The Public Sector in Hong Kong

T
his book describes and analyses the role of the public sector in the
often-charged political atmosphere of post-1997 Hong Kong. It discusses
critical constitutional, organisational and policy problems and examines their

effects on relationships between government and the people. A concluding
chapter suggests some possible means of resolving or minimising the difficulties
which have been experienced.
Ian Scott is Emeritus Professor of Government and Politics at Murdoch
University in Perth, Australia and Adjunct Professor in the Department of Public
and Social Administration at the City University of Hong Kong. He taught at the
University of Hong Kong between 1976 and 1995 and was Chair Professor of
Politics and Public Administration between 1990 and 1995. Between 1995 and
2002, he was Chair Professor of Government and Politics at Murdoch University.
Over the past twenty-five years, he has written extensively on politics and public
administration in Hong Kong.
THE PUBLIC SECTOR IN HONG KONG
THE PUBLIC SECTOR IN HONG KONG
general readers who seek a better understanding of the complexities of the citys
government and politics.
Professor Anthony B. L. Cheung, President, The Hong Kong Institute of Education;
Member, Hong Kong SAR Executive Council.
Public Administration / Politics /

Hong Kong Studies
ISBN 978-962-209-172-6
9 789622 091726
Printed and bound in Hong Kong, China
ME
POLIC
Y
and should be read by government officials, politicians, researchers, students and
Ian Scott
systematic analysis of Hong Kongs state of governance in the post-1997 period
GOVE R N
Professor Ian Scotts latest book The Public Sector in Hong Kong provides a
THE PUBLIC SECTOR

IN HONG KONG
NT
PEOPL E
Ian Scott
00aPrelim(p.i-iv).indd 1
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For Christopher and Lindsay
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Hong Kong University Press
14/F Hing Wai Centre

7 Tin Wan Praya Road
Aberdeen
Hong Kong
Ian Scott 2010
ISBN 978-962-209-172-6
All rights reserved. No portion of this publication may be reproduced or
transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage or retrieval system, without
permission in writing from the publisher.
Secure On-line Ordering

http://www.hkupress.org
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
Printed and bound by Goodrich International Printing Co., Hong Kong, China
11/18/09 1:00:14 PM
Contents
List of Figures and Tables
vii
Preface
ix
Glossary of Abbreviations and Acronyms

1. The Public Sector: An Overview
Part I
The Constitution and Political Accountability
xiii
1
23
2. The Constitutional Framework
25
3. Accountability and the Political System
49
Part II
The Public Sector and Its Problems
67
4. The Civil Service: Structure and Functions
69
5. The Civil Service: Personnel Policies
95
6. The Public Sector Beyond the Civil Service
Part III
Policy Formulation and Implementation
119
147
7. Policy and the Budgetary Cycle
149
8. The Policy Process
175
9. Policy Implementation
201
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vi
Contents
Part IV
The Government and the People
229
10. Efficiency and Responsiveness
231
11. Rights, Complaints and Redress
257
12. The Public Sector and Its Future
289
Notes
307
Selected Bibliography
361
Index
385
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List of Figures and Tables
Figures
1.1
1.2
4.1
7.1
7.2

7.3
7.4
The Public Sector

Government, Market and Society
The Government Secretariat, 2008
Public/Government Expenditure as a Percentage of GDP
Rate of Growth of Gross Domestic Product by Percentage
Change in Real Terms
Revenue Profile, 20072008
Expenditure Profile, 20072008
2
4
72
155
156
156
159
Tables
2.1
3.1
4.1
4.2
4.3

4.4
5.1
5.2
6.1
6.2
7.1
7.2
7.3
7.4
7.5

7.6
Composition of the Legislative Council, 19912008

31
Principal Officials in the Tsang Administration, July 2008
5960
Bureaus and Departments in the Hong Kong Government, 2008
7475
Strength of the Twelve Largest Departments, 2008
75
Ranks and Establishment in the Police Force and in the Administrative
77
Grade, 2008
Establishment and Strength of the Civil Service, 19972008
88
Strength of the Civil Service by Gender and Terms of Appointment, 2008 100
Civil Service Pay Scales, 2008
105
Number of Advisory and Statutory Bodies, June 2005
125
128129
The Organisation of the Public Sector
The Budgetary Cycle
162
The Medium Range Forecast
163
Environmental Protection Department: Analysis of Financial Provision
165
Social Welfare Department: Analysis of Financial Provision
166
Total Public Expenditure: Year-on-Year Change 20072008 and
171
20082009
Total Public Expenditure by Percentage by Policy Area Group
172
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viii List of Figures and Tables
8.1
9.1
10.1
10.2

11.1
11.2
11.3
11.4
11.5
Selected Policy Issues: Problems of Process and Implementation

Typology of Policy Implementation Styles
The Patients Charter
Establishment of Social Services and Disciplinary Services Departments,
1997, 2008
Complaints and Representations to the Legislative Council, 19972008
Complaints to the Ombudsman, 1994, 19972008
Disposition of Concluded Complaints to the Ombudsman, 20032008
Complaints against the Police by Initial Categorisation, 20022007
Resolution of Allegations against the Police, 20022007
0cFigures(p.vii-viii).indd 8
195
206
245
249
266
274
281
282
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Preface
ince the retrocession to China in 1997, the public sector in Hong Kong has
experienced major problems and undergone significant changes. External pressures,
internal civil service reform measures and a political climate very different from that of
colonial times have contributed to uncertainty, a loss of direction, and relatively little
achievement in the resolution of perennial policy issues. Externally, the government
previously seemingly immune from budgetary shortfalls has been beset by periodic
economic downturns that have seen it move into deficit with all the difficult political
decisions that entails. It has also faced pressure from the sovereign power. Although
the degree to which the Chinese government intervenes in Hong Kong affairs varies,
often depending on its assessment of the national importance of the issue, it has been
most clearly evident in the restrictions which it has placed on the pace of democratic
development, in its interpretation of the Basic Law, and in its support for local political
parties and groups sympathetic to its position. While this has influenced the political
context in which the public sector works, the Chinese government has not overtly
intervened in the affairs of the civil service or of most other public sector organisations.

