The problem with the national conversation: information asymmetries

Dear friends, as long as there are significant information asymmetries in the government-citizen relationship, Singapore will never be able to have a completely fair and open national conversation.

What information asymmetries exist? Simply, the government has all the data and information, and we, the people, are given only selective access to it. Whenever people talk about the “lack of information” or the need for a “freedom of information” act, it is difficult to grasp what precisely this means in practice, and why exactly we need it.

Hence, in my humble bid to shed some light on this problem, I will adopt the same approach as I did last year, when I wrote a piece entitled “The problem with Singapore’s media“, showing six clear examples of institutionalised bias in Singapore’s media.

Here, I will show three clear examples of how the Singapore government’s stranglehold over data has blunted my ability to function as an analyst and journalist, preventing me from writing transparently, undermining the richness of any dialogue I can hope to promote through my writing.

If you’d like to cut straight to the three examples, please click here. But, if you are keen on some discussion on information asymmetries in society, then do read on.

Information asymmetries

“In economics and contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry, a kind of market failure in the worst case.” ¹

Information asymmetries can lead to several “market failures”, including adverse selection, moral hazard, and principal-agent problems.

“Adverse selection” is best demonstrated through the market for second-hand cars. Sellers know exactly how many times they’ve spilled coffee or burnt rubber on the cars they’re selling. Buyers don’t. Sellers of lemons are more likely to be bargained down than sellers of good cars. At any given price, it is more likely that a lemon than a good car is going to be sold, to the detriment of buyers and sellers of good cars.

“Moral hazard” pops up frequently in the insurance industry. Insurance firms assume all 26-year old drivers are the same. But Speedy Gonzalez assumes that once he has paid his insurance, he can drive how he wants because somebody else will cover him. If the insurance firm could have identified the Speedy Gonzalezes beforehand, it would have raised their premiums.

“Principal-agent problems” occur when the interests of the “principal” are not aligned to those of the “agent” who represents the principal. These issues are commonly discussed in terms of corporations. The company owners (principals) hire managers (agents) to run the firm. But the managers (agents) make decisions–bigger bonuses, more Club Med retreats–that might not be in the interests of the owners (principals), who are keen to maximise profits.

Everyday information asymmetries

Consider the doctor-patient relationship.

“The asymmetry of information makes the relationship between patients and doctors rather different from the usual relationship between buyers and sellers. We rely upon our doctor to act in our best interests, to act as our agent. This means we are expecting our doctor to divide herself in half – on the one hand to act in our interests as the buyer of health care for us but on the other to act in her own interests as the seller of health care. In a free market situation where the doctor is primarily motivated by the profit motive, the possibility exists for doctors to exploit patients by advising more treatment to be purchased than is necessary.” ²

Errrr, Susan Lim?

Many information asymmetries also exist in the financial services industry. Given the drama we witnessed in 2008, it’s fitting that we look at collateralised debt obligations (CDOs) in the American mortgage market. Perhaps the most famous example of an information asymmetry being exploited is when John Paulson, a hedge fund manager, allegedly influenced the composition of a Goldman Sachs CDO and then bet against it. In other words, Mr Paulson helped choose some really shitty mortgages that went into a bond which was then sold off to investors. The investors thought it was gold. Mr Paulson knew it was crap. And he made money off that trade. (Of course, he could have also lost money if the value of those subprime mortgages kept rising.)

Closer to home,  we have the Lehman Brothers Minibond Saga, where Singaporean financial institutions were accused of having mis-sold products; ten of them had penalties imposed. The mis-selling was possible only because of an information asymmetry: the sellers of the financial products had more information–i.e. understood the risk-reward profile better–than the buyers, many of whom were inexperienced elderly investors.

Information asymmetries in government-citizen relations

Government-citizen information asymmetries can lead to principal-agent problems. Elected politicians are actually the agents who are chosen to act on behalf of the principals: the voters, the people, the citizens. But these agents (politicians) may not always be acting in the best interests of the principals (voters).

Why would governments want to hide information from citizens? It usually relates to elite protection. People in positions of power, in their bid to retain their status, can go to great lengths to hide and massage data and information.

A country’s political system influences its approach to freedom of information. On one side of the spectrum we have the most information-biased country on the planet: North Korea, a brutal totalitarian, military dictatorship. On the other, we have liberal democracies, such as the US, which not only have Freedom of Information acts–including systematic declassification of secret government documents–but also have assertive, independent media outfits that relentlessly hound the government for data and information.

