Thinking Like Lee Kuan Yew

This is Lee Kuan Yew’s miracle everybody’s talking about today:

Data from Maddison
Data: Maddison

The rising green line includes better healthcare, education, security, housing, and other benefits of economic growth. A distinctive feature of Singapore—compared to virtually all developed countries—it hasn’t closed its borders after becoming rich:

Data: WDI
Data: WDI

Which shows how good institutions adapt immigrants and the country continues to grow in per-capita terms. “They’re stealing our jobs” and other forms of intellectual racism never look for the examples like this.

How much did Lee contribute to this success? Scarce evidences on personal contributions to economic growth (like Jones and Olken, “Do Leaders Matter?” [ungated working paper]) leave some space to leaders to affect history. But in specific cases, impact evaluation is informal. In this case, endorsements are also overwhelmingly positive—for the last thirty years or so. Then how did he do it?

Lee shares his executive experience in his well-known book From Third World to First. Perhaps, it’s a bad guide to development because readers may screen it for confirmatory evidences that reenforce their own opinions about economic policies. But the book has two valuable qualities that rarely coincide. First, it’s written by a top politician. Second, it’s written by someone who thinks hard.

In the book, Lee explains his decisions and their reasonable foundations. Why is his reasoning important for others? Because economic development is all about context. When a policy maker copies a decision without reasoning, for a start, he doesn’t understand the decision. Then he applies it to a wrong situation. Industrial policies in developing countries are full of this misunderstanding.

A politician rarely explains himself, and when he does, he is torn between embarrassment and empty words. In contrast, Lee has the point and refutable defense. His colleagues also recall that he’s okay to change his opinion. It seems trivial with all sophisticated economic research on topic; but when leaders lack these qualities, it’s irrelevant how much we know about development (or anything else, for that matter).

So, unlike most commentators of the day, I’d pay tribute not to what Lee Kuan Yew has done but how he thought about these things. The book is a good source to learn it.

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