Singapore ranked top in financial stewardship, third overall in new govt effectiveness index

The country also ranked top in marketplace attractiveness.
The country also ranked top in marketplace attractiveness.PHOTO: ST FILE

SINGAPORE - A new league table evaluating the effectiveness of government has Singapore in the top spot for financial stewardship and marketplace attractiveness, and overall third in the global index.

The ranking comes amid the Covid-19 pandemic, which has revealed strengths and weaknesses in institutions, laws, and leadership, said the Chandler Institute of Governance, which added that governance is the deciding factor in whether countries succeed.

The non-profit organisation works with governments to build capabilities and is headquartered in Singapore.

The Chandler Good Government Index 2021 report is the first edition of an annual stock-take of government effectiveness in 104 countries.

Explaining the index, which was launched on Monday (April 26), the institute's executive director, Mr Wu Wei Neng, said it measures good government in a way which is "practical, relevant, and focused on capabilities".

"Capabilities (in governments) are key to outcomes that matter. The world needs to invest in more capable and trusted governments," said Mr Wu.

The index uses 34 indicators, which are organised into seven pillars: leadership and foresight; robust laws and policies; strong institutions; financial stewardship; attractive marketplace; global influence and reputation; and helping people rise.

It taps over 50 publicly available global data sources such as the World Trade Organisation, United Nations and World Bank.

The data is aggregated to produce a score on a scale of 0 (lowest) to 1 (highest).

Singapore ranked top in financial stewardship, measured using four indicators: government debt, budget surplus, spending efficiency and country risk premium - or the risk of investing in a country due to its economic governance and ability to repay sovereign debt.

"Despite an apparently high government debt-to-GDP (gross domestic product) ratio of 120 per cent in 2019, Singapore's net government debt-to-GDP ratio was actually zero per cent.

"This is due largely to the fact that the government has assets far in excess of its liabilities, and borrows only for investment or market-making purposes, rather than to fund operational spending," the report noted.

It added that Singapore's strong public balance sheet is widely acknowledged by international credit rating agencies and financial markets, and its government is one of only a few accorded the strongest credit rating worldwide.

The country also ranked top in marketplace attractiveness - ahead of Switzerland, and the only Asian country in this pillar's top 10, with Japan ranking 12th.

The report noted that countries which have done well under this pillar are all market economies with sound property rights and stable business regulations.

"These governments do not simply limit themselves to fixing problems, but play active roles in facilitating and welcoming business, trade, innovation, and investment."

Overall, the Republic ranked third, behind Finland and Switzerland; and ahead of the Netherlands, Denmark, and Norway.

Noting the presence of several Nordic countries in the top overall rankings, the report attributed this to their comprehensive social safety nets and systems, and effective national institutions which reinforce public trust in government.

It added that the ability to effectively tackle corruption is the indicator with the strongest correlation with overall good government rankings.

Georgetown University professor Kent Weaver, an advisory panel member for the index, said: "The Covid-19 pandemic shows us that trust is a vital part of good governance.

"When citizens trust their leaders and institutions to deliver effectively, governments can be more ambitious, and can work closely with communities to create opportunities and prosperity."