History and Context of Public Administration in Hong Kong 247
executive leadership, successive policy, and administrative failures revealed major deficiencies in the capacity-cum-legitimacy of the state and brought the approval rating of the government to an all-time low (Lee 1999).
These economic-cum-political crises revealed deep-seated problems in the political and economic institutions of the postcolonial era. The Asian financial crisis signified the end of the economic miracle and ended decades of continuous economic growth. In a way, it ended the myth of “financial conservatism,” or the myth that low tax rates and high economic growth will continue to support an expansion in public spending on social programs to satisfy the public’s need for adequate public service. The monopoly of policymaking power by the civil servants is increasingly challenged by a civil society of growing strength and a citizenry demanding more public input and accountability in the policy process. In short, the postcolonial state has lost its “performance legitimacy” on both the political and the economic front.
An equally important aspect is the changing relationship between central government and the HKSAR. In the first few years after the handover of sovereignty, central government did adopt a more hands-off policy toward Hong Kong, and understood such non-interference as the essence of “a high degree of autonomy” as promised under the “one country, two systems” arrangement. However, since the worsening governance crisis culminated in the eruption of a mass rally in 2003, central government has taken a more hands-on approach, and has actively intervened in Hong Kong’s political and economic development (Ching 2009). Instances of political intervention range from offering material support to their preferred candidates in local elections, putting Hong Kong’s democratization on hold, to more serious allegations of plans to set up “a second center of governance” comprising “local patriotic forces.” Economic intervention ranges from policies to revive Hong Kong’s economy to active measures to promote economic integration between Hong Kong and the regional cities. While some of these measures have helped Hong Kong weather the economic downturn, they have also made the city more dependent on central government if not more susceptible to the latter’s control.
In sum, while democratization is considered necessary to resolve the governance crises adequately for a postindustrial society that has already attained advanced socioeconomic development, the Beijing government has been indefinitely delaying democratization in Hong Kong.4 A major characteristic of the administrative reforms in this period reflect the attempts of the postcolonial state to deal with these crises situations in the absence of democratization.
12.6.2 Major Institutional Development
Since the handover, a series of NPM-type reforms has been carried out. As Lee and Haque (2006) argue, the significance of these reforms for the Asian states has to be understood in the contexts of their particular macroeconomic factors, political systems, and state traditions. Reforms such as public-private partnership have been attempted to strengthen the state’s capacity in economic management. Such projects include the Cyberport project, Disneyland, and the West Kowloon Cultural District Project, in which the government collaborated with businesses in an attempt to strengthen Hong Kong’s economic competitiveness. Measures such as outsourcing,
4In December 2007, the Standing Committee of the National People’s Congress (SC/NPC) announced that Hong Kong would elect its chief executive through universal suffrage in 2017, while the direct election of all seats of the Legislative Council would take place in 2020 at the earliest. While this schedule offers the possibility of belated popular elections in Hong Kong, the SC/NPC’s announcement has not alleviated the public’s suspicion that the elections will be controlled rather than be truly free.
©2011 by Taylor and Francis Group, LLC
248 Public Administration in Southeast Asia
corporatization, and privatization of public service, as well as civil service reform, were used to contain the size of the public sector and preserve the practice of financial conservatism. There has been more emphasis on performance, productivity, and accountability as ways to cope with rising popular aspiration through inculcating a public service culture. The adoption of cost containment and recommodification measures in social policy indicated retrenchment in social spending as ways to reduce public spending.
These reforms have mixed results. Many of the public-private partnership projects have been criticized as government-business collusions and have not been politically well received by the public. The outsourcing of municipal service has invited complaints about the inadequacy of contract management from the government, including complaints over the quality of the service, the protection of labor rights, and others. Measures to contain the size of the public sector (by reducing the number of civil servants and their remuneration) and attempts to further overhaul the public personnel system were made in the consultative document entitled Civil Service into the 21st Century, in which ideas of performance pay and the widespread use of contract staff were proposed. The civil service unions met these ideas with strong resistance and they have not been successfully implemented. In financial management, since the early 2000s, government departments have switched to one-line-vote (block grant) as the budget model. In the areas of social provision, education, health care, and social service have experienced budget cuts. In public housing, the government announced the indefinite cessation of the Home Ownership Scheme, and set out to privatize all public housing, car parks, and shopping malls as a way to generate funding for the Housing Authority.
In 2002, the Principal Officials Accountability System (POAS) was officially launched by Chief Executive Tung Chee-Hwa when he commenced his second term. Somewhat deviating from the intent of the Basic Law drafters to preserve a system of bureaucratic dominance, this reform is of far-reaching significance as it practically moves Hong Kong’s political system toward a ministerial system. Under POAS, all principal official positions are no longer employed on civil service terms, but on non-civil service contractual terms instead. The change was adopted in the hope that it would improve the governance problems in the HKSAR after a series of policy and administrative failures that had led to massive discontent and a plunge in the approval rating of the chief executive, Tung Chee-Hwa. The new system also gives the chief executive a freer hand to bring in people from outside the civil service to become members of their own teams.
As Cheung (2003) states, with the implementation of POAS, for the first time in Hong Kong’s history, there will be a political leadership team manned by full-time politicians. At the same time, it is still unclear how the institution of executive leadership will develop. For one thing, the administrative officers have been heavily relied on as a source of principal officials. With the appointment of a former administrative officer, Donald Tsang, as the successor of Tung CheeHwa (who was asked to step down by the Beijing government in the middle of his second term due to unsatisfactory performance), the tone seemed even more set for civil servants to be the major source of political leaders in the distant future. The latest development was the introduction of politically appointed undersecretaries and political assistants, which the chief executive claimed to be measures to consolidate the political accountability system and nurture political talents. The increase in appointees further invites criticism from the public (especially the democratic camp) that such a system will only provide opportunities for political patronage. In sum, it is widely felt that in the absence of a democratic system, the ministerial system will only empower the chief executive to increase control over administrative officials rather than enhance the political accountability of the government.
© 2011 by Taylor and Francis Group, LLC