By Arielle John (Mercatus Center, George Mason University)
What lessons should policymakers draw from non-Western countries that have achieved prosperity? The question feels urgent and, at times, deceptively simple. One might expect economic growth to be a technical challenge—about institutions, capital, labor, incentives. But as Bryan Cheang’s Economic Liberalism and the Developmental State demonstrates, the deeper question is not just how countries grow, but what kind of societies they become in the process. His book invites a long-overdue complication of the so-called East Asian miracle by closely comparing Hong Kong and Singapore—two often-overlooked case studies that share key institutional features but diverge sharply in outcomes.
At the heart of Cheang’s project is a desire to “correct” dominant accounts of Singapore and Hong Kong’s post-war development trajectories, especially the tendency to lump them together as models of efficient technocracy or capitalist exceptionalism. Though both are city-states, ethnically Chinese, former British colonies, and trade-based entrepôts with high GDP per capita, Cheang insists they must be studied on their own terms. Using a combination of statistical indicators, original surveys, interviews, focus groups, and qualitative cultural analysis, he offers a thick comparative account of how their respective state-market arrangements shaped not only economic outcomes but the broader fabric of civil society, creativity, and democratic life.
Cheang’s central argument is twofold. First, Singapore’s reputation as a free-market success story is overstated. While it performs well on global indices of economic freedom, these rankings obscure the dominance of government-linked corporations (GLCs), state control over land and labor, and an industrial policy regime that crowds out indigenous entrepreneurship. Second, although Singapore outpaced Hong Kong in GDP growth across every decade since the 1960s, its performance on higher-order economic indicators—total factor productivity, innovation efficiency, and entrepreneurial dynamism—lags behind. Put bluntly: Singapore grew faster, but not necessarily better.
By contrast, pre-1997 Hong Kong, though messier and more volatile, fostered a freer economic culture with less state intervention, greater openness to dissent, and more space for indigenous innovation. Cheang is careful not to romanticize Hong Kong or ignore its inequalities and colonial baggage, but he argues persuasively that its bottom-up, permissionless culture produced a more organically innovative economy. If Singapore represents “perspiration-led” growth driven by capital mobilization, Hong Kong better exemplifies the “inspiration-led” growth that stems from entrepreneurial imagination.
A strength of the book lies in how seriously it takes the cultural underpinnings of economic development. Drawing on survey data collected via Pollfish and in-person outreach—comprising over 1,000 respondents across both cities—Cheang documents differences in risk-taking, political engagement, and creative aspirations. Singaporeans, he finds, are more likely to prefer salaried employment, value conformity, and report higher anxiety around authority.
Hongkongers are more inclined to pursue artistic careers, join protests, and express views critical of the state. These tendencies are not innate, Cheang argues, but emerge from institutional design: an authoritarian developmental state cultivates a docile, risk-averse citizenry, while liberal capitalism fosters a more entrepreneurial culture.
Nowhere is this divergence more striking than in the creative industries. In Singapore, the state funds and regulates the arts from above, often using culture as a tool of social engineering. Direct censorship is enforced through fines, bans, and legal restrictions on content deemed offensive to religious or national harmony. Indirect censorship occurs through selective funding and a climate of self-censorship. Cheang cites interviews with artists and arts administrators who describe the scene as “docile,” “precautionary,” and often inaccessible to those without elite ties.
Hong Kong, by contrast, historically followed a “light touch” approach. Although media owners have political connections and Beijing’s influence has increased in recent years, Cheang shows that the cultural sphere was long marked by bottom-up experimentation. The city’s film, music, and publishing industries not only employed more people and contributed a greater share to GDP, but also exported significantly more cultural goods. Survey data reveals stronger interest in arts careers, higher concert attendance, and greater parental support for creative professions—findings that suggest a more vibrant public culture and a less stifled creative class.
Importantly, Cheang doesn’t treat culture as a side note to economics; rather, he shows how it directly affects economic performance. Drawing on the work of Baumol, Litan, and Schramm, he argues that cutting-edge capitalism requires more than capital accumulation or state-led industrialization. It depends on “entrepreneurial capitalism”—a form of economic life driven by creativity, experimentation, and decentralized decision-making. Innovation, in this view, is not simply a product of R&D spending or patent filings (where Singapore appears strong), but of local capacity and willingness to take risks (where Singapore falls short). Much of Singapore’s innovation, Cheang shows, is driven by foreign firms and public institutions, with relatively little retained by local entrepreneurs.
