Economic Liberalism and the Developmental State: Hong Kong and Singapore’s Post-war Development

by Bryan Cheang

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.

Genres: Economics

375 pages, Hardcover

Published November 11, 2022

Reviews

[Ibrahim Niftiyev · Rating 5 out of 5]

Bryan Cheang's "Economic Liberalism and the Developmental State: Hong Kong and Singapore’s Post-war Development" offers fascinatingly deep insights into the economies of Singapore and Hong Kong in a comparative and critical manner. It clearly shows how Singapore's comprehensive industrial policies led to the crowding out of small and medium enterprises, leaving large firms either state-owned or linked to the government. This led to a mix of state capitalism and large firm capitalism, high and inefficient government spending, and low innovation. Hong Kong, on the other hand, adopted a more "laissez faire" approach inherited from British colonial rule. Compared to Singapore, Hong Kong has a more competitive, innovative, efficient, and liberal society. Nevertheless, Hong Kong has also begun to imitate the Singaporean developmental state approach, slowly damaging the environment for rapid and quality economic growth and development. This also happened in China in the 1990s. Mr. Cheang argues that China's rapid economic growth in the 1980s was jeopardized by the application of centrally planned industrial policies. All this is not or cannot be reflected by aggregate statistics. Therefore, it is extremely important "to know more about less rather than less about more." This is a great book to learn more about recent development in both countries against the backdrop of economic liberalism and related issues. I enjoyed critically evaluating industrial policy and the concept of the developmental state. I would like to congratulate the author for this great work and great gift to economics.