However, it would be wrong to conclude that the countries with the most liberal information agendas are the ones with the most politically aware or enlightened populations. As much as there is information, there is also mis-information. Vested financial and political interests regularly  manipulate the media in ostensibly open, democratic systems. That is the reason why many Americans believed that Saddam Hussein was responsible for 9/11, and why many of them today believe that President Obama was born outside the US.

Hence, even in countries where there is freedom of information, one might argue that the informational outcomes are not always optimal from the principals’ (voters) point of view. There are many other factors that matter, including literacy and media quality and diversity. If you’re keen to read more about information control and media manipulation, do refer to the work of Noam Chomsky.

Nevertheless, all other things being equal, it is in the interests of principals (voters) to demand greater information access from their agents (government); with a few possible caveats, related to national security. Yet, even then, according to Mr Chomsky in this video on freedom of information,

“If you look at the declassified records, you find very little material that has anything to do with national security or the defense of the country. What you find mostly is the need to defend the government against its own population. Most of what’s there, they just don’t want you to know, because it harms power.”

What are some other countries that have Freedom of Information Acts? According to Wikipedia,

“President Pervez Musharraf promulgated the Freedom of Information Ordinance 2002 in October 2002. The law allows any citizen access to public records held by a public body of the federal government including ministries, departments, boards, councils, courts and tribunals. It does not apply to government owned corporations or provincial governments. The bodies must respond within 21 days.

In Germany, the federal government passed a freedom of information law on September 5, 2005. The law grants each person an unconditional right to access official federal information. No legal, commercial, or any other kind of justification is necessary.” ³

Where does Singapore sit on this government-citizen information continuum?

Although some government critics have in the past (ridiculously) put Singapore and North Korea in the same sentence,  in terms of information, we are actually much, much closer to the US or other Western liberal democracies than we are to totalitarian states. Nevertheless, there is still a lot of information that the government keeps from us–let me describe the three instances of government agencies rebuffing my requests for data and information.

Note: As with my earlier piece on the media, I will not be revealing the names of any of the Singapore government officials I communicated with. This article and argument has absolutely nothing to do with them; it is simply about the system and structure that we all have to operate within. In fact, all of them were quite cordial and prompt in my discussions with them, and were simply following orders–or, perhaps, as often happens in any hierarchical organisation, they were erring WAY on the side of caution. Not empowered to make big decisions, so they “cover backside”, and turn me away.

Here are the three incidents:

1) Secretive population data Part I

In November 2009 I was working on a piece for The Economist looking at immigration and its impact on Singapore. You can read my final article here.

As part of my research for the piece, I wanted to find out the ethnic breakdown of three groups of people: the “Permanent resident population”, the “Non-resident population”, and the “New citizens (i.e. not born in Singapore)”?

Why did I want to know the ethnic breakdowns? Simple. I wanted to see if Singapore’s immigration policies were giving preference to any particular nationality or ethnic group. Some HR personnel and small business owners had told me, for instance, that it is much easier to bring in Chinese from China, Malaysia and Indonesia than it is any other person on this planet.

I wanted to find out if this is true, partly because then it might explain some of the irritation in society with service staff who speak only Chinese. ““I am Singaporean and tired of service staff who can only speak Mandarin” is a group on Facebook, the social-networking site, with more than 10,000 members,” I had written three years ago.

So I asked the Population Statistics Section at the Singapore Department of Statistics. The only data point it offered was “Permanent residents by ethnic group, 2000”. This was its reply: “We are sorry to inform we are unable to provide further breakdown of the permanent residents and non-residents for the other years requested.”

As soon as I read this, my mind started racing. Why wouldn’t the government want to share ethnic breakdowns of migrants? Was the situation really so serious, i.e. has Singapore really been drastically changing the composition of its population? I still don’t know.

I also asked the newly established National Integration Council (NIC): “How many Singapore citizens are Singapore-born, and how many are foreign-born?” This would allow me to properly consider the extent of the “integration” challenge facing the NIC.

I was foolishly assuming that the NIC would be happy to share this data. After all, if its mandate is to promote integration, surely it has to know how many foreign-born people there are in our country? And surely it would want to inform the people in the country so they are aware of all the other wonderful people in the country?