Internal reform measures have added to the turbulence. The immediate post-1997
emphases on greater managerial efficiencies and downsizing of the civil service have
now been scaled back but they have left a legacy of organisational and personnel
problems. The executives attempt to assert greater control over the civil service in the
name of accountability has yet to be fully worked through and may well cause more
disruption if the lines of command of the recent political appointments are not clearly
delineated. The extension of the accountability system within the government suffers
from the fundamental contradiction that the executive itself is appointed by the Chinese
government and is not directly accountable to the people of Hong Kong. Despite the
buffeting that the civil service has experienced from efforts to introduce more managerial
practices and greater political control, the administrative culture of the civil service
has proved to be remarkably resilient. It still possesses high administrative capacity in
carrying out the routine implementation of policies which have long been accepted by the
community. Where it faces difficulties is in formulating and implementing new policies.
Its low policy capacity stands in marked contrast to its administrative performance and
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Preface
there is a substantial backlog of issues that have been addressed but have subsequently
been abandoned or delayed.

The principal reason for policy shortcomings has been the rise of civil society and
the difficulty which the government has experienced in developing effective channels of
communication with grass-roots organisations and in meeting their demands, inter alia,
for universal suffrage and a directly elected Chief Executive. Hong Kongs institutional
framework allows for few mediating institutions between the government and the people.
Political parties are weak because they cannot win office and are unable, in consequence,
to aggregate demands or build credible policy platforms. They can provide no surety that,
even if they win control of the legislature, their platforms will be translated into policy.
For its part, the government makes policy, but it has no mandate from the people to do
so. Its policy agenda cannot be taken as a package which has been supported by the
electorate and it is, as a result, required to find elaborate justifications for its proposals. It
claims to act in the best public interest; to consult on major new initiatives; and to be as
efficient, responsive and responsible as possible. Some of those claims may be partially
true. But when faced with a sceptical population, most of whom want a democratically
legitimated government, they cut no ice. Each new proposal comes before an oftenrecalcitrant legislature and a highly critical public who are increasingly versed in the
art of ensuring that policies of which they do not approve do not succeed.

This book is an attempt to explain how the public sector has fared in this new
political and economic environment. It seeks to describe the constitutional, organisational
and policy problems that have confronted the public sector, to analyse the ways in which
the government has tried to deal with those problems, and to suggest possible means of
minimizing or resolving its difficulties. The research on which this book is based stems
from a long-standing interest in public administration in Hong Kong. In 2005, some of
the research findings were published in a book, Public Administration in Hong Kong:
Regime Change and its Impact on the Public Sector (Singapore: Marshall Cavendish),
comparing public administration in the colonial period with that after the handover. Two
years later, the book was out of print and Marshall Cavendish was no longer engaged in
academic publishing. I am grateful to Colin Day, the publisher of Hong Kong University
Press, who was interested in the suggestion that the Press might bring out a new and
revised book which would draw on the original work but which would focus more on
post-1997 problems.

I have been fortunate to be able to undertake research in a congenial and stimulating
environment. It has been my privilege and pleasure to teach at the graduate level in
both the Department of Politics and Public Administration at the University of Hong
Kong and the Department of Public and Social Administration at the City University of
Hong Kong. I have borrowed liberally from the excellent research on politics and public
administration that has been conducted by members of staff in both institutions. I am
grateful, too, to the graduate students of both departments, many of whom work in the
civil service or other parts of the public sector, whose presentations and dissertations
have been a rich source of information. Both departments are blessed with exceptional
support staff and they have been unfailingly helpful and resourceful when unexpected
problems arose.
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Preface
xi

Many serving and former civil servants and other public sector employees have
helped to update material for this book and to provide me with a perspective on the
problems that they face. I am especially grateful to those who agreed to be interviewed,
to members of staff in the Civil Service Bureau who answered my written queries and
to Alan N Lai who provided detailed comments on the chapter on the budget and the
policy process. I would like to thank also Brian Brewer, John Burns, Elaine Chan, Hon
Chan, Joseph CW Chan, Janet Cheng, Anthony BL Cheung, Peter TY Cheung, Linda
Chow, Tamara Dent and members of the Asia Research Centre at Murdoch University,
Mark Hayllar, Karen Kue, Adrienne LaGrange, Peter HL Lai, Danny Lam, Lam Waiman, Kanas Lau, Eliza Lee, James Lee, Joan Leung, Paul Morris, Margaret Ng, Martin
Painter, Jon Quah, Vanessa So, Dorothy Tam, Ian Thynne, Gavin Ure and HK Wong. This
book required help from many different people and I am grateful for all the assistance
I have received.

