The economic development of Singapore under the leadership of Lee Kuan Yew and those with whom he worked is famous as one of the greatest success stories in history. Singapore has become the only Asian country to achieve a higher per capita gross domestic product than the United States by every measure. To have achieved this from the starting point of a third world country, and during a single lifetime, is a true Asian "economic miracle" meriting close study by every country, and above all by every developing country. This naturally includes China. What, therefore, were the fundamental mechanisms explaining Singapore's stunning economic success?

To start with the facts, by 2013, the latest year for which World Bank data is available, Singapore's per capita GDP was 104 percent of that of the U.S., calculated at current exchange rates. Calculated at Parity Purchasing Powers, Singapore's GDP was 148 percent of that of the U.S. This after Singapore's per capita GDP was less than one quarter that of the U.S. in terms of PPPs - and less than one sixth measured at current exchange rates - when it achieved independence in 1965.

In obituaries of Lee Kuan Yew and during his lifetime, emphasis has been placed on his "authoritarian" politics or his espousal of "Confucian values," but what in strictly economic terms was the basis of Singapore's sensational success? Obviously, this is the topic of greatest interest to every developing country. If China could achieve Singapore's level of per capita GDP, higher even than that of the U.S., the "Chinese Dream" of economic development would be more than achieved. What lesson, therefore, can China and every country draw from Singapore's "economic miracle?"

Singapore was a classic example of the success of an "open economy:" Singapore's total trade is indeed considerably higher than its GDP. This is, of course, in line with the ideas behind China's "opening up" policy. But every study shows that Singapore's domestic development was based overwhelmingly on the huge accumulation of capital and labor, with only a tiny contribution coming from productivity growth (technically known as Total Factor Productivity, or TFP).