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DYNAMIC GOVERNANCE Embedding Culture, Capabilities and Change in Singapore This page intentionally left blank DYNAMICDYNAMIC GOVERNANCE Embedding Culture, Capabilities and Change in Singapore Boon Siong NEO Lee Kuan Yew School of Public Policy National University of Singapore, Singapore Geraldine CHEN Nanyang Business School Nanyang Technological University, Singapore World Scientific N E W J E R S E Y • LONDON • SINGAPORE • BEIJING • SHANGHAI • H O N G K O N G • TAIPEI • CHENNAI Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE Library of Congress Cataloging-in-Publication Data Neo, Boon Siong. Dynamic governance : embedding culture, capabilities and change in Singapore / by Neo Boon Siong & Geraldine Chen. p. cm. Includes bibliographical references and index. ISBN 978-981-270-694-2 (alk. paper) 1. Public administration--Singapore. 2. Political culture--Singapore. I. Chen, Geraldine. II. Title. JQ1063.A58N46 2007 351.5957--dc22 2007013740 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. First published July 2007 Reprinted August 2007 Copyright © 2007 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. Printed in Singapore. Sandhya - DynamicGovernance.pmd 1 8/29/2007, 3:46 PM Contents vii ♦ Foreword ix ♦ Preface xiii ♦ Acknowledgments xvii ♦ About the Authors xix ♦ List of Cases 1 ♦ Framework for Dynamic Governance: 1 Institutionalizing Culture, Capabilities and Change 49 ♦ Conceptual Foundations: Governance, Institutions 2 and Capabilities 85 ♦ Context for Development: Establishing Imperatives 3 for Governance 145 ♦ Cultural Foundations: Inculcating Principles of 4 Governance 189 ♦ Policy Execution: Developing and Implementing 5 Paths 243 ♦ Policy Adaptation: Embedding Learning and 6 Adjusting Paths v contents.indd 5 6/14/2007 12:08:23 PM vi Contents 317 ♦ People Development: Recruiting, Renewing and 7 Retaining Leaders 383 ♦ Process Innovation: Creating Agile Structures 8 and Systems 433 ♦ Sustaining Dynamic Governance: Lessons and 9 Challenges 479 ♦ Names Index 481 ♦ Subject Index 503 ♦ Glossary of Acronyms contents.indd 6 6/14/2007 12:08:23 PM Foreword What makes government effective? This is among the most important questions facing any society, because the failure of government is all too common and often catastrophic. There are numerous examples of countries that have been saddled by bad government policies, poor implementation, ethical failures, and the inability of government to change when necessary. The victims are citizens, whose lives and livelihoods suffer. In analyzing the effectiveness of government, the tendency is to focus on the many policy choices that any government has to make. Government sets policy in a multitude of areas, ranging from macroeconomics to education to health to personal security. Each of these areas has been extensively studied. In each area, there are best practices that have emerged from theory and comparisons across countries, about which there is often wide consensus. Since so many actual policy choices diverge from best practice, this provides a comfortable explanation for government success and failure. There are several problems with this line of thinking. First, government faces too many policy priorities to realistically address, and too few resources to make progress against all of them simultaneously. Consider the area of economic policy, where there are hundreds of local circumstances that affect competitiveness and the rate of economic development ranging from the condition of the roads, to the quality of the universities, to the efficiency of permitting. No government can ever tackle everything that needs to be improved at once. Instead, the challenge is to set good priorities, tackle issues in a sensible sequence, and sustain implementation over time. Second, the appropriate government policies and priorities shift as a country itself changes. In economic development, physical infrastructure and rule of law are key priorities in early stage vii film.indb 7 6/8/2007 2:06:30 PM viii Foreword development. Later on, many new challenges emerge in order to sustain a higher standard of living. Third, the world outside the country changes. New opportunities emerge, neighboring countries improve or decline, international legal structures and institutions realign, and so on. These external changes mean that the appropriate government policy choices change, priorities shift, and standards for performance usually rise. These complexities shatter any notion that good government is a static concept, and that government success depends on any individual decision. Instead, the essential challenges of government are dynamic, cut across many decisions, involve the need for continuous learning, and rest on effective and rapid implementation. This book, Dynamic Governance, addresses these subtler and now decisive challenges of government. The book provides a revealing framework for thinking about how government is able to make good decisions, carry them out, and revise them without a crisis. Singapore provides a marvelous case study with which to examine these questions. When it comes to government, Singapore often seems to defy the law of gravity. It has government organizations that are highly efficient. Decisions in Singapore usually get made on the merits, not because of corruption, ideology, or self aggrandizement. Government ministries are intensely self critical. Singapore changes its mind on highly charged questions, such as whether to legalize gambling. How does this happen? All of it requires a set of government institutions that, to use Neo and Chen’s framework, can think ahead, think again, and think across. This book offers a rich and interesting portrait of how this occurs, and the underlying causes. The lessons in Dynamic Governance apply to governments anywhere. Applying the ideas in this book gives us reason to be hopeful that governments in many countries can work, and that citizens’ lives can get better. Professor Michael E. Porter Harvard Business School 7 May 2007 film.indb 8 6/8/2007 2:06:31 PM Preface “Why do you want to write a book on the civil service?” We were asked this question at the start of practically every interview that we did for this book. Our curiosity was initially piqued by the typical response from business managers in the classroom to case studies that one of us had done on Singapore institutions such as TradeNet, the port, the national library, the national computerization effort and even the tax department — amazement that government agencies were capable of more than just being efficient — that innovation was possible and that organizational transformation actually took place in public agencies. There was a sense that the Singapore experience could have lessons for the business world. Its experience certainly appears to have learning value for other countries, if interest in Singapore-style industrial parks, housing estates and e-government systems is anything to go by. But what exactly is this “Singapore model” that business managers and overseas officials seemed so keen to understand and apply? Many observers attribute Singapore’s success to the strength of its political leadership. But there is an entire administrative body working quietly behind the scenes to create, develop, review and translate policies from perception to paper to practice. What is it about the way it manages its people and processes that others find interesting to understand and worthy to emulate? What are the principles behind the Singapore public sector system that made it work? Is the system good because it has perfected a set of “how-to’s”, or is there something more? Are these principles and practices unique to Singapore? How can the principles and practices be applied effectively beyond the public sector and beyond Singapore? These ideas intrigued us but we did not seriously start developing them until 2005, after both of us completed our terms as Dean and Vice Dean in the Nanyang Business School at the Nanyang Technological ix film.indb 9 6/8/2007 2:06:31 PM x Preface University. A chance conversation along the corridors as we were basking in our newfound peace and freedom reignited interest and focused thinking. An email to Peter Ho, the Head of the Singapore Civil Service and Lim Siong Guan, former Head of the Civil Service and then the Permanent Secretary of the Ministry of Finance with a go-ahead given two days later, set things in motion. As we began sifting through the published material, it struck us that much of the work on Singapore focused either on its policies, or on its political landscape. Other than a handful of studies of specific institutions such as the Economic Development Board, the Port of Singapore and the National Library Board, remarkably little is known about an institution that has been the vanguard of Singapore’s economic and social transformation. As we conducted our interviews and combed through internal data and documents, a picture slowly emerged of the civil service’s role in governance and the workings of its underlying system of institutional culture and organizational capabilities. We did not find simple explanations for the effectiveness of Singapore’s public service. Its performance cannot be directly attributed to any single individual leader or any one particular cause or policy. Instead we found a working system with multiple interactions and interdependencies. Its unique historical and political contexts were important but so were the ambition and active efforts to create and secure its future.