Well, no. As you will read further below, that was the first but not the last time the government did not want to share this bit of information with me. Again, my mind started racing. Why does the Singapore government not want Singaporeans to know how many foreign-born citizens are in the country?

2) Secretive education spending data

Earlier this year, the Economist Intelligence Unit (EIU), where I work, published a research report comparing preschool education around the world. I was the editor of the report. After the report was completed, I wanted to write an Op-Ed for The Straits Times on preschool education in Singapore. You can read the Op-Ed here.

Just to rewind a bit–when the EIU was conducting its research for the project, we had asked each of the 45 countries we studied to provide us with data on “Government spending per relevant-aged child”, i.e. how much public money is being spent on children below the age of 7. For every other country, this is public information. Not here–in Singapore, this data is confidential.

Singapore’s Ministry of Education (MOE) had very kindly agreed to let us have the data purely for the purposes of building the model, i.e. we could use it in our benchmarking of the 45 countries, but were not to publish it publicly.

OK. I had initially thought this was because MOE, for whatever reason, did not want this info being disseminated across the world. But surely MOE would consent to publishing it in the local newspapers, for Singapore citizens to understand the state of preschool education here?

Well, not really. The official at MOE told me not to release this figure to The Straits Times. So, as you will see in my Op-Ed, I had to dance clumsily around the fact:

“In terms of government spending per year on each relevant-aged child, exact figures for Singapore are not available, but it is understood to spend less than Norway does (US$7,620 in PPP terms), and less also than countries such as New Zealand (US$4,329), Japan (US$4,029) and Poland (US$2,635).”

From a journalistic point of view, this creates confusion. Any reader who reads the above statement will ask: So, what exactly does Singapore spend? Is it US$2,500? Or is it US$500? This loss of clarity is to the detriment of all parties involved.

From a citizen’s point of view, you are probably asking yourself the same question I did. In an article in a Singapore paper, why is it that we Singaporeans are not allowed to know how much of our tax money is flowing into preschool education? Not only that, what makes it more galling is the fact that we do have the information to discuss all the other countries’ spending amounts. But not ours.

Why does the Singapore government not want Singaporeans to know how much it spends on preschool education?

(Note: Even though I learned about all this during the course of my work, there is nothing confidential here. I did not discover all this because of any privileged access. Anybody who is interested in preschool spending in any of those 45 countries would have found out exactly what I did.)

3) Secretive population data Part II

The most recent brush I had with government information intransigence was last month, when I was doing research for a piece entitled “The End of Identity” that I intended to publish on the IPS Commons site.

In order to get a better grip on Singaporean identity, I wanted to know what percentage of citizens were born in this country. Essentially, the same question I had asked three years prior, but coming it at from a slightly different angle.

This time, I was actually much more optimistic about getting a straight answer from the government. At a macro socio-political level, from 2009 to 2012, there have been quite significant changes in this country, as Singapore’s political space has opened up. In particular, it seemed to me that the government is trying to be much more consultative, and engage citizens like myself in conversations and dialogues. At a more micro level, I was buoyed by the setting up of the National Population and Talent Division (NPTD), which sits under the Prime Minister’s Office. The NPTD was some proof, I thought, that the government is taking the population issue seriously.

Perhaps most importantly, the NPTD had recently rolled out a population “Issues paper” with a big song and dance, with the specific aim of “engaging the public extensively this year to hear their views, because we think it’s an important issue that affects all of us,” according to an official at NPTD.

Finally! Now I can ask the NPTD all my burning population questions that will help me write my pieces.

Well, not really.

As it turns out, the NPTD only wants Singaporeans to discuss certain population issues, not others.

After almost one week of mulling what to say to me, amid numerous conversations with a Corporate Comms person there, this was its official reply: “The number of Singapore citizens, as at Dec 2011, is 3.27 million. We do not provide a breakdown in terms of local-born or naturalised citizens, as we regard them all as Singaporeans.”

From a journalist’s point of view, this whole process of information gathering can be quite frustrating. First, I have no idea about whether I’m going to get the data I need. Second, my piece gets held up for a week, as the government spin doctors whir into action. No big deal in this case, since many people ultimately got to read it. But it still rankles.

Third, there is again loss of clarity, to the detriment of all parties.

This process of government obfuscation, which then leads to journalists having to come up with rough approximations, which then leads to readers having to wonder what the truth actually is–is this the kind of National Conversation we want to have?

