Institutional integrity
Institutional integrity is important for ensuring sustainable success large scale collective action organizations. Institutional corruption is the condition when dishonesty and abuse of power for personal gain becomes commonplace and tolerated. Preventative and corrective safeguards against corruption of rules-based institutions include transparency, 3rd party monitoring, checks and balances and decentralization of authority. Institutional integrity risks applies both to state and market agents. The role of democracy in maintaining government integrity is an area of debate for some countries. In Singapore the ruling party - People's Action Party (PAP) has attempted to define it's own novel concept of a strong and healthy government keeping some of the features of strong leadership but slow to incorporate the pillars of democracy into that measure of integrity.
In this section
Vulnerabilities in market and state agents
The risks of corruption apply to both public and private institutions. Systemic corruption within private institutions can lead to disruptive shock events such as the under-reporting of subprime portfolio risk by Lehman Brothers in the lead-up to the 2008 financial crisis. In his testimony to the US House on the causes of the financial crisis, Alan Greenspan cited the breakdown of counterparty supervision, the “central pillar of the financial markets” as his faith in the integrity of this pillar as the flaw of his ideology (Greenspan, 2008). Corruption in public institutions is one of the main concerns from the field of Public Choice (Shughart, 2020) and listed as one of the “dark side of inward oriented economy” by the World Bank Report (Birdsall, 2010). The IMF guide to policy makers for improving fiscal discipline include strengthening public fiscal institutions with spending rules, controls and decentralization of spending authority (IMF, 2014). These measures are among 30 others listed in The Legatum Prosperity Index for the Pillar “Governance”. The measures under the pillar are grouped into 6 Elements listed in Table B.4b - executive constraints, effectiveness, integrity, political accountability, regulatory quality and rule of law. The statistical analysis in Appendix B identified the average score of the 30 measures from the Governance pillar using even weights as statistically significant to the general success measure across all three stages of development - developing, emerging and advanced.
Mitigating the risks of abuse of power
The insights from conformity studies (Asch, 1952, Zimbardo, 1971) reveal the vulnerabilities of institutions to corruption by opportunistic agents. Lessons from the Stanford Prison Experiment identify anonymity and power differential between groups as a risk factor for abusive practices (Zimbardo, 1971). Transparency and supervision are two examples of preventative remedies to the risk factor of anonymity.
The safeguards of transparency are identified in Ostrom’s analysis of common pool resources (Ostrom, 1990). She explains that transparency and monitoring capabilities disincentivize defects and they provide a means for participants to continuously adapt their commitment based on their perceived trust in the overall level of defect rates (Ostrom, 1990). Transparency and mutual supervision were also features identified by George Akerlof to maintain market integrity and avoid the “market of lemons” condition characterized by mistrust and information asymmetry (Akerlof, 1970).
Transparency in common pool resources
Low cost supervision was identified by Elinor Ostrom as a critical determinant of the success or failure for collective action problems in her theoretical analysis of the basic Prisoner's Dilemma and case studies of common pool resources (CPR). (Ostrom, 1990). Hardin's original model of the commons was a a single game, completely open, simplified and pessimistic. He presumed that any herder could move his flock in and out of the commons anonymously (Hardin, 1968). Real world cases of common pool resources instead have a way of controlling access, rules for resource allocation, institutions for dispute resolution and heavy mutual supervision (Ostrom, 1990). Ostrom provides the theoretical explanation for why this monitoring is critical for sustaining the motive for cooperation. In the analysis of the factors in the payoff equations, supervision and enforcement promoting cooperation in multiple game strategy over the dominant single game strategy of defect by lowering the perceived rate of defect of other players (Ostrom, 1990).
The cumulative effect of transparency in all its forms helps to lower the perceived risk of defects and encourage cooperation as a strategy. Even when defect rates are non-zero the common knowledge of what the rate is helps participants to make an informed decision about their expected payoff from cooperation and also gives them the choice to propose an intervention to improve the defect rate. Key operational details on the management of the resources are shared with all participants - defect rates, current stock levels, appropriation flows of the resource to the outcomes of conflict resolutions (Ostrom, 1990). She describes how the monitoring processes work in each of the case studies, including the Spanish "huertas" irrigation system.