Finally, I have to thank my wife, Terry Lui, who not only provided critical comments
but also proof-read all the chapters. My son, Christopher, helped to solve most of my
computer problems and standardised the tables and my daughter, Lindsay, checked
the referencing and proved a stern critic of style and consistency. Needless to say,
responsibility for all the remaining mistakes is my own.
Ian Scott
January 2009
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Glossary of Abbreviations and Acronyms
BLDC
CAPO
CEPA
CFA
CSSA
DAB
EOC
EPP
GDP
GST
Hansard
HKIEd
HKEx
ICAC
IPCC
KCRC
KRAS
MPS
MRF
MTRC
NPC
OMELCO
POAS
PCO
PLC
PRC
PSC
SAR
SARS
0eGlossary(p.xiii-xiv).indd 13
Basic Law Drafting Committee

Complaints Against Police Office
Closer Economic Partnership Arrangement
Court of Final Appeal
Comprehensive Social Security Assistance
Democratic Alliance for the Betterment and Progress of Hong Kong
Equal Opportunities Commission
Enhanced Productivity Programme
Gross Domestic Product
Goods and Services Tax
Official Proceedings of the Legislative Council of Hong Kong
Hong Kong Institute of Education
Hong Kong Stock Exchange
Independent Commission Against Corruption
Independent Police Complaints Council
Kowloon-Canton Railway Corporation
Key Results Areas
Master Pay Scale
Medium Range Forecast
Mass Transit Railway Corporation
National Peoples Congress
Office of the Unofficial Members of the Executive and Legislative
Councils
Principal Officials Accountability System
Office of the Privacy Commissioner
Provisional Legislative Council
Peoples Republic of China
Public Service Commission
(Hong Kong) Special Administrative Region
Severe Acute Respiratory Syndrome
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xiv Glossary of Abbreviations and Acronyms
SCMP
SFC
UGC
South China Morning Post

Securities and Futures Commission
University Grants Committee
The Hong Kong dollar is pegged to the US dollar at 7.8 dollars to 1 US$. Unless
otherwise stated, all amounts are expressed in Hong Kong dollars.
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The Public Sector:

An Overview
he public sector may be defined as those government agencies and related

organisations that are funded by revenue raised from taxes, fees and charges or
from the sale of state-owned assets.1 The agencies include bureaus, departments, the
judiciary, funded statutory bodies, publicly-owned corporations, and fully or partlysubsidised organisations such as social welfare agencies, schools and universities.
They do not include private companies or voluntary associations. In Hong Kong, the
government agencies (the civil service) consist of the offices of the Chief Executive,
Financial Secretary and Secretary for Justice, twelve policy bureaus and almost 60
departments.2 In September, 2008, they employed 153,477 people, approximately 4% of
the labour force.3 A further 1200 people worked for the Independent Commission Against
Corruption (ICAC).4 The 70 related organisations, which range from small tribunals, to
statutory bodies such as the Hospital Authority, to very large public corporations such as
the Airport Authority, employ at least as many people as the civil service.5 There were,
in addition, eleven tertiary institutions which are partly funded by the taxpayer.
Government and the Public Sector

The Issue of Autonomy
In recent decades, the relationship between the government and the public sector
has become much more complex. Two factors, in particular, have contributed to this
complexity. The first is that many governments have given public sector organisations
outside the civil service a greater degree of autonomy. The second is that the delivery
of public goods and services has become, to a greater extent, a partnership between
government, the private sector and voluntary social organisations.

Under the influence of New Public Management doctrines, private sector practices
have been widely adopted in government which itself has been increasingly divided
into core government comprising important centralised functions such as finance,
security and overall policy-making responsibility and decentralised government
agencies or other public sector organisations which are often concerned with the delivery
of social policies such as education and healthcare. Underlying decentralisation is the
ch.01(p.1-22).indd 1
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The Public Sector in Hong Kong
notion that, if public sector organisations are given greater autonomy from central
control, they may be able to cut through red tape, deliver services in a more efficient
and cost-effective manner and better meet the needs of the public they serve.

Figure 1.1 shows a possible relationship between core government and the public
sector, assuming that power has been divested, in varying degrees, to decentralised public
sector organisations. The degree of autonomy of those bodies from core government will
depend on their functions, the extent of public funding, public perceptions of their need
for independence, and on the political circumstances which led to their creation. In many
cases, autonomy is limited to the performance of very specific functions. For example,
regulatory agencies, fully funded by government, may be set up to control, say, the stock
market or to protect consumers from inferior or dangerous products. These agencies have
autonomy in that they can administer existing legislation independently but they do not
make the ultimate decisions on what that legislation should be. Similarly, central banks
may be given autonomy to determine interest rates but they may need to work closely
with government and legislatures to co-ordinate economic policy. Whether the taxpayer
funds a service is an important determinant of the organisations autonomy. The greater
the level of funding, the more likely it is that government will seek to control it. With
some agencies, however, such as the Audit Office or the Ombudsman, governments
do set up fully funded, independent public bodies. In these cases, the function of the
organisation, to act as a check on government, overrides the fact that it is entirely paid
for by the taxpayer. Many governments also own public corporations which generate
their own revenue and which are intended to make profits. Public corporations usually
have greater autonomy than other public sector organisations although there are often
provisions for ultimate central government control.
Semi-autonomous
public bodies
Closely-controlled
public bodies
Core
Government
Market
Society
Figure 1.1 The Public Sector
ch.01(p.1-22).indd 2
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The Public Sector: An Overview

