Lee Hsien Loong explains how market forces shape Singapore’s policies from housing to healthcare

Senior Minister (SM) Lee Hsien Loong has explained why Singapore often builds public policy around economic logic and market behaviour, from housing and healthcare to car ownership and financial support schemes.

In an essay titled Microeconomics in Public Policy: A Practitioner’s View, published in the Singapore Economic Review Journal on 31 March, Mr Lee outlined how microeconomic principles have influenced Singapore’s policymaking over the years.

He said that while governments often need to step in where free markets fall short, such as in housing, healthcare, and social support, Singapore has taken a more “market-oriented approach”.

“Ours is not a purist laissez-faire model, where the government does as little as possible,” he wrote.

Instead, “the Government actively intervenes in many areas to achieve public policy objectives”, but does so with economic principles in mind.

“We need to be [cognisant] of economic laws, market forces and incentives,” Mr Lee said. “This way we work with, rather than against, human nature.”

The better we understand these powerful forces and the more we use them in designing and implementing policies, the more effectively we will achieve our goals.

Public housing shaped by both intervention and market logic

Mr Lee pointed to public housing as one of the ...