MIT Golub Center for Finance and Policy
Economics
The Compacts We Need: Insights from President Tharman’s Miriam Pozen Prize Lecture
On December 9, 2025, the MIT Golub Center for Finance and Policy welcomed President Tharman Shanmugaratnam, President of the Republic of Singapore, to receive the Miriam Pozen Prize in recognition of his leadership in international financial policy and to deliver the Miriam Pozen Prize Lecture, “The Compacts We Need: Fiscal Choices and Risk Sharing for Sustained Prosperity.” In his lecture, President Tharman reflected on how today’s advanced economies increasingly display traits and vulnerabilities once associated with emerging market economies, as rising public debt and reduced fiscal space amplify exposure to systemic financial instability.
Drawing on lessons from the past, he argued that stabilizing public finances today cannot rest on the unique post-World War II set of conditions that helped reduce debt burdens at the time, including inflation and financial repression, nor on optimistic assumptions about productivity gains from AI. Instead, he emphasized the need for credible, politically sustainable adjustments paired with a deeper repurposing of fiscal policy, not merely cutting spending and raising taxes, but building new compacts that can restore optimism and preserve the social fabric. He framed this repurposing around three main reorientations: refocusing spending on public goods rather than primarily on individual benefits, shifting away from transfers aimed mainly at reducing inequality toward public schemes and risk sharing that relieve the economic insecurities that the poor and middle class view as central concerns, and moving fiscal and macroeconomic policy away from an overriding focus on smoothing the regular business cycle toward preserving the fiscal space needed to address major crises.
President Tharman also discussed practical applications of these new compacts in healthcare and retirement, touching on universal coverage, disease prevention and cost containment, and better designed collective approaches to retirement security.
WATCH THE Full MIRIAM POZEN LECTURE
READ THE TRANSCRIPT OF THE MIRIAM POZEN LECTURE
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