The Hong Kong governments relationship with the rest of the public sector should
be seen in the context of why power has been devolved to the public sector outside
the civil service in the first place. In Hong Kong, unlike many developed countries, the
reason for devolution of responsibilities often has little to do with the prescriptions of
New Public Management.6 It is not always about creating greater efficiency senior
civil servants are sometimes scathing about the way in which statutory bodies perform
but rather about political convenience or commercial practices. Where public sector
organisations have been set up, the Hong Kong government has usually sought to retain
a final say through membership on the board and in such matters as the appointment of
the Chief Executives of statutory bodies. The government is particularly concerned with
whether statutory bodies and public corporations are acting consistently with its overall
policy; it has argued, for example, that it has the right to intervene in tertiary institutions
to ensure that government policy is implemented.7 And, although the public transport
corporations, the Mass Transit Railway Corporation (MTRC) and the Kowloon-Canton
Railway Corporation (KCRC) operated on commercial principles, the government had
no compunction in initiating a merger of the two organisations.8 Where the government
has been scrupulous in respecting the autonomy of public sector organisations is where
they act a check on government itself. The Independent Commission Against Corruption
(ICAC), the Direct of Audit, the Ombudsman and the Privacy Commissioner have all
been able to fulfil their functions without overt interference from the government.
The Functions of the Public Sector

The principal function of the public sector is to provide goods and services for the
community. These goods and services9 could potentially cover the whole range of human
needs and desires, from education, to child care, to medical services, to clean air, to a
safe environment. But there are always questions about how these demands should be
met. Should the public sector provide most of the desired goods and services? What
role should the market and the private sector play? Should voluntary organisations be
involved in the provision of more services? Figure 1.2 illustrates a possible relationship
between government, market and the society.

Public goods and services provided by the government alone fall within the
unshaded area marked government while the shaded areas represent partnerships
between the government and market and government and voluntary organisations to
deliver services jointly. Figure 1.2 could be re-drawn to show a much smaller government
and a much larger market and/or society. Services could be divested from government to
the private sector or to voluntary organisations and government could be reduced to core
functions. Alternatively, Figure 1.2 could be re-drawn to show a dominant government
which provided most goods and services with a much smaller role for the market and
for autonomous societal organisations.

In Hong Kong, the philosophy of the government has always been, in the words
of the Chief Executive, Donald Tsang, Big Market, Small Government.10 In line with
this principle, it might be expected that most goods and services would be provided by
ch.01(p.1-22).indd 3
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Government
Market
Public goods and services

delivered bygovernment
and the market
Society

delivered by government,
market and society

delivered by government
and society
Figure 1.2 Government, Market and Society
the private sector or by voluntary associations. It is true that, in comparison with other
developed countries, public expenditure as a percentage of Gross Domestic Product
(GDP) is comparatively low; in 2008, it was about 19%11 whereas public expenditure
in most other developed countries is two to three times higher.12 That would seem to
imply that government in Hong Kong is a residual force, that it does not intervene
directly in either the market or society. As a recent Financial Secretary put it, reflecting
the views of his predecessors over the previous fifty years, market leads, government
facilitates.13 While there is some truth in this picture, it does not entirely convey the
full role played by the government and the public sector and the scale of the services
that they deliver to the public. Although public expenditure as a percentage of GDP is
low, it should be remembered that Hong Kong does not have an army or a significant
agricultural sector and that, because it is a small place, there are probably economies
of scale. Certainly, small government does not mean limited government. In fact,
the government is omni-present in Hong Kong. It intervenes in the economy in many
different ways, not simply to facilitate but also to regulate. It plays a critical role in the
delivery of services through the public sector and through social welfare agencies. And
it delivers frequent sermons, in the form of announcements of public interest, on how
its citizens ought to behave.
ch.01(p.1-22).indd 4
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How, then, should we characterise the role of the government in relation to the
private sector and to society? It has been suggested that we might see the Hong Kong
government as a developmental or capitalist government rather than as one which is
essentially a behind-the-scenes facilitator.14 In this sense, the government acts to preserve
the longer term interests of capitalism but does not necessarily act in the short-term
interests of capitalists.15 It may see the need, for example, to regulate the labour market
to some degree rather to permit firms to pay low wages in unsafe working conditions.
It may provide social services to satisfy citizens needs even if this does mean that the
funding comes in part from company taxation. Government in Hong Kong seeks to play
a proactive role in the economy. Very often, occasionally in contradiction of its own
professed principles and sometimes against the wishes of the business community, it
leads rather than facilitates. It does not always succeed in realising its agenda, however.
In recent years, particularly following a massive demonstration against the government
on 1 July 2003, its ability to introduce new policies has been considerably circumscribed.
It has faced effective opposition on the streets, in the courts, and in the media from civil
society organisations which do not believe that their interests are being fully recognised
in the present political system.

In the following pages, we consider in greater detail the ways in which internal
and external relationships and the political and economic environment have affected the
performance of the Hong Kong public sector. The purpose of the book is two-fold:
to describe and analyse the way in which the public sector works and to examine
its relationships with the market and with society; and
to assess the performance of the public sector measured against its claims to be
accountable, its capacity to formulate and implement policy, and its ability to deliver
goods and services efficiently and in a manner which is responsive to expressed
needs.
Initially, we examine the factors and defining events which have shaped the public sector
over time and which have contributed to its particular characteristics.
The Colonial Inheritance

Over the period 1841 to 1997, when Hong Kong was a British colony, the government
acquired organisational and policy-making characteristics and relationships with the
public that were designed to maintain political stability and to perpetuate colonial rule. In
1984, the Sino-British agreement sought to preserve many of these features in the posthandover political system and they were incorporated in the Basic Law which became the
constitution of the Hong Kong Special Administrative Region of the Peoples Republic
of China in 1997.16 The present structure of the government and the public sector
consequently owes much to its colonial origins. Although the political and economic
environment has changed considerably since 1997, the machinery of government retains
the form and functions that were characteristic of colonial administration. In addition,
the public sector organisations outside the civil service, many of which were created in
the last two decades before the handover, have remained in place.
ch.01(p.1-22).indd 5
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Organisational Characteristics
The principal organisational characteristics of colonial administration which were
inherited in 1997 were: centralised government; strong, hierarchically-organised,
departments; small government and fiscal frugality; recruitment by merit; political
neutrality; commitment to the rule of law; and clean government.

