The Public Service Division (PSD) of Singapore is currently reviewing a research paper published by a US-based non-profit that alleges civil servants disproportionately purchased homes near planned Mass Rapid Transit (MRT) stations prior to public announcements. The PSD has stated it is examining the data and methodology underpinning the academic working paper and will refer any findings suggesting misconduct to the Corrupt Practices Investigation Bureau (CPIB) if warranted.

The working paper, titled “Do Social Norms Substitute for Enforcement? Evidence from Public Officials’ Home Purchases in Singapore,” was released in September by the National Bureau of Economic Research (NBER), a private research organization based in Cambridge, Massachusetts. The paper was authored by Maspiz Piskorski of Columbia University, Amit Seru and Chun Zhao of Stanford University, and Jian Zhang from the University of Hong Kong.

The researchers sought to investigate whether informal social norms can replace formal enforcement mechanisms in curbing public officials’ misconduct. Focusing on housing transactions surrounding MRT expansions, the study linked private property purchases from legal filings to civil servant identities using the Singapore Government Directory Interactive (SGDI) database. The authors concentrated on transactions occurring near MRT stations that were planned but not yet publicly announced, particularly within one to two years before such announcements.

According to the paper, civil servants exhibited significantly higher purchase intensity near these sites compared to a control group of non-civil servants matched on demographic and housing consumption characteristics. This pattern was most pronounced among mid-level officials and those employed in agencies connected to rail planning. The study also identified increased purchases among relatives or co-registrants at addresses linked to civil servants, suggesting potential information leakage.

Using regression analyses, researchers estimated approximately 113 excess housing purchases by civil servants near planned MRT stations within two years preceding announcements, valued at around S$138 million. For relatives of civil servants, about 108 excess purchases were identified within three years before announcements, with an estimated value of S$132 million. Combined, these figures suggest roughly 221 excess purchase incidences totaling approximately S$270 million. The authors emphasized these estimates reflect statistical excesses in purchase activity rather than identified individual cases of wrongdoing.

As a robustness check, the study examined Housing and Development Board (HDB) resale flats—properties subject to eligibility and resale restrictions—and found no evidence of increased pre-announcement purchases by civil servants relative to controls, bolstering the specificity of their findings to private properties near MRT projects.

The study further noted the timing of purchases aligned with investment-driven behavior, including earlier sales within one to eight years post-purchase and positive returns relative to comparable properties. The concentration of activity among mid-level officials was attributed to their balance of sufficient resources and lower expected oversight compared to senior staff.

Additionally, the authors compared purchase patterns of civil servants to other groups possessing property market insights, such as licensed real estate agents and corporate board members, finding no similar trends. This absence supported the conclusion that civil servants’ behavior reflected access to non-public information rather than advanced analysis of publicly available data.

The paper highlighted a marked change following regulatory tightening around 2011, including amendments to the Securities and Futures Act in 2012. After these reforms, there was no significant increase in informed purchases by civil servants or their relatives, suggesting enhanced enforcement effectively curtailed such conduct.

The PSD, which operates under the Prime Minister’s Office, reiterated its firm commitment to upholding integrity and transparency in the civil service. It has indicated that any credible allegations of misconduct arising from the review will be investigated thoroughly. Several academics named in the paper as contributors have since requested removal of their names, stating they were unaware of the manuscript’s existence prior to its release.