The level of monitoring that is used in the huertas is very high. In this environment of water scarcity and risk, many temptations occur to take water out of turn, or in some way obtain illegal water. As the time approaches for a farmer to take his turn at the water, he will tend his fields near to the canal so that he can be prepared to open his own gate when the water arrives; if not prepared, he misses his turn entirely and must wait for the next round. While waiting, it is relatively easy to watch what those ahead of him are doing and watch the ditch-riders, whom he is paying. The ditch-riders patrol the canals regularly and arc watched over by the syndic [huerta authority], who can lose respect, and his job, if the allocation of water is not handled fairly and according to the farmers' rules. - Elinor Ostrom, describing the monitoring system of the Spanish huertas irrigation system, 1990 Governing the Commons
Democratic pluralism and Government integrity
While Singapore may rank high on measures of rule of law and efficiency of government processes, it scores low on measures of political pluralism, checks and balances and limits on executive power (Legatum Institute, 2019). Singapore also scores low in measures of political freedoms of individuals such as freedom of assembly and freedom of the press by Reporters without Borders and the Social Progress Institute (Social Progress Institute ; Reporters without Borders). The scoring of government integrity used by the Legatum Prosperity Index define the concept of Government integrity to include both the executive capabilities to carry out and enforce law, and also the process integrity safeguards of checks and balances, limits on executive privilege and democratic pluralism (Legatum Institute, 2019). Apparently the Legatum Institute believe these qualities to be instrumental to sustaining the system in the long run. At times the message from prominent members of the Singapore PAP have seemed implicit or explicit terms to contest the inclusion of democratic features of government - political pluralism, transparency and independence between branches of government and the media - as a universal measure of what it means to be a healthy functioning government (Martin Jones, 1994).
The personal example of the historical leader and founder of the party Lee Kuan Yew and echoed by others in the party legacy have promoted ideals of good leadership which are consistent with many features of strong government integrity - selfless, virtuous, restrained, competent, concerned primarily for the well-being of the electorate above personal ambition and willing to take unpopular decisions for the best long term interest of the public. However Lee Kuan Yew and the PAP in general have in various forms through their history challenged the idea of whether the basic democratic institutions in Government are necessary for maintaining political legitimacy and executive competency in the long run (Hussin Mutalib, 2000).
With few exceptions, democracy has not brought good government to new developing countries ... What is good government? This depends on the values of the people. What Asians value may not necessarily be what Americans or Europeans value. Westerners value the freedoms and liberties of the individual. As an Asian of Chinese cultural background, my values are for a government which is honest, effective and efficient in protecting its people and allowing opportunities for all to advance themselves in a stable and orderly society where they can live a good life and raise their children to do better than themselves. - Lee Kuan Yew, 'Democracy, human rights and the realities' delivered at the conference 'Asahi Forum', Tokyo, 10 November 1992. Source (Hussin Mutalib, 2000)
Members of the ruling PAP party are relatively open about their strategic efforts to prevent a strong opposition party using a variety of justifications which have evolved over the years (Martin Jones, 1994). As an example of how they have applied this in practice is the use of defamation cases in the courts raised by the PAP on BJ Jeyaretnam, an outspoken critic and of one of the early leaders of the opposition party - Worker's Party in the 1970's and 1980's (Hussin Mutalib, 2000).
In a 2000 report on opposition politics in Singapore by National University of Singapore Political Science professor - Hussin Mutalib, "illiberal democracy and the future of opposition in Singapore", identifies three mechanisms that the state sustains a single-party system and limits the potential for an independent opposition challenger.
Regulation of all key institutions of the state apparatus such as the bureaucracy, grassroots organisations, trade unions and mass media, and co-opting leaders to oversee these institutions
Periodic changes to the Constitution which radically transform the Republic's electoral and parliamentary systems, such as the introduction of the NCMPS, NMPS, EP and GRCs [electoral constituencies in Singapore]
Punitive actions against opposition and public dissent in general which has resulted in the perceived 'climate of fear' that haunts the citizenry and the concomitant 'subject' political culture in Singapore. - Hussin Mutalib, 2000 illiberal democracy and the future of opposition in Singapore
The situation is dynamic however, as public statements by the PAP after losing 2 GRCs in the 2020 election may signal a willingness to embrace a more pluralistic model of democracy than in the past. On 2 Sep, 2020, in a live televised Parliamentary speech, Prime Minister Lee Hsien Loong cautiously welcomed more opposition voices in Parliament, but warned to keep the dialogue constructive towards common objectives and be vigilant to avoid divulging into a poliarized political stalemate.
"Having an adequate number of opposition MPs in Parliament is good for Singapore as this keeps the Government on its toes and shows Singaporeans that it has nothing to hide... ... How do we make sure that disagreement does not result in paralysis?" This has happened in many other countries, where politics permeates every issue and every subject becomes partisan - even public health issues like whether to wear a mask or not. This is my side, and that is yours. There is no middle ground, only sides to take. There are no truths or facts, only different versions of reality - facts and, of equal standing, 'alternative facts', [...] Politics becomes toxic and bitter. The country is divided, and goes into a downward spiral. If this happens to Singapore, we will not just cease being an exceptional nation. It will be the end of us. We must not go down this path. For Singapore's politics to work, the Government and opposition must share the overriding objective of working for Singapore, and not just for their party or supporters - Prime Minister Lee Hsien Loong, 2 Sep, 2020
The integrity of the system and accountability of the ruling PAP party is one of the concerns which could be weighing on Singaporean minds. This sentiment was captured in a popular quote by one of the new figures of the opposition, Janus Lim, in a televised debate prior to the election.
What we are trying to deny the PAP is not a mandate, what we are trying to deny the PAP is a blank cheque - Janus Lim, 1 July 2020
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