To Bid Or Not The MRT
And onto a rare excursion into academia, a working paper hosted by America's National Bureau of Economic Research (NBER) has made it to the local news, a feat that would have been unlikely but for the suggestive title: Do Social Norms Substitute for Enforcement? Evidence from Public Officials' Home Purchases in Singapore. This would shortly after have the local Public Service Division (PSD) carefully reviewing the main findings, which alleged that "(Singapore) civil servants disproportionately purchase homes near planned - but not yet publicly announced - stations, with the effect concentrated one to two years before public announcements."

The actual manuscript is a fairly-dense 39-page thesis that begins by modelling the situation by setting up the environment and public official agents, before integrating actual data drawn from the Singapore Government Directory Interactive website (apparently recently scrubbed of personal contact information), and comparing the public official group against a matched uninformed control group, with additional analyses run against groups assumed to have housing market expertise, namely real estate agents and corporate board members. Perhaps damningly, it was observed that "...Civil servants exhibit a notable increase in purchasing target properties one to two years prior to the (new MRT station) announcement... correspond(ing) to a relative increase of more than 60% relative to the unconditional average" (Page 22).

For explicit context as to why this would be scandalous if found true, it would imply civil servants essentially insider-trading for monetary profit using knowledge obtained in their public service role, which might be known as (gasp!) corruption in certain jurisdictions. And although more-mature democracies such as the United States have apparently come to terms with congresspeople supplementing their meagre salaries with incomprehensibly accurate stock picking, such enlightened and modern attitudes have not yet filtered to more-traditional and authoritarian societies such as Singapore, whose ruling party and founding father(s) had taken pains to cultivate a (near-)zero tolerance stance towards such hanky-panky.


Not pulling many punches here
(Source: nber.org)

Now, a number of seemingly-valid critiques have been raised against the working paper, the most glaring of which would probably be on the veracity of the individual data used. Since no collaboration had been sought (or granted) with the public service, the linkage between individuals and private-property transactions appears to be by name only (Page 18) instead of a provably-unique identifier such as the NRIC, which would mean that incorrect linkages of multiple people with the same name might have occured; such matching concerns do not appear to be discussed in the paper. Further, allocation of civil servants into rank tiers is by ChatGPT 4.0 (Page 68), and while hand-coding and validation is mentioned, details are sparse.

What was far more intriguing to the general public, however, was the authorship and acknowledgements list, especially the latter. The four authors all hail from very reputable universities - Columbia, Stanford and The University of Hong Kong - which does put some weight on the paper, all the more since research on foreign phenomena is nothing out of the ordinary in academic economics. The acknowledgements were yet more fascinating, including as it did the estranged nephew of our senior Senior Minister, whose father had been front and center in the tussle over LKY's house (now national monument), as covered last year. Two of the local professors would also request that their names be removed from the thank-you list, an appeal that has yet to be granted as of today, so it seems.

Although it remains to be seen as to what verdict the PSD will deliver on the rather concerning pattern, it does appear not overly difficult to make educated guesses about upcoming MRT station locations, and it seems unlikely that conclusive non-circumstantial evidence will be found, not to mention that our extremely well-educated technocrats will probably be able to poke holes in the methodology if need be. Still, the shade thrown on the reputation of the local administration should stay to an extent - and this may not be resolvable by suing the perpetrators in the domestic courts, as recently happened for Bloomberg concerning other questionable real estate deals, if only insinuated against selected individuals. Then again, one supposes this barely qualifies as a "love tap" in The Greatest Game, as the GOD-EMPEROR TRUMP would put it!


[To be continued...]