Singapore is often cited as a case study by everyone on the political spectrum. I mean, who wouldn’t want to take credit for an overcrowded backwater that transformed into a spotless, wealthy metropolitan city? Changi Airport feels like a luxury mall reserved for the elite, and everyone knows about the luxury boat hotel. Best of all, there are countless recordings of former Prime Minister Lee Kuan Yew giving powerful & inspirational speeches about having an iron spirit.

And for Libertarians in particular, there are some genuine laissez-faire aspects to Singapore. The corporate tax rate is ~17%, imports can dock at ports with mostly tariff-free access, and foreign investors are treated quite well. Of course, this is only a sliver of the broader economy.

I recently asked my followers on Twitter why laissez-faire Libertarians & Anarcho-Capitalists are so obsessed with Singapore when it’s very far off from their proposed model.

The responses were unsatisfactory to say the least.

Everyone here is, of course, not wrong in pointing out the obvious low taxes, free trade, low barriers to forming a business, strong private property laws, and Singapore’s ranking on most economic freedom indexes; however, these are incredibly cherry-picked facts that don’t give us a sufficient picture of Singapore’s overall economy.

Singapore is a heavy-handed developmental state that publicly owns the majority of land that provides housing for the majority of the population. Singapore also mandates savings and plans for industrial production, infrastructure, and defense. Calling this arrangement “laissez-faire” seems way off.

For this blog, I’m willing to exclude Singapore’s social authoritarianism since we’re only interested in economic freedom & laissez-faire economics, though, as a quick reminder, Singapore has judicial caning (spanking), along with other radically harsh punishments such as the death penalty for drug traffickers who carry more than the statutory threshold (15 grams of heroin or 30 grams of cocaine). In any case, though, I think I have more than enough substance to demonstrate the non-libertarian nature of Singapore’s economy.

Singapore is spectacularly successful, hence why so many people want to reverse-engineer their ideology into it as a success case. Socialists do this, and Libertarians do this. “The country is rich, therefore it must be laissez-faire (or socialist). The reality is that Singapore is a market-friendly developmental state with a highly activist but benevolent government.

 

State Ownership of Land

 

Singapore’s Housing and Development Board (HDB) has built over 1.25 million flats, which make up roughly 80% of residential lodging. In 2025, 77.2% of residents lived in HDB dwellings alone. These HDB households are labeled as homeowners, which is much different from being a homeowner in the United States. Similar to China, you’re merely purchasing a long-term lease with interest rather than gaining ownership to appreciate like an alternative asset. Long-term lease arrangements stretch to 99 years, and selling usually requires a minimum occupancy of 5 years. So, to be crystal clear here, the state floods the housing market, sets the rules, designs mortgages, and determines eligibility? Not very libertarian, I must say.

Properties aside, ~90% of Singapore’s land is owned by the state. There’s not an ounce of homesteading here. The Singaporean government did this by inheriting colonial Crown colony land and using compulsory acquisition laws to retrieve the rest of the island. There are genuine fruits borne out of this, too; Singapore transformed swathes of slums into dense, transit-connected cities and made housing extremely accessible. On top of all this, Singapore’s housing system is tied to a mandatory social security machine funded by employer and employee taxes. In 2026, the rate for citizens and permanent residents under 55 was 37%, with 20% coming from employees.

You can argue how this YIMBYist setup is far more optimal compared to the mixed American model of zoning and local scarcity cartels, but still, this very clearly is not the poster child of a laissez-faire libertarian model.

 

The Sovereign Wealth Funds (Temasek) and Capital Allocation

 

The cherry on top is Singapore’s Sovereign Wealth Fund (SWF), Temasek, which looks like something straight out of Econoboi’s wet dream. The colossal fund of 518 Singaporean billion dollars (401.06 billion USD) invests heavily in domestic companies like DBS, Singapore Airlines, Mapletree, and so on. Similar to South Korea, Singapore’s industrial policy used government-procured funds to carry a cluster of industries from finance to aviation to electricity.

The government also offers various incentives like tax credits and grants for certain projects, committing roughly 37 billion Singaporean dollars to semiconductors, AI, and biotech over 5 years.

Neither of which is central planning or libertarian Capitalism. It would be appropriate to call this kind of setup a polished Capitalist activist economy where bureaucracy isn’t overtly hampering everything down.

 

The Problem With Economic Freedom Indexes

 

I believe the deepest confusion lies in the use of economic-freedom indexes. Essentially, indexes are designed by institutions to measure freedom, not to measure how close an economy is to the preferred Austrian model. Could you imagine that? An index in which 100/100 meant an Austrian AnCap economy, 75/100 meant a Chicago School-esque liberal society, and 50/100 meant some Dirigiste command economy. Unfortunately, that’s not at all what indexes approximate. Unironically, when AnCaps talk about freedom index scores, they talk as if someone’s piping around a jar of freedom to pour on select countries.

