Public financial management in Singapore: Key characteristics and prospects

Public financial management (PFM) has played an important role in Singapore's remarkable economic success since its independence. This paper analyzes select characteristics of Singapore's PFM strategy and prospects for their continuation. An underlying theme has been ensuring that PFM is consistent with and enables Singapore's location-based growth strategy. Other characteristics include conducting economic activities outside the conventional government budget giving rise to a much larger role for the public sector than reflected in the budget; extensive use of non-conventional sources of revenue such as from the lease of land, creating property and usage rights to generate tax-like revenue; and limited social risk pooling in financing national spending on healthcare and pensions. As Singapore's business-location-based strategy reaches its limits, and an affluent and ageing population aspires for greater economic and social security, transparency, and effective participation in public policies, current PFM practices will need to undergo significant changes towards a more citizen-centric governance focus. Policymakers' response will not be constrained by lack of fiscal resources, or by institutional and organizational capacities.