Centralised government was a feature of colonial administration from the outset. It
was centralised initially to maintain political control, because resources were limited, and
because, since it was a small territory, there was no immediate need for decentralisation.
There were partial exceptions to the rule with the acquisition of the New Territories in
1899 and with de facto devolution of responsibility to the District Commissioner for
the New Territories and his staff and to the Urban and Regional Councils.17 But these
bodies had only limited autonomy; their funding came directly from the government
and their policies were ultimately subject to its approval. Partly because government
was so centralised, the emergence of a public sector beyond the civil service was a
relatively late development. Even with the eventual establishment of many statutory
bodies outside the civil service the Housing Authority, the Hospital Authority and
the Airport Authority, for example the government reserved the right to intervene in
their operation and often sought to influence their policies and practices.

Consistent with centralised government, the departments, which were responsible
for policy implementation, were organised on strongly hierarchical lines. The Police
Force was established as a para-military body and retained that character until the final
years of colonial rule. Other disciplined services Correctional Services, Customs, Fire
Services, and Immigration were set up in similar fashion. Within the non-disciplined
departments, there was also considerable emphasis on hierarchy. The consequence was
that departments tended to develop autonomously from each other and to focus on topdown implementation rather than lateral co-ordination. While a strongly hierarchical
system was appropriate for maintaining political control, it was not entirely suitable
when the government, on the directions of an active Governor, Sir Murray MacLehose
(19711981), expanded education, housing, health and social welfare provision. In 1973,
the McKinsey consultants made recommendations for change which have been the basis
for the organisation of government since that time.18 The Secretariat was re-organised
into specific policy branches (later bureaus) with responsibility for a cluster of related
departments.19 The branches were headed by a senior civil servant, usually a member of
the elite administrative grade, which formulated policy that the departments were then
expected to implement.

Colonial government was expected to be small and to provide only minimal
services. Governments role was to maintain law and order and support the growth of a
capitalist economy. There was pressure from both the British government and from local
businessmen to ensure that there were no budget deficits and that all public expenditure,
and especially recruitment to new positions, was carefully scrutinised. Taxes were to
be kept low. These policies ensured that, rather than simply balancing the budget, the
government in fact began to accumulate large surpluses. Although small government
ch.01(p.1-22).indd 6
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remained an important formal objective, political and economic factors meant that
government eventually became a very large, complex and differentiated organisation with
a major impact on the market and on society. As the economy prospered, government
revenue from company tax and from the sale of land grew substantially. Political factors,
especially after the 19661967 riots and disturbances and during the transition to Chinese
rule, meant that expanded social services were necessary and were increasingly delivered
by the government or by organisations funded by it. By 1997, the strength of the civil
service establishment was 184,000.20 A further 180,000 were estimated to work in other
public sector organisations.21 Overall, the public sector employed approximately one in
nine of the labour force.

Until the Second World War, British expatriates occupied all the senior positions in
the colonial administration. The government thereafter adopted a policy of localization
whereby non-local officers would only be employed when there was no qualified local
candidate to fill the position. Localisation was nonetheless very slow. Even in the 1980s,
most of the directorate level positions and senior positions in the police force were still
held by expatriates. With the impending transfer of sovereignty, however, there was a
rapid acceleration of localisation so that, by 1997, there were only about 1200 expatriates
remaining in the civil service. Appointments and promotions in the civil service are
monitored by a Public Service Commission, established in 1950, which continued to
function after the handover.22

The concept of political neutrality was inherited from Britain where it meant that
senior civil servants would give advice to ministers without fear or favour and would
implement impartially any course of action which the minister decided to take. In the
fused system of Hong Kong, those holding the most senior positions were in effect both
ministers, taking the final political decision, and civil servants, advising themselves on
the most appropriate measures. The concept was adapted, accordingly, to mean that civil
servants would take decisions in the public interest and that, in some sense, they were
accountable to the public to act impartially in taking those decisions.23 Political neutrality
survived the handover, but it came under pressure from those who believed that civil
servants loyalty to political office-holders should override any notion of accountability
to a wider public.

The colonial government placed great emphasis on the rule of law although in
practice the tightly-knit relationship between the executive, the Legislative Council, the
civil service and the judicial system meant that the courts were not always as independent
as the government claimed. After the Tiananmen Square massacre in June 1989, the
maintenance of the rule of law became something of a mantra for those who feared that
the Chinese government would violate their civil liberties after 1997.24 The government
responded by passing a Bill of Rights in 1991 and by setting up statutory bodies that
protected individual rights. These included the Equal Opportunities Commission, the
Privacy Commissioner, and an ombudsman with strengthened powers, all of which
continued to function after the transfer of sovereignty.

