an effective argument is not clear. Hence, this ultra-liberal economics argument may simply be an ideological argument which is not effective for economic management. Of course, all economic management styles (including those who support more govt activism) can be traced to an ideology. But it is different case when the argument they support is only ideological in which that they make no attempt to prove that what they say works.

    In the past few years, more and more intellectuals in the USA has started coming out to speak against these type of ultra-liberal economics argument. Even Joseph Stiglitz has criticized it as well calling for the USA govt to start planning more, and there are other paths to economic growth other than the liberal economics path. And he is telling liberal economist not to ignore that the USA current economic might was built on meticulous govt planning in the past. So actually, the economic planning which Singapore is doing now is unconventional when compared to the rest of the world. In other words, our govt has not been following blindly what the mainstream economics has been teaching them (South Korea and maybe Sweden are also countries who are not following the ultra-liberal economics teaching). So if the planners in these countries feel what they do is correct, they should have the courage to stand against these ultra-liberal economics arguments and have confidence in the planning which they are doing. At the end of the day, it is the results which matter.

    Even I as a student only have started to question these liberal intellectuals and the argument they make. For instance, Adrian Kuah is correct to say that a well-functioning economy is a sum of its parts. But without a strong supra-societal organization at the top doing the coordination work, how can the parts become a sum?

    1. Thanks for your comment. If you are an undegrad that is quite impressive.

      People with skin the game typically ingore those who don't. That is why policy makers aren't responding. Those who do not need to bear the consequences of their advice they are impossible to argue with anyway. Their ideology has the same possessive power as religion. They can only learn the hard way and in our case from watching their ultra liberal ideas get discredited over time elsewhere.