The Transfer of Property Rights from the Public to the Private Sector in Hong Kong: A Critical Assessment

Abstract

The privatization idea may have lost some of its luster in recent years, but it remains relevant in today's socio-economic environment and is pursued consistently in industrialized and industrializing countries alike. Hong Kong has followed the general pattern in a manner reflecting its particular circumstances and its institutional modus operandi. The underlying logic may not appear highly compelling, from a short-term perspective, yet there are sound grounds for approaching the task positively, if viewed from a multi-year standpoint. Rather surprisingly, for such a quintessentially capitalist society, Hong Kong has not confronted the privatization challenge astutely on the political front and has handled it somewhat mechanically in managerial terms. The benefits to the community may have thus been more modest than one could legitimately expect, given the historical backdrop.

The political economy of loose regulation: modernity meets tradition in Hong Kong

“…There has also been selective privatization and commercialization of public housing in the territory. Two other developments worth highlighting are the establishment of the Housing Authority (HA), an "independent" organization responsible for managing all public hospitals in Hong Kong (it remains accountable to the government through the Secretary for Health and Welfare), and the Electrical and Mechanical Services Trading Fund, an entity which operates as an integral part of the bureaucratic machinery but on a commercial basis (it qualifies as a variant of "contracting in," as distinct from "contracting out" ;Rabushka 1973;Rabushka 1976;Rabushka 1980;Woronoff 1980;Cheng 1982;Youngston 1982;de Mesquita et al 1985;Peebles 1988;Ho and Chau 1989;Mushkat 1990;de Mesquita et al 1996;Lethbridge and Ng 2000;Jao 2001;Ash et al 2003;Mushkat and Mushkat 2006a;Wan et al 2007).…”

“…The strategy of positive non-interventionism, articulated by visionary financial secretaries more than a quarter of a century ago (initially by John Cowperthwaite in 1971 and more emphatically by Philip Haddon-Cave in 1980), has not been diluted significantly and continues to serve as a roadmap for the current generation of policy makers. Given this backdrop, Hong Kong may be less concerned about public-private economic imbalances than other countries/ territories and less tempted to tinker with the established institutional architecture (Rabushka 1973;Rabushka 1976;Rabushka 1980;Woronoff 1980;Cheng 1982;Youngston 1982;de Mesquita et al 1985;Peebles 1988;Ho and Chau 1989;Mushkat 1990;de Mesquita et al 1996;Lethbridge and Ng 2000;Jao 2001;Ash et al 2003;Mushkat and Mushkat 2006a;Wan et al 2007).…”

“…Beleaguered consumers and investors retreated into their shells in the face of these pressures and the government resorted, willingly or otherwise, to counter-cyclical remedies (again, primarily fiscal in nature, because of the monetary constraints imposed by the linked exchange rate system) in order to stabilize the economy. The relationship between private initiative and bureaucratic response has inevitably undergone at least a mild transformation in the process (Jao 2001;Lethbridge and Ng 2000;Ash et al 2003;Mushkat and Mushkat 2006a;Mushkat and Mushkat 2006b;Wan et al 2007).…”