Singaporean Exceptionalism: The Power and Precarity of a Modern City-State

On May 12, 1797, the Doge of Venice, Ludovico Manin, abdicated. The Great Council, the primary legislative body, voted overwhelmingly to dissolve the Most Serene Republic. Two days later, Napoleon marched in with his troops and raised the French tricolor over the Piazza San Marco. After 1,100 years, Venice, the center of a maritime juggernaut that had rivaled the greatest empires of the world, fell without a shot fired.

The decline of Venice was not caused by any single catastrophe, natural or man-made. Venice fell because it had grown irrelevant—economically sidelined, diplomatically isolated, and politically ossified. The discovery of the Americas in 1492 by Christopher Columbus and the rounding of the Cape of Good Hope by Vasco da Gama pushed Europe's maritime focus towards the Atlantic. Mercantile values faded among the ruling nobility, and governance became increasingly risk-averse. The assemblies that once made up its lauded administration failed to provide the flexibility needed to respond to the French Revolutionary Army at the gates. The fall of Venice marked the twilight of city-states in modern Europe, echoing the fall of Syracuse in the Classical Era.

City-states are an anomaly in a world of nation-states. So much so that only three fully sovereign city-states remain: Singapore, Monaco, and Vatican City. Of these, Singapore, with its high population, strong military, and large, developed economy, stands alone as the "world's only fully functioning city-state". Singapore's success, coupled with a globally admired government, has made it a power reminiscent of the city-states that have captured our historical consciousness, such as Venice, Carthage, and Athens.

Yet, for all its strengths, it is not invulnerable.

Understanding the City-State Model

A city-state is a political entity that consists of a city and its surrounding territory. Crucially, the city-state is sovereign over its territory, and is not subordinate to external powers. With its small geographic area and total urbanization, city-states can leverage several unique advantages.

Firstly, while many cities in larger countries have their own local governments (especially in the case of autonomous cities such as Hong Kong or Dubai), city-states, due to their complete sovereignty, can manage all aspects of governance, which facilitates targeted and efficient policy that, ideally, more closely resembles the wishes of the population. The smaller size of the governing institutions also encourages nimble, flexible governments that can respond to crises and innovate rapidly. Venice, in its golden age, introduced financial innovations such as sovereign debt markets (the prestiti system) and maritime insurance in response to problems the state and the people had faced. When Persia invaded Greece in 480 BC, the city-state of Athens displayed remarkable flexibility in evacuating its entire population, something that would not have been possible without the agility and cohesion of the city-state model.

Secondly, city-states, like other cities, can capitalize on the benefits of urbanization—namely economies of scale and economies of agglomeration. Economies of scale refer to cost efficiencies gained when production scales up. By providing a nexus for the factors of production, cities create significant value through economies of scale. Economies of agglomeration refer to benefits to firms that arise from close proximity to one another. For example, a large number of firms draws in a large number of potential employees, which helps lower labor search costs. Additionally, due to idea-sharing and competition, employee productivity can also increase. Think software engineers in Silicon Valley, or aspiring celebrities in Los Angeles.

Thirdly, city-states are compelled to be open. Necessity is the mother of invention, and city-states, by virtue of their small size, cannot produce everything they need on their own. With autarky infeasible, they are naturally outward-looking, becoming commercially efficient while also taking and improving upon the best foreign ideas. Their resulting role as neutral hubs for peoples, goods, and ideas also encourages diplomatic neutrality, avoiding alignment while maximizing opportunity. Singapore, positioning itself between East and West, is a prime example.

The City and the State: Singapore's Place in the World

Expelled from Malaysia in 1965, Singapore found itself on the same path as the city-states of old, charting an independent course in a world where the city-state model seemed obsolete. This anomalous status has made it difficult to compare Singapore's social and economic indicators with other regions.

Consider income inequality: Singapore has a Gini index of 0.437 in 2022 according to the Singapore Department of Statistics (SingStat). In comparison, the United States in 2022 was estimated to have a Gini coefficient of 0.413 according to the CIA World Factbook. The Gini coefficient is a measure of income inequality, where 1 corresponds to perfect inequality (i.e., one person earns all the income) and 0 corresponds to perfect equality (i.e., everyone earns the same amount)*. When comparing the countries to each other, Singapore has a higher income inequality than the U.S. However, comparing cities provides a fairer comparison—a recent study estimating the Gini coefficient for U.S. cities found that Atlanta, Georgia, the city with the highest income inequality, had a Gini coefficient of 0.5677. Even Waco, Texas, ranked 50th, had a Gini coefficient of 0.5049, still higher than Singapore's.