Corruption was a perennial problem in the colonial administration. By the 1960s, it
was particularly prevalent in the police force where syndicates operated to extract bribes
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from drug traffickers, prostitutes, night club owners, taxi drivers and small businesses. In
1970, the government passed a more stringent corruption law, the Prevention of Bribery
Ordinance, but there was concern about how effectively it would be enforced since it was
still administered by the police.25 After a senior expatriate police officer, Peter Godber,
who had been charged with corruption offences, managed to escape from Hong Kong,
the government appointed a judge to investigate the circumstances of the escape and
the effectiveness of the ordinance.26 Godber was extradited, tried and convicted. The
Governor decided to remove the administration of the ordinance from the police and set
up the Independent Commission Against Corruption (ICAC) which began work in 1974.
The Commission eventually proved to be extremely effective in reducing corruption
in the public service to minimal levels and it has remained an important feature of the
post-handover system.
Colonial Policy Formulation and Implementation

The significant features of the colonial system of policy formulation and implementation
were: minimal basic functions provided by the government; social policy provision by
non-government organisations; policy formulation within very restricted circles; and
top-down policy implementation with a focus on outcome rather than process.

In the late 1970s, the economist Milton Friedman said that he thought the Hong
Kong government most closely resembled Adam Smiths prescription for the functions
of government in a capitalist system: that it should only be concerned with law and
order, the administration of justice and some public works.27 Friedman added a fourth
responsibility: that of protecting those who could not protect themselves.28 The description
does not entirely fit Hong Kong since the government, by that stage, was providing some
40% of the population with public housing29 and had also considerably expanded its
education, health and social welfare programmes and built three new towns in the New
Territories. But it does convey something of the ethos of the Hong Kong government.
The belief from the beginning of colonial times, which was supported by the British
government and businessmen, was that it was better that the Hong Kong government
should stick to the minimal functions that it did best and not become involved in social
policy provision which required both a different organisational structure and more direct
contact with the people.

The traditional government view was that social services should be provided by
voluntary organisations. It was prepared to give subsidies of various kinds, land as well
as grants, to churches and charitable organisations which provided the bulk of education
and health services.30 The structure of the government was not suited to social policy
delivery and, when it became directly involved in provision, reforms were necessary
to speed up decision-making and recruitment and to introduce more planning.31 While
the changes did improve performance, they did not resolve the problem of lateral coordination between strong government departments or provide solutions to long-standing
policy dilemmas. Housing and education were constant sources of concern. Healthcare
financing began to become problematic in the 1980s. And social welfare policy was
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politically contentious, caught between the belief, entrenched in policy, that the ablebodied should work and the views of social workers and unions that the government
had the means to fund more comprehensive social security benefits.

The colonial governments policy-making was conducted in-house in the Government
Secretariat. Occasionally, powerful Governors would take action after consulting only
a few senior civil servants. More often, policies would be devised after what amounted
to an extended conversation, conducted by memorandum, between the most senior civil
servants in the Secretariat. Some consultation would then take place with committees of
prominent figures, usually themselves appointed by the administration. Green papers,
usually with a clear indication of the governments preferred position, were sometimes
then distributed to the public for comment. Subsequently, a white paper containing
the definitive policy would be issued, the policy would be approved by the Executive
Council, and, if necessary, legislation would be passed by the Legislative Council.

The government saw policy implementation as a matter of targets which had to
be met on time and within budget. It was not particularly concerned with the process
of how these targets were achieved. Those opposed to its proposals were regarded as
obstacles to implementation. The government was sensitive to matters that might involve
traditional Chinese customs and practices but it was also prepared to act quite forcefully
when objectives had been set and there were deadlines to be met. In constructing public
housing and building the new towns in the New Territories, for example, squatters were
moved off the land, sometimes physically, to make way for the new estates. When the
estates in the new towns had been completed, it was discovered that insufficient attention
had been paid to the provision of social services and that, in their absence, people
were reluctant to move from other urban areas.32 This reflects the traditional colonial
attitude towards policy implementation. The focus was on the efficient and cost-effective
achievement of the objective. There was little consultation with those whom the policy
was designed to benefit; they were expected to be grateful recipients of whatever was
provided.
The Colonial Government and the Legitimation of Power

A major feature of the colonial governments relationship with the people was a
continuing legitimacy deficit and attempts to reduce it, inter alia, by claims that rule was
based on a tripod of consents; by arguing that the government had performed well; by
civil service reform; and by asserting that the government was accountable.

The government suffered from a legitimacy deficit throughout the period, principally
because, as a colonial regime, it had difficulty in generating consent for its rule. In
common with British colonies elsewhere, the Hong Kong government would have
preferred to rule with the support of traditional elites. On Hong Kong island, however,
there were hardly any people, let alone traditional leaders, when the occupation took
place. The first Chinese member was nominated to the Legislative Council in 1880.33
Thereafter, the government, through the boards of the District Watch Committee and the
Tung Wah and Po Leung Kuk charitable organisations, gradually began to incorporate
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10
Chinese elites into its decision-making processes. The implicit bargain was that in
exchange for direct access to government the elites would maintain social order.34
There was little interaction between the government and the majority of the Chinese
population. The system worked well enough until after the Second World War when
the population quadrupled within six years and new social problems meant that the
District Watch Committee was no longer as influential as it had been. There were riots
in 1956, which left 59 people dead, and again in 19661967.35 In 1966, the government
appointed a Commission to investigate the riots which found that there was a gap
between the government and the public, resentment towards the police, and the need
for labour reform and improvement in social services.36

Much of the next decade was devoted to bridging the gap, to reducing the legitimacy
deficit, and to generating more support for the system without introducing elections. A
variety of methods were employed. The governments rationale for exercising authority
was that it was based on a tripod of consents, the consent of the local people and
of Britain and China.37 This was a convenient myth since the consent of the people
could not be expressed through elections or any institutional mechanisms, the consent of
Britain was purely that of a colonising power, and the Chinese government had already
said that it would take Hong Kong back when the time was appropriate.

