country had made an awesome investment in physical capital investment as a share of output rose from 11 to more than 40 percent Even without going through the formal exercise of growth accounting, these numbers should make it obvious that Singapore's growth has been based largely on one-tim changes in behavior that cannot be repeated. Over the past generation the percentage of people employed has almost doubled; it cannot double again. A half-educated work force has been replaced by one in which the bulk of workers has high school diplomas; it is unlikely that a generation from now most Singaporeans will have Ph D.s. And an investment share of 40 percent is amazingly high by any standard; a share of 70 percent would be ridiculous. So one can immediately conclude that Singapore is unlikely to achieve future growth rates comparable to those of the past But it is only when one actually does the quantitative accounting that the astonishing esult emerges: all of Singapore's growth can be explained by increases in measured inputs. There is no sign at all of increased efficiency. In this sense, the growth of Lee Kuan Yews Singapore is an economic twin of the growth of Stalins Soviet Union-- growth achieved purely through mobilization of resources. Of course, Singapore today far more prosperous than the U.S.S.R. ever was--even at its peak in the Brezhnev years-- because Singapore is closer to, though still below, the efficiency of Western economies The point, however, is that Singapore's economy has al ways been relatively efficient;it just used to be starved of capital and educated workers Singapore's case is admittedly the most extreme. Other rapidly growing East Asian economies have not increased their labor force participation as much, made such dramatic improvements in educational levels, or raised investment rates quite as far Nonetheless, the basic conclusion is the same: there is startlingly little evidence of improvements in efficiency. Kim and Lau conclude of the four Asian"tigers"that"the hypothesis that there has been no technical progress during the postwar period cannot be rejected for the four East Asian newly industrialized countries. "Young, more poetically notes that once one allows for their rapid growth of inputs, the productivity performance of the"tigers"falls"from the heights of Olympus to the plains of Thessaly This conclusion runs so counter to conventional wisdom that it is extremely difficult for the economists who have reached it to get a hearing. As early as 1982 a Harvard graduate student, Yuan Tsao, found little evidence of efficiency growth in her dissertation on Singapore, but her work was, as Young puts it, "ignored or dismissed as unbelievable When Kim and Lau presented their work at a 1992 conference in Taipei, it received a more respectful hearing, but had little immediate impact But when Young tried to make the case for input-driven Asian growth at the 1993 meetings of the European Economic Association he was met with a stone wall of disbelief These figures are taken from Young, ibid. Although foreign corporations have played an important role in Singapores economy, the great bulk of investment in Singapore, as in all of the newly industrialized East Asian economies has been financed out of domestic savings7 country had made an awesome investment in physical capital: investment as a share of output rose from 11 to more than 40 percent.6 Even without going through the formal exercise of growth accounting, these numbers should make it obvious that Singapore's growth has been based largely on one-time changes in behavior that cannot be repeated. Over the past generation the percentage of people employed has almost doubled; it cannot double again. A half-educated work force has been replaced by one in which the bulk of workers has high school diplomas; it is unlikely that a generation from now most Singaporeans will have Ph.D.s. And an investment share of 40 percent is amazingly high by any standard; a share of 70 percent would be ridiculous. So one can immediately conclude that Singapore is unlikely to achieve future growth rates comparable to those of the past. But it is only when one actually does the quantitative accounting that the astonishing result emerges: all of Singapore's growth can be explained by increases in measured inputs. There is no sign at all of increased efficiency. In this sense, the growth of Lee Kuan Yew's Singapore is an economic twin of the growth of Stalin's Soviet Union-- growth achieved purely through mobilization of resources. Of course, Singapore today is far more prosperous than the U.S.S.R. ever was--even at its peak in the Brezhnev years-- because Singapore is closer to, though still below, the efficiency of Western economies. The point, however, is that Singapore's economy has always been relatively efficient; it just used to be starved of capital and educated workers. Singapore's case is admittedly the most extreme. Other rapidly growing East Asian economies have not increased their labor force participation as much, made such dramatic improvements in educational levels, or raised investment rates quite as far. Nonetheless, the basic conclusion is the same: there is startlingly little evidence of improvements in efficiency. Kim and Lau conclude of the four Asian "tigers" that "the hypothesis that there has been no technical progress during the postwar period cannot be rejected for the four East Asian newly industrialized countries." Young, more poetically, notes that once one allows for their rapid growth of inputs, the productivity performance of the "tigers" falls "from the heights of Olympus to the plains of Thessaly." This conclusion runs so counter to conventional wisdom that it is extremely difficult for the economists who have reached it to get a hearing. As early as 1982 a Harvard graduate student, Yuan Tsao, found little evidence of efficiency growth in her dissertation on Singapore, but her work was, as Young puts it, "ignored or dismissed as unbelievable." When Kim and Lau presented their work at a 1992 conference in Taipei, it received a more respectful hearing, but had little immediate impact But when Young tried to make the case for input-driven Asian growth at the 1993 meetings of the European Economic Association, he was met with a stone wall of disbelief. 6 These figures are taken from Young, ibid. Although foreign corporations have played an important role in Singapore's economy, the great bulk of investment in Singapore, as in all of the newly industrialized East Asian economies, has been financed out of domestic savings