Cities thrive on competition, and with that comes an upward pressure on income inequality. Comparing the income inequality of a city-state such as Singapore to that of a nation with vast hinterlands and rural settlements is not wholly unfair, as citizens of a city-state have little choice regarding their participation in the competitive job market of a city. However, it does lack nuance, and I believe that this nuance is necessary when evaluating the social and economic success of a country.

In some domains, comparisons with countries remain appropriate. Military capability is a good example; Singapore possesses one of the most advanced armed forces in Southeast Asia, but this is not something that can be meaningfully compared to other cities, which do not typically maintain independent militaries. Ultimately, there is no perfectly fair comparison between any two things (except, perhaps, between a person and their past self). When we are forced to compare a city-state to other countries, the analytical framework we choose must consider multiple layers: comparisons between cities, between the countries, and between the historical and cultural contexts that shape each.

The State of the City: Lessons from the Fall of Venice

Despite the great developmental success Singapore has achieved over the past six decades, the former Prime Minister Lee Hsien Loong once described Singapore as “Sampan 2.0”, likening it to a small fishing vessel vulnerable to strong waves that could capsize it. This narrative of survival forms an integral part of our civic education, exemplified by the National Education (NE) message: "We must ourselves defend Singapore."

The historical context of this message is clear. Not only was Singapore expelled from Malaysia in 1965, but the British also fumbled the defense of Singapore against the Imperial Japanese Army during World War II, resulting in the largest military defeat of the British Empire with the surrender of over 80,000 soldiers in 1942. The NE message continues: "We are proud to defend Singapore ourselves, no one else is responsible for our security and well-being."

City-states, despite their advantages, inhabit a condition where thriving and surviving are equivalent. Militarily, they lack strategic depth due to their small size, and economically, they are unable to sustain a purely locally-driven economy due to the lack of a hinterland and a large population. To survive is to thrive; and to thrive is to survive.

Venice thrived, until it failed to survive. The historical fall of Venice offers an important case study in ensuring city-state longevity.

Firstly, Venice failed to adapt. The Age of Exploration turned Venice's geographic strengths into liabilities. As the centers of trade (and later colonialism) shifted to Western Europe, Venice was unable to adapt. When the world moves on, a city-state must reinvent itself, finding its place in a relentlessly competitive world. Singapore, like Venice, has an enviable geographic position and has forged its own niche in global trade and finance. How will Singapore evolve to face the challenges emerging from the eventual end of the Pax Americana?

Secondly, Venice suffered from a culture of risk aversion among its ruling elite. During its golden age, the elite consisted of merchants deeply intertwined with the entrepreneurial culture of the city-state. Slowly, over its 1,100 year history, the elite evolved into landed aristocrats. A watershed moment was the serrata (or 'lockout') of 1297, after which membership in the Great Council became purely hereditary. Departing from the fundamental city-state principles of openness and dynamism, the serrata and the subsequent ossification of the political structures of Venice resulted in a decline of innovation and economic competitiveness.

Stability without renewal leads to complacent fragility. How can Singapore continue sustaining the same spirit of renewal that has empowered it for the past sixty years?

Thirdly, Venice suffered from military underinvestment. City-states, with their unique, open diplomatic positioning, must rely on themselves to maintain a credible deterrent. Otherwise, they are at the mercy of larger countries, as their neutrality often limits access to defensive alliances. Venice had one of the greatest navies of medieval Europe, but by the 18th century, the Venetian Navy was reduced to a small naval corps that was ultimately absorbed into the French Navy in 1797.

Without large populations, and with a single, easily accessible population center, city-states must take up a more active role in their own defense. Will the Singapore military continue to uphold this ethos of strategic self-reliance in the decades to come?

The case of Venice teaches us that the fall of a city-state is rarely sudden. Oftentimes, it is a slow erosion of relevance, cohesion, and vision. Success and greatness must be continuously renewed, and leaders must sustain a spirit of boldness tempered by prudence. Can Singapore avoid the slow erosion that brought down Venice, or will vigilance give way to comfort?

Conclusion: To Be Exceptional

Singaporean exceptionalism is not defined solely by high rankings in various metrics of development. It arises from a successful reimplementation of the city-state model. The threat of deglobalization brings fresh challenges to small, open economies. In a world of geopolitical flux and economic disruption, the rise and fall of the city-states of old give us considerable insight—and perhaps, dare I say, hope. Venice endured for 1,100 years; Singapore is young by comparison. If Singapore can continue to adapt, renew, and lead, it may yet write a chapter that outlasts even the Most Serene Republic.

* Of course, the Gini coefficient is an imperfect measure of inequality, and empirical arguments in general lend themselves to cherry-picking and pedantry. For the sake of argument, let us assume that the Gini coefficient is a sufficiently appropriate metric for the purpose of comparing relative inequality.