A more powerful argument was that the government deserved to rule because it
had performed well. It claimed credit for Hong Kongs economic prosperity which
saw GDP growth rates, for example, running at 12% per annum between 1976 and
1981.38 It also argued, implicitly, that it deserved to govern because it was able to
assess what people wanted and to deliver appropriate goods and services efficiently
and cost-effectively. Education, health and housing services had been in short supply.
Their rapid expansion in the 1970s satisfied considerable demand and gave some
credence to the argument that good performance generated support for the system.
But once those basic needs had been met, it became more difficult to use the same
means to reduce the legitimacy deficit.

In the 1990s, the government was faced with the problem that it could not change
the political system to increase the legitimacy of the government. The last Governor,
Chris Patten, did expand the franchise for the 1995 election but the political system
had been set in stone by the Sino-British agreement and by the Basic Law and could
not be changed to accommodate growing democratic sentiment. What the government
did instead was to provide the civil service with a more human face. Performance
pledges stressed service to the customer, offices were painted, and the police force was
reformed.39 The civil service benefited from changed public perceptions. It was seen
to be less distant than in the past, to be more efficient, and to be staffed by competent,
well-educated officers.

In the final years of colonial rule, the government made yet another attempt to
present itself as an accountable government. In 1995, it published a booklet entitled
Serving the Community in which it argued that accountability was the fundamental
principle which drives the public sector.40 Civil servants were seen to be accountable
in three respects. They were answerable to the Legislative Council, the Director of
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11
Audit, the Commissioner Against Corruption and the Commissioner for Administrative
Complaints (later called the Ombudsman); they were required to keep the community
informed of governments decisions and actions; and they were expected to provide,
within reason, access to information about these decisions and actions.41 This definition
of accountable government is perhaps most remarkable for what it excludes rather than
what it includes. The Legislative Council had no powers to dismiss the government if it
proved to be incompetent and the community was expected to serve only as the passive
recipient of information which the government deemed fit to give it. At the time of the
transfer of sovereignty in 1997, the government continued to subscribe to the version
of accountability presented in the Serving the Community document; the legitimacy
deficit remained a problem.
The Government and the Public Sector after 1997

The structure and functions of the government and public sector remained largely
unchanged after the handover. The most senior civil servants retained their positions as
Policy Secretaries (later called Directors of Bureaus) and the civil service was promised
conditions of service no less favourable than before 1997.42 Statutory bodies, for the most
part, continued to operate as they had done before 1997. There were, however, significant
differences in the interaction between the major executive, legislative and bureaucratic
institutions. Prior to 1997, the government had been unified and had worked closely with
other major institutions; after the handover, it became much more disarticulated with the
major institutions acting independently and often in an unco-ordinated manner.43

Even more important were the changes in the economic and political environment.
On 2 July 1997, the day after the new Chief Executive, Tung Chee-hwa, assumed office,
the Thai government decided to float the baht, an event which in Tungs opinion and
that of many economists triggered the Asian financial crisis.44 As the economy began to
slow, property prices plummeted and negative equity and unemployment began to rise.
Following the Asian financial crisis, another economic recession further damaged the
economy. By 2003, when an outbreak of atypical pneumonia, Severe Acute Respiratory
Syndrome (SARS), killed nearly 300 people and seriously affected many businesses,
the economy was reeling. Unemployment had reached a record 8.7%, some property
prices had dropped by as much as 70%, and bankruptcies had increased from 600 cases
in 1997 to 24,922 cases in 2003.45 The huge surpluses of colonial days were gone and
the budgetary deficit was seemingly spiralling out of control. The government blamed
external factors for the territorys problems. But many of its critics maintained that a
major reason was poor management. The governments credibility in managing economic
affairs had been significantly undermined.46

The political environment was equally volatile. The Chinese government dissolved
the Legislative Council immediately after the transfer of power and re-constituted it
without the democratic parties. When new elections under a more restricted franchise
were held in 1998, there was a substantial increase in turnout and democratic candidates
were returned to the Council. In 2003, the government, probably at the behest of the
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12
Chinese government, decided to introduce legislation to enact Article 23 of the Basic

Law which required that the Special Administrative Region should prohibit any act of
treason, secession, sedition, subversion against the Central Peoples Government47
The proposed legislation sparked concerns about civil liberties, in an atmosphere in
which there was already considerable disaffection with Tungs administration, and
eventually resulted in a demonstration against the government of an estimated 500,000
people on 1 July 2003.48 The national security legislation was withdrawn and Tung
eventually resigned in March 2005. However, this did little to improve either the
governments capacity to introduce new policies, which was severely constrained after
the demonstration, or to resolve the impasse over constitutional reform.

The effects of these changes on the organisation of the government and the public
sector, on policy formulation and implementation, and on the legitimation of power are
summarized below.
Organisational Characteristics
The major organisational characteristics of government and the public sector after 1997
were: continued centralisation of government and firm control of the remainder of the
public sector; the disarticulation of the major institutions; some largely unsuccessful
efforts at civil service reform; attempts to assert greater political control over the civil
service with the introduction of the Principal Officials Accountability System; and various
measures aimed at implementing a big market, small government policy.

The government remained highly centralised after 1997 and took steps to increase
its authority by abolishing the Urban and Regional Councils, which had an elected
membership, and by bringing the departments which had served those councils, the Urban
Services Department and the Regional Services Department, back into the mainstream
of government. Its rationale was that Hong Kong had no need for this middle tier of
government between the government and the District Councils although the decision may
also have been sparked by the failure of the Urban and Regional Services departments
to slaughter 1.2 million chickens effectively after an outbreak of avian influenza.49 The
government showed, too, that it did not regard the remainder of the public sector outside
the civil service as autonomous, intervening in their affairs and seeking to bring them
into line if there were any inconsistencies with government policy.