What emerges from this analysis is a broader critique of the developmental state model. While Cheang acknowledges that state-led industrial policy can jumpstart growth, he warns that its long-term costs are often hidden: low productivity, suppressed entrepreneurship, and diminished adaptability. He writes: “Just as the Soviet Union’s impressive growth was overstated, and just as China’s performance has also been overstated, Singapore’s performance, typically viewed as a function of rapid GDP growth, has also been overstated.” Rather than measuring progress purely in terms of national income, Cheang urges us to consider economic freedom, innovation efficiency, and the quality of civil society.
This reframing of development economics is a valuable contribution. Cheang distinguishes between output maximization and efficiency maximization, and between growth through capital mobilization and growth through innovation. He joins a growing chorus of scholars who reject simplistic growth metrics and push for a more holistic account of what economic flourishing entails. As he writes, “Cutting-edge development requires not only the mobilisation of economic resources into specific industries, but also intangibles such as creativity, a disruptive mindset, and a permission-less culture daring to break the status quo.”
Still, the book raises questions it does not fully resolve. For one, while Cheang is right to disaggregate “economic growth,” he might have more fully interrogated the social and historical roots of the systems he critiques. How, for example, did British colonial legacies shape the institutions of Singapore and Hong Kong in distinct ways? What aspects of inherited legal frameworks, education systems, or migration patterns explain their divergent outcomes? A deeper engagement with postcolonial political economy might have enriched his cultural analysis.
Second, while Cheang takes care not to idealize Hong Kong, his comparative frame sometimes glosses over its internal tensions. Inequality, housing insecurity, and Beijing’s tightening grip all challenge the sustainability of Hong Kong’s model. Cheang mentions these concerns but does not fully address the question of whether Hong Kong’s pre-1997 liberalism could have endured without the same pressures for conformity that Singapore institutionalized. There is also the question of scale: how much of Hong Kong’s performance is replicable, and how much is path-dependent?
Finally, some of Cheang’s conclusions might overstate the link between artistic expression and economic competitiveness. While the creative industries are indeed important indicators of cultural freedom, one could argue that other sectors—like finance, technology, or education—also reflect and shape a nation’s innovative capacity. It is not always clear why, for Cheang, the creative class serves as the clearest proxy for high-quality growth. A broader theory of innovation might strengthen his claim.
Yet these concerns do not diminish the book’s significance. Cheang’s methodological pluralism—his triangulation of archival research, economic indicators, survey data, and cultural analysis—is impressive. He models a form of scholarship that resists disciplinary silos and simplistic binaries. Rather than asking whether states should intervene or not, he asks how they do so, with what cultural and economic effects, and at what cost. In doing so, he challenges both neoliberal triumphalism and developmental state romanticism.
More broadly, Economic Liberalism and the Developmental State is a timely intervention in debates about growth, governance, and the future of liberal capitalism. As more countries in Asia, Africa, and Latin America search for a viable development model, Cheang’s warning is clear: don’t confuse GDP growth with economic vitality. Look instead at the texture of everyday life, the freedom to dissent, the ability to imagine alternatives, and the institutions that allow people not only to survive but to create.
The book’s final chapters return to a core insight: that economic systems are embedded in political and cultural orders. Singapore’s success, Cheang argues, cannot be separated from its political paternalism and ideological discipline. Hong Kong’s dynamism, likewise, grew from a culture of skepticism and improvisation. These are not accidental byproducts—they are outcomes of design, habit, and history. The question is not whether one model is objectively “better,” but whether it aligns with a nation’s long-term aspirations: for growth, yes, but also for freedom, dignity, and self-direction.
In the end, Cheang leaves us with a powerful reminder: there is more than one way to grow, but not all forms of growth are equal. The challenge is to build systems that not only deliver prosperity but expand the space for human creativity and self-governance. That is a harder task—but a worthier one.