Redistribution through Regulation: The Unorthodox Case of Social Policy in Singapore

Social Policy in Singapore presents a unique puzzle. It is one of the few high-income economies (per-capita income US$50,000) where the state does not play a strong role in public financing of its healthcare or pension programs. Indeed, there is no public pension program organized on social insurance principles and most healthcare is paid for privately, through out-of-pocket payments. Its uncontested and long-serving political regime has been averse to developing welfare programs and considers public financing of these programs as anathematic. Most expenditure on healthcare and during retirement is therefore met through individual and family savings. While the state does not play an active role in providing these services it intervenes deeply through a coordinated set of policy tools (regulation and organization) to ensure that healthcare costs remain affordable and an individual’s retirement needs are met. Indeed, Singapore enjoys health outcomes comparable to OECD economies at relatively low costs (less than 4 per cent, compared to 10-12 of national income in OECD economies). Its generous public housing programs, and incentives for individuals to act as caregivers for their retired parents have reduced the need to rely on public pensions during retirement. This paper argues that while the government has been steadfast in its aversion to building a traditional welfare state and encourages its citizens to pay for these services through individual savings, it actively manages healthcare and pension policies to ensure that costs remain low. This paper analyses the policy tools and levers utilized by the Singapore government to intervene in these two programs without financing them and achieve universal access, and compares these with the conventional instruments to deliver social policy. The paper concludes by discussing the political challenges of Singapore’s unorthodox redistribution mechanisms. Methodology: Qualitative case study based on primary data collected in 2013