Yellowing soon?

The Economist points out another flaw in the 'morality' argument with regards to the salary. The implication of justifying high salary for the ministers with the point about attracting top talents and preventing corruption is that it seem to suggest that anything less would mean less able and virtuous state leaders, which obviously isn't the case.

My take on the whole issue has little to say about whether the adjustments are fair or if prevailing salaries are acceptable. And the point of bringing up the article from the Economist is to demonstrate the problem of the argument used.

So if white shirts turns yellow when you buy the cheaper ones, why don't we get other colours instead? Perhaps some day, people would find out that they can do fine with inexpensive light blue tee and just abandon the white ones.

Well, looking at the data on growth of GDP in Singapore, it is unlikely that the introduction of pegging ministerial pay to the private sector had any impact on performance of the economy though one could employ counterfactuals and suggest that we could have done worst without it. There comes a layer of complexity when we ask ourselves whether the motivation of these politicians/technocrats lies in serving the nation or earning a fat paycheck. There is no hard and fast rule about salary guidelines to prevent corruption of those in power though we do have management theorist who suggests that as long as we pay enough to get the issue of money off the table, workers would be able to concentrate on doing their job well. Perhaps the fact that people are in politics is supposed to shed light on alternative motivations?

A potential solution we should explore is for the ministers to bid their positions by making a wage offer to the public and providing their full personal histories and work experience details for the public to screen. The public could vote for the ministers; the top 5 voted candidates will be considered but the minister will be selected based on their salary bids. The lowest bidding candidate will be the minister, but his actual pay will be the higher of, either a 10% discount on the second lowest bid in the top 5, or his own bid. Given the intelligence of the candidates politics should draw forth, such a complex system should be able to attract only the brightest and best while allowing them to take a salary that they (and the public have 'agreed').

That is, of course, a joke. But the spirit of the mechanism is that we want the candidates to bare their motivations to the public and force them to give us a picture of what drives them. Then we'll decide if it's worth it to pay them that offer rate, based on their qualifications and the position in question. This also allows ministers taking on more difficult portfolios to receive a higher pay. Cabinet reshufflings will also be implicitly 'approved' by the public in this way. Best of all, opposition MPs are allowed to put themselves up for ministerial positions and the result would have taken into account public scrutiny of their qualifications, the salary they are going to be paid and also their personal incentives to take on the job - they gave the salary bid themselves so no reason they are going to say, now that's not enough for me.

Knowing the incentives of our political leaders are important. Soon after the news about the salary review recommendations were out, Grace Fu's facebook page status was:

"When I made the decision to join politics in 2006, pay was not a key factor. Loss of privacy, public scrutiny on myself and my family and loss of personal time were. The disruption to my career was also an important consideration. I had some ground to believe that my family would not suffer a drastic change in the standard of living even though I experienced a drop in my income. So it is with this recent pay cut. If the balance is tilted further in the future, it will make it harder for any one considering political office."

It drew forth loads of comments. It reflects how little we know about the true motivations and incentives of our politicians or how unconcerned we are. I think Grace is being really frank and objective here; we should empathize with her position. It is something very human to say and we really shouldn't think of our leaders as heroes who can make all the sacrifices in the world to lead our country. The whole pay issue is a tricky one, but we need to work towards making it less thorny.

Perhaps in a Singapore where our expectations for the future prospects of the country is not so dependent on the government; and that all the institutions are merely support and guiding structures for the private sector to take the lead, then we could relieve our leaders' workload while simultaneously relieving the taxpayers' burden of financing our leaders' salary. And perhaps we should work towards that; and for our government to prevent a crisis where we fail to balance between the 3 principles of the minister pay I've defined earlier, we probably have to transit our political system to one that takes more of a backseat in determining the future of our nation.

Galbraithian Wisdom

I've got some great quotes from John Kenneth Galbraith in his mid 20th Century book that bears great lessons for us even today.

Wisdom, itself, is often an abstraction associated not with fact or reality but with the man who asserts it and the manner of its assertion.

And after watching 'Inside Job'; you can't help but wonder if Galbraith's forecast turned out to be true for the SEC:

...regulatory bodies, like the people who comprise them, have a marked life cycle. In youth they are vigorous, aggressive, evangelistic and even intolerant. Later they mellow, and in old age - after a matter of ten or fifteen years - they become, with some exceptions, either an arm of the industry they are regulating or senile.

In any case, the documentary got me reading about some of the economist interviewed in the film. In particular, Glenn Hubbard and Frederic Mishkin were both caught a little off-guard in the film's interview by the director's questions. I thought that they handled the aftermath pretty okay (Mishkin here and Hubbard here). Obviously, the director had something he wanted the two professors to show to the audience and did portray them a little negatively but he did so to demonstrate a wider phenomenon as he justified.

From a human point of view, it is definitely easy to empathize with the director and it is what sells the movie. The policy difficulties and the way the crisis arose make it more difficult for the people in charge to agree with the director. There’s both a lack of certain (vs uncertain) information and cognitive bandwidth to process clues at the time before the crisis and during it. With the benefit of hindsight, the director is empowered to challenge the pre-crisis regime. Dommage pour le financiers!

In the Population in Brief 2011 (pity I didn't have such a reference material during those days when I was working on the research), it seems that fertility in Singapore has fallen even further but it seem to have stopped being such a big deal as the government internalized the social message at large, 'don't bother us with this matter'. There's even a line that says, "We recognise that getting married and starting families are personal choices and decisions." And in a typical Singapore-style bossiness that cannot tolerate inaction or lack of response to something deemed unsocial, it went on, "The Government aims to create a pro- family environment, through a comprehensive set of measures, including the Baby Bonus cash gift and co-savings, tax reliefs and rebates, as well as child care subsidies."

