Policy Sciences

, Volume 47, Issue 3, pp 305–320 | Cite as

Market imperfections, government imperfections, and policy mixes: policy innovations in Singapore

  • Xun WuEmail author
  • M. Ramesh


Proper roles for government and market in addressing policy problems may be assessed by considering the duality between market imperfections and government imperfections. The potential of government interventions or market mechanisms as core policy instruments can be eroded by fundamental deficiencies deeply rooted in either government or market as social institutions. The impacts of such deficiencies are much more extensive than postulated by the existing theories. Analysis here, based on policy innovations in land transport and health care in Singapore, suggests how policy mixes might become the norm of response for addressing policy problems found in a range of sectors. The analytical framework presented may help to distinguish among different policy mixes according to their effectiveness, but also provides some useful guiding principles for policy design.


Policy mix Market imperfections Government imperfections 


  1. Acemoglu, D., Verdier, T. (2000). The choice between market failures and corruption. American Economic Review, 90(1) 194–211.Google Scholar
  2. Becker, G., & Murphy, K. (2009). Do not let the ‘cure’ destroy capitalism. Financial Times, 19, 2009.Google Scholar
  3. Coase, R. (1964). The regulated industries: Discussion. American Economic Review, 54(2), 195, as quoted in Williamson , O. E. (2002). The lens of contract: Private ordering. American Economic Review, 92(2), 438–443.Google Scholar
  4. Datta-Chaudhuri, M. (1990). Market failure and government failure. The Journal of Economic Perspectivesm, 4, 25–39.CrossRefGoogle Scholar
  5. Grand, J. (1991). The theory of government failure. British Journal of Political Science, 21(4), 423–442.Google Scholar
  6. Hanvoravongchai, P. (2002). Medical savings accounts: Lessons learned from limited international experience. EIP/FER/DP Discussion Paper Number 3. Geneva: World Health Organization.Google Scholar
  7. Hsiao, W. C. (1995). Medical savings accounts: Lessons from Singapore. Health Affairs, 14(2), 260–267.Google Scholar
  8. Kleiman, M. A. R., & Teles, S. M. (2008). Market and non-market failures. In M. Moran, M. Rein, & R. E. Goodin (Eds.) Oxford handbook of public policy, Chapter 31. Oxford: Oxford University Press.Google Scholar
  9. Krueger, A. O. (1991). Government failures in development. National Bureau of Economic Research.
  10. Lam, S. H., & Toan, T. D. (2006). Land transport policy and public transport in Singapore. Transportation, 33(2), 171–188.CrossRefGoogle Scholar
  11. Lounsbury, M. (2010). Markets on trial: The economic sociology of the US financial crisis. Emerald Group Publishing.
  12. LTA. (2012). Singapore land transport statistics in brief. Singapore: Land Transport Authority.Google Scholar
  13. Massaro, T. A., & Wong, Y.-N. (1995). Positive experience with medical savings accounts in Singapore. Health Affairs, 14(2), 267–272.Google Scholar
  14. Mueller, D. C. (1976). Public choice: A survey. Journal of Economic Literature, 14(2), 395–433.Google Scholar
  15. Osborne, D. (1993). Reinventing government. Public productivity & management Review, 16(4), 349–356.Google Scholar
  16. Ramesh, M. (2008). Autonomy and control in public hospital reforms in Singapore. American Review of Public Administration, 38(1), 62–79.Google Scholar
  17. Santos, G., Li, W. W., & Koh, W. T. H. (2004). 9 Transport policies in Singapore. Research in Transportation Economics, 9(1), 209–235.CrossRefGoogle Scholar
  18. Seik, F. T. (1998). A unique demand management instrument in urban transport: The vehicle quota system in Singapore. Cities, 15(1), 27–39.CrossRefGoogle Scholar
  19. Stiglitz, J. (2011). The failure of macroeconomics in America. China & World Economy, 19(5), 17–30.CrossRefGoogle Scholar
  20. Tan, S. T. (2009). Economics in public policies: The Singapore story. Singapore: Marshall Cavendish Education.Google Scholar
  21. Taylor, J. B. (2009). How government created the financial crisis. Wall Street Journal, 9, A19.Google Scholar
  22. Vining, A. R., Weimer, D. L. (1990). Government supply and government production failure: A framework based on contestability. Cambridge University Press.
  23. Wagstaff, A. (2005). Health systems in East Asia: What can developing countries learn from Japan and the Asian tigers? Policy Research Working Paper WPS3790. Washington DC: World Bank.Google Scholar
  24. Wallis, J., & Dollery, B. (2002). Wolf’s model: Government failure and public sector reform in advanced industrial democracies. Review of Policy Research, 19(1), 177–203.CrossRefGoogle Scholar
  25. Weimer, D. L., Vining, A. R. (2005). Policy analysis: Concepts and practice.
  26. WHO. (2000). The world health report 2000: Health systems: Improving performance. Geneva: World Health Organization.Google Scholar
  27. Wolf, C. (1987). Market and non-market failures: Comparison and assessment. Journal of Public Policy, 7(01), 43–70.CrossRefGoogle Scholar
  28. Wong, C. Y., Wu, E., & Wong, T. Y. (2007). Examining the effect of publishing of bill sizes to reduce information asymmetry on healthcare costs. Singapore Medical Journal, 48(1), 16.Google Scholar
  29. Zerbe, R. O., & McCurdy, H. E. (1999). The failure of market failure. Journal of Policy Analysis and Management, 18(4), 558–578.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Lee Kuan Yew School of Public PolicyNational University of SingaporeSingaporeSingapore

Personalised recommendations