Anyhow, if you look at any Freedom Index, you’ll likely find Singapore at the top. The Heritage Foundation, for example, scores Singapore at 84.4/100, ranking #1. To quickly break down this score, their tax burden score is 89.2, government spending 58.3, business freedom 89.5, trade 95, and investment freedom 90. Not having to sacrifice your left ball to a licensing bureau every time you want to take your company public is certainly a plus, and pretty closely aligned with your typical laissez-faire model.

Heritage gives each of its twelve components equal weighting, i.e., government integrity counts for 8.33%, trade freedom counts for 8.33%, etc. The issue here is that there isn’t a measure of state ownership of enterprises (SOEs). And a government that owns airlines, telecommunication networks, seaport operations, and swathes and swathes of properties certainly seems more than negligible. Thus, this kind of omission is quite misleading for assessing state-directed, SOE-heavy countries like Singapore. It would be like observing an economy with no export barriers, while ignoring that the very building and ground that the company operates on is government-owned. The Fraser Institute mends some of my objections here by including a measure of SOEs, but heavily underweights them in the final calculation, and includes measurements like sound money, which are wholly irrelevant to the question of whether a country’s economy is laissez-faire or not.

Other Index Problems

 

To jump back to the Index problems, the Fraser Institute does a better job than the Heritage Foundation by adding in a measure of state ownership, by which Singapore scores 5.145/10, a clear acknowledgment of anti-libertarianism. Unfortunately, the weighting is indefensibly low, sitting at 4%, which means that Singapore’s heavy SOE presence only drops the total freedom index by (10-5.145)*0.04 = 0.1942%. Perhaps this is defensible for measuring how free people feel or something, but laundering this into measuring how close the economy is to a laissez-faire setup, it becomes indefensible. It’s absurd to think that the state owning ~90% of the land, dominating the housing market, forcing savings, and holding major stakes in corporations across the commanding heights of the economy would be merely a drop in the bucket.

But to reiterate, Singapore’s ranking is not fake, more than it’s skewed by irrelevant metrics. Singapore really is remarkably laissez-faire on free trade, taxation, foreign investment, etc. Interestingly enough, tinkering around with the SOE weights can show you how sensitive the scale is.

And if you tweak Singapore’s 5.145/10 SOE score and change the weight from 4 to 10 percent while lowering everything else proportionally, then Singapore drops from rank #2 to rank #4. At 15%, Singapore falls to fifth, and this is without tweaking every other country on the list. Tweak the specs a bit more, and at a 20% weighting, Singapore falls to fifth. You can validate this yourself by downloading the Excel sheet on Fraser’s website.

But is tripling the state ownership weight really defensible? I think so. The rationale I have here is that giving state ownership a 15% share of the index is justified by a 5% share for nonfinancial state enterprises, 5% for land ownership and housing, and 5% for mandatory savings & preferential credit handouts. So in essence, I believe the design choice, at least for the question of laissez-faire economic models, is incorrect; thus, these indices are not informative of how laissez-faire an economy is.

Corruption & Competence

 

The other glaring issue is one you’ve probably heard of. These indices always mix institutional setups with successful outcomes or qualities unrelated to the setup. Less corruption often means more freedom, yes, but Libertarians don’t suddenly get to bake in less corruption into their minarchist economic model in virtue of this. The same thing applies to crime rates, police effectiveness, labor force participation, GDP growth, etc which fail to tell us how closely aligned this country’s economic model is to our own. If you launder this into your index and cite it as proof of laissez-faire, then what you get is a circular exercise where prosperity is baked into our definition of freedom.

Anyhow, I couldn’t reconstruct the index with the Heritage Foundation’s index because their twelve component scores don’t have a publicly available breakdown, quite strange, I must say. But the idea is simply to exclude all these variables that are irrelevant to the institutional setup. With the Fraser Institute, I removed police, crime, current inflation, inflation variability, and money growth measures, which make up roughly 17.5% of the original index. By renormalizing the “survivor” metrics, I adjusted Singapore’s score to 8.53. Then, by readjusting the SOE weights (15%) as done in the previous section and scaling it up by 20.48%, we end up with a new SOE weight of 18.72% or ≈ 19%. Based on this metric, Singapore now scores between 5th and 8th place.

Some Caveats

 

More importantly, Singapore is undoubtedly one of the best industrial development stories in the past century, but the counterfactual is not exactly clear. We only observe one Singapore, and there isn’t some clean control-treatment split we can peer our eyes into. As political economist Bryan Cheang pointed out, Singapore’s success is real; however, Singapore could have been far more successful if it had pursued a more privatized-free-market setup, in which private firms scale into global competitiveness. Cheang points out that directing land, capital, education, etc, towards favored multinational firms undercut smaller entrepreneurs as they were swallowed up by the uneven playing field. Pre-1997 Hong Kong is a case study which makes a strong case for liberalized development. In any case, something to keep in mind.

Conclusions & Implications

 

The important thing to keep in mind here is that Singapore is a Capitalist economy and central planning likely has little to do with its success; rather, Singapore is a polished state-led economy with light regulation on ordinary business activities.

Libertarians should certainly point to Singapore’s low-regulation environment, but they shouldn’t ignore the public land ownership, compulsory saving, and swathes of public housing that make Singapore very far off from their ideal.