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SINGAPORE’S DEVELOPMENT POLICIES 387

that the competition could even lead to inter- In a business sense, this differential advan-
state conflicts, especially since there would tage might be achieved through offering
be tremendous domestic political pressure better prices, selecting advertising appeals,
for governments to deliver development and/or product improvements and innovations.
(Thomas, 2000). On the other side of the Some even suggest that a good reputation
debate, some – particularly agencies such and earned trust can be advantageous as well.
as the United Nations Commission for Economic agents understand that business
Trade and Development (UNCTAD), the success comes not just from achieving
International Monetary Fund, the World competitive advantage but from sustaining it
Bank, the Asian Development Bank, as well over time.
as ‘pro-globalization’ academics – argue that A natural consequence of competition is
competition encourages states to ‘improve conflict. Here, ideas from Park and Burgess
themselves’ so as to be attractive to potential from the 1920s, are still relevant:
investors. For example, states might invest in [Competition and conflict] are forms of interac-
providing mass education locally, so as to tion, but competition is a struggle between indi-
‘improve the quality of human resources’, viduals, or groups of individuals, who are not
which might in turn be attractive to foreign necessarily in contact and communication; while
conflict is a contest in which contact is an indis-
investors seeking qualified workers. This
pensable condition. Competition, unqualified and
process could potentially be a ‘win–win’ uncontrolled as with plants, and in the great
situation for the foreign investor and the local impersonal life-struggle of man with his kind and
population. with all animate nature, is unconscious. Conflict is
always conscious, indeed, it evokes the deepest
emotions and strongest passions and enlists the
greatest concentration of attention and of effort.
Both competition and conflict are forms of strug-
UNDERSTANDING COMPETITION gle. Competition, however, is continuous and
impersonal, conflict is intermittent and personal
In order to understand the focus of this chapter – (Park and Burgess, 1969 [1921]: 236).
inter-governmental FDI competition – it is Implicit in the conceptualization is the
necessary to revisit some of the basic dynam- notion that competition is a ‘zero-sum’game,
ics of general business competition which where there are only winners and losers.
take place under regular ‘market’ structures. Interestingly, Park and Burgess also offer
In this market, FDI is set as the main com- another concept that is particularly useful to
modity being ‘traded’. Therefore, in such a this analysis, the idea of ‘competitive cooper-
conceptualization, potential investor firms are ation’ (Park and Burgess, 1969 [1921]: 188).
viewed as ‘customers’, which demand The basic notion is that although economic
resources or market access, while states are agents are often viewed as self-interested
viewed as the supplying ‘clients’. While it is parties, they are also strategic creatures that
true that there obviously will be competition will plan and forecast whether cooperative
between customers (i.e., transnational corpo- arrangements with other agents, often com-
rations), this chapter seeks only to understand petitors, might lead to outcomes which are
and explain competition between ‘clients’ more beneficial to ‘going alone’. Cooperation
(i.e., governments). among competitors can take on many forms,
The key to understanding this form of from the informal (strategic alliances) to
competition is the concept of ‘competitive the very formal (legally binding equity joint
advantage’, which suggests that all economic ventures).
agents should strive for unique characteristics At the very same time, it is important to
(‘differential advantages’) in order to distin- note that conflict is inherent in any form of
guish themselves from other agents in competition. From their somewhat function-
the eyes of the customers (Alderson, 1965). alist perspective, they argue that conflict is