Up, up, up more slowly now...

In the latest LSE100 module which I recently completed, we explored the question, 'Is Population Growth a good thing?'. I was thrown back into a world I was familiar with from research and study of Human Geography back in High School. The Demographic Transition Model, Pro- and anti-natal policies, the 'development as a contraception' argument and so on. It was both interesting and somewhat annoying that themes in the discipline hasn't quite changed much. I guess the discipline is in itself shaped by the themes so I can't expect too much. But to consider population growth over a longer period and look at its dynamics from the perspective of the development of the human civilization and forward is interesting especially when you add technology, resource constraints and the notion of ideas into play.

And of course, more dramatically, the world just crossed a new milestone of having 7 billion people in the world - I remembered that the 6 billion mark was crossed some time in late 1999; my Geography teacher used so say that she and her geography class got the chance to watch the countdown (or count-up?) to 6 billion. More so than ever, we're all just another tiny soul wandering around the increasing crowded surface of our planet.

While 98% of people get a bit more satisfaction out of life (but not a lot) when their incomes rise, the remaining 2% are known as "frustrated achievers" — more money only makes them more unhappy, according to a team led by Leonardo Becchetti of the University of Rome Tor Vergata in Italy. Studying data on UK households, the researchers found that 70% of the frustrated achievers are female, and divorce is more common among this group than among the rest of the population.

Which brings me to the interesting idea explored in a public lecture in LSE last month; two professors 'debate' on the validity of using happiness as a measure of social progress rather than the 'traditional' indicators of income-measurements and development figures (mortality, access to services, nutrition, etc).

Indeed, happiness might often be relative and too often depends on context and circumstances. Our method of asking people if they are happy is as good as trying to measure the wealth of economy by randomly selecting people on the streets and then noting the amount of cash in their wallets. Too much of data relating to happiness is being missed out in the way it is captured now, making it difficult for happiness to be a measure of social progress though ideally, it actually serves as a good benchmark.

As for takeaways on making presentations, Dan Ariely always does a great job packaging his personal experiences into the messages he wants to bring across. This is possibly because in most of his talks, he discusses his own studies and research experiences - but he almost always successfully makes us think a great deal out of those simple experiences and reflect on their implications. That perceptiveness is probably the reason why he had managed to design such interesting experiments to draw exceptional conclusions about humans and the way we work.

Trading Commodities?

A couple of months back, I was in Ghana to work on a Microfinance Project under Global Brigades. It was an amazing experience to be working in one of the communities in Ghana, so closely with the locals in such a short time. There were the stuff you expected - lack of access to clean water, or electricity (mostly because of the expense rather than the lack of infrastructure in the case of Ghana). But there were also things I didn't quite expect - the widespread use of mobile phones, the fact that the young university students had Facebook accounts and how Akon and Rihanna were singers familiar to them.

It is also one of the first time I see so many kids at the same time, gathered together and so many young people around - this is when I realised that is what the first steps of development looks like. This is the point of time when access to medicine is improving, public health education more widespread and economic conditions were picking up following positive economic reforms. Indeed, it is when the population pyramid beginning to show marked effects of falling infant mortality (was 76 in 1990, fell to 47 in 2009) and child mortality (was 120 in 1990, fell to 69 in 2009) in the past 10 years. In Ghana, I actually felt what these statistics meant and saw for myself what it says about the lives of people.

Everyone I spoke to was optimistic about the future and the development of their country though some of the older ones were more skeptical about how much their lives would improve. The university students in particular were full of energy and ready to take the ideas they've picked up and use them out there at work if the opportunities come by. With so many youngsters and kids, teaching becomes an extremely important job and teachers are held in high esteem. The other important development statistics appear to be in favour of the country; literacy is climbing, and so is urban development. I can only hope that things continue to improve. Perhaps learning about the situation of countries through their statistics works only to the extent you can imagine the conditions of the people and the situation there. After a while, it just becomes something rather lifeless (just as I've experienced after researching through the key growth indicators of more than 10 European markets) - but be reminded of how those figures comes alive, and you'd probably appreciate them better.

Setting it up properly

Spending more than one and a half decade in a competitive education system like that of Singapore is pretty much enough to give me a good sense of what is wrong with it. It's a really good demonstration of how competition have been exploited way too far to attain an arbitrarily defined sort of excellence that has caused us to lose sight of the original intent of the competition itself. And perhaps this article discussing the state of NUS Lectures provides us with good insights on the effects of the 'Singapore Student Mentality'.

In a competitive set up of our education system, we want students to develop good character, work ethics, working knowledge of their field and an ability to motivate themselves to work hard. The design of our assessment and curriculum will have to match that in order to achieve the objectives of this competitive set up. Lectures and typical lessons should preferably not become 'exam-preps' as they probably are now. And while student feedback on course content and teaching style is good, it should be ignored when trying to drive lessons towards the direction of mind-numbing exam-preparation. At the end of the day, we want students who could go out there in life and perform.

A friend recently commented that bright Singaporean students sometimes face problems with getting in US schools because the top schools there are really not interested in an alumni who simply gets a good job, works hard and be recognized by his boss. These universities are interested in producing students who would be the next Steve Jobs or Mark Zuckerberg (sorry I'm only thinking about more tech related companies for now). They are not interested in people who can top their cohort with their GPAs, they want people who top their cohort with ideas that the markets applaud, visions that talents would follow and products consumers demand, or influence the economic policies. This makes them bolder when it comes to admitting students who may not have the scores but the great stories about their exploits on trips to exotic places, initiation of eccentric projects, failed entrepreneurship attempts.

If our economy is to transit to greater heights, and human capital is the most important thing to a tiny economy like Singapore then modifying education, and not migration policy is going to be priority.