Is the NPTD interested in a genuine engagement or is its main purpose simply to communicate the government’s population policies to the people of Singapore?

And, to ask the same question that bothered me three years ago, why does the Singapore government not want Singaporeans to know how many foreign-born citizens are in the country?

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Conclusion: What kind of a national conversation do we want?

Let me sum up with a few points. First, when faced with requests for Freedom of Information, a frequent government retort–not just in Singapore, but the world over–is that “there are national security concerns”. If anybody ever mentions this to you, dear reader, I’d appreciate if you can point them to the above three examples. I can’t wait for somebody to explain how spending on toddlers is a national security concern.

Second, to reiterate, I do not think there’s any point haranguing Singaporean government officials (i.e. civil servants) who refuse to provide data or information. They are trying to do the best possible job given the constraints they face, just like journalists in mainstream media outlets. We have an institutionalised problem that needs to be addressed.

In fact, I think the government officials’ jobs would be much easier if Singapore had a Freedom of Information Act. Then they wouldn’t have to spend time wondering whether to respond to requests from people like me. They could just get on with their work. Do note that data and info is not transparent even within the govt. According to my public sector friends, there is often a problem with government units hoarding information and hiding it from other government agencies.

A Freedom of Information Act would help us all. Note that, according to Wikipedia, “A basic principle behind most freedom of information legislation is that the burden of proof falls on the body asked for information, not the person asking for it. The person making the request does not usually have to give an explanation for their actions, but if the information is not disclosed a valid reason has to be given.”³

Even if a Freedom of Information Act is politically unworkable in the short term, I am sure there are other ways to free up the mountains of data and information that citizens want access to. Perhaps we can set up a separate “Information office”, or Ombudsman of some sort, with the authority and mandate to get other government bodies to release information to the public. I’m sure there are other problems around this, but it’s high time we considered all our options.

On a related note, I am not even sure Singapore’s most senior politicians are happy with the status quo. Some may be, of course, but there are others who might see the value in sharing data and information–like those in the 3 examples above–with the general public. This can improve the quality of public discourse and ultimately policies. But, as with any huge, hierarchical bureaucracy, not every intention at the top gets passed down the chain of command swiftly. It is entirely possible that the foot soldiers are slightly out of step with the generals.

Earlier this year, Teo Chee Hean, the deputy prime minister, got a lot of stick for asking students “What do you think?” in response to some tough questions. While it would have been nice for Mr Teo to offer more concrete opinions of his own, part of me agrees with him. It is important to ask Singaporeans what we think. (It’s also important to listen and absorb our responses.)

This is largely because of the increasing complexity of policymaking and economic development. In a modern, knowledge economy in an open, globalised world, information and knowledge exists in disparate pockets everywhere. “What do you think?” has arguably become a much more important question than at any point in our history.

But it’s also important for Mr Teo to remember two things. While it is good to ask “What do you think?”, the PAP should do so with a dose of humility. One of the main reasons Singaporeans assume that we do not have to think and contribute to policymaking is, well, for decades the PAP told us NOT TO.

“They say people can think for themselves? Do you honestly believe that the chap who can’t pass primary six knows the consequence of his choice when he answers a question viscerally, on language, culture and religion? But we knew the consequences. We would starve, we would have race riots. We would disintegrate.”
– Lee Kuan Yew, The Man & His Ideas, 1997

The second thing Mr Teo should understand is that as long as there are significant information asymmetries in society, Singapore will never be able to have a proper national conversation. And we the citizens will never be able to “think” as well as we should.

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Dear friends, in my book, Floating on a Malayan Breeze, I discuss in further detail several of the issues that crop up in this essay: the Malaysian and Singaporean governments’ control over information, and scripting of our national history; Singapore’s population policies; and our approach to ethnic composition, and the supposed preference for Chinese migrants.

If you are in Singapore, please join us for my book launch at 8pm, September 26th at the Esplanade. Do RSVP to Riya at orders.nuspress@nus.edu.sg if you’d like to come. Please click here for more details of the launch.

Also, the book itself will be available in book stores in Malaysia and Singapore very shortly. Look out for it! Or to buy on Amazon, click here.

References:

¹ Wikipedia: http://en.wikipedia.org/wiki/Information_asymmetry

² http://oheschools.org/ohech3pg4.html

³ Wikipedia: http://en.wikipedia.org/wiki/Freedom_of_information_legislation

Photo credit: Derek Midgley’s photostream