The Basic Law provided for a government that was more articulated and less fused
than it had been under colonialism. The political office-holders, the Chief Executive
and the Principal Officials, were clearly intended to be separated from other senior
civil servants who were not appointed by the Central Government but who might be
designated by them to speak on behalf of the government to the elected members of
the Legislative Council.50 Soon after the handover, there was an evident political divide
between senior civil servants and the Chief Executive and some of his advisers on the
Executive Council and in the Electoral College. Some of Tungs advisers and some
Chinese government officials believed that the civil service, having served a British
administration, was not entirely to be trusted.51 The Executive Council, which had
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13
previously usually approved the measures proposed by senior civil servants without much
dissent, now became a potentially hostile forum, sometimes pushing its own uncosted
political proposals. The close-knit collaboration between Governor, Executive Council,
and the senior civil service that had characterised colonial rule began to dissipate. There
were also problems in the relationship between senior civil servants and the Legislative
Council with members of all parties in the Legislative Council becoming concerned
that the government was using them as a rubber stamp, failing to brief them properly,
and expecting legislation to be passed quickly without appropriate review. There were
also the problems between the government and the courts over who should have right
of abode in Hong Kong and over the interpretation of the Basic Law. The result was a
system that was disarticulated and which lacked unity and co-ordination in its decisionmaking.52

In 1999, the Chief Executive launched a reform programme which was intended
to improve efficiency in the civil service and to change some of the fundamental
assumptions on which it was based.53 There had been some evidence of inefficiencies,
including the botched slaughtering of the chickens, a public housing corruption scandal
and the chaotic opening of the new airport, for which the civil service bore some
responsibility.54 But there was also the notion that it should become more like the private
sector with more civil servants on contracts, performance pay, and enhanced performance
management systems. If the reforms had been implemented in their entirety, it would
have fundamentally undermined the principle that the civil service should be based
on a permanent establishment with fixed salary scales. But the government was only
partially able to implement its proposals. Changes to the recruitment and appointment
system were introduced, making it more difficult for new recruits to obtain a permanent
position. However, resistance from the civil service associations and the difficulty of
implementing proposals, such as performance pay, meant that many proposals were
either unsuccessfully introduced or were not introduced at all.

The reform proposals may have had the underlying objective of increasing political
control over the civil service. A more fragmented civil service on contract terms might, as
has occurred in other countries, lead to greater direct influence on the way that the civil
service operated. Perhaps with this in mind, Tung Chee-hwa devised and introduced the
Principal Officials Accountability System in 2002. Up to that point, Principal Officials,
with one exception, had all been senior civil servants. They could be moved from one
position to another in the civil service or as Principal Officials but they could not be
dismissed. Under the new system, some Principal Officials (the three policy secretaries
and the heads of the policy bureaus) were to become political appointees on contract and
could be dismissed by the Chief Executive. They were, in that sense, more accountable
to the Chief Executive. But their accountability to the Legislative Council remained as
weak as it had been before the change.

Where the government did succeed was in downsizing the civil service. The difficult
economic circumstances of the first six years after the handover led to considerable
pressure from business groups and from the Legislative Council to reduce the size of
the civil service and to cut salaries. The government responded by enacting a freeze on
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14
recruitment and, in 2002, began a process which eventually resulted in reductions in

salaries and conditions of service for all civil servants to June 1997 dollar levels. At the
same time, it reduced the size of the civil service, transferring some to other parts of the
public sector, but cutting back particularly on artisans and labourers who had formed
such a large part of the colonial civil service but whose work was now outsourced to
the private sector. In 1997, 12% of the civil service (22,883 people) was on Model Scale
1, the salary scale for artisans and labourers; by 2008, this had been reduced to 6.8%
(10,506 people) although some of the shortfall was made up by employing non-civil
service staff on contract.55 There were other significant drops in some departments,
notably in housing, where estate management had been contracted out. An enhanced
productivity scheme and voluntary retirement schemes also contributed to the drop in
numbers. Overall, the strength of the civil service declined from 184,639 in 1997 to
153,477 in 2008.56
Policy Formulation and Implementation after 1997

The main features of policy formulation and implementation after 1997 were: policymaking was constrained by economic circumstances; policy co-ordination was adversely
affected by the introduction of the Principal Officials Accountability System; the
consultative system broke down and the growth of civil society organisations made policy
implementation more difficult; and some critical policy problems remained unresolved
because of the political climate.

The first budget of the Special Administrative Region was expansionary and sought
to address the backlog of problems that had built up in the last years of colonial rule.
Thereafter, the budgetary deficit and the need for cost-cutting meant that the government
could not afford to take many new initiatives. When the economy improved after 2004,
the problem was not that the government could not afford to take new initiatives but
rather that its low credibility meant that it did not wish to spark confrontations with
the many civil society organisations who were opposed to new measures such as the
introduction of a goods and services tax, changes to the healthcare financing system
and various infrastructural developments.

There were also problems with policy co-ordination which were exacerbated by
the introduction of the Principal Officials Accountability System. Part of the rationale
for the new system was that Directors of Bureaus, who were now drawn in greater
numbers from outside the civil service, were expected to take new initiatives and to
cut through red tape. Some of these proposals foundered because they were announced
without proper consultation or costing. In addition, the Principal Officials Accountability
System in effect downgraded the roles of the Chief Secretary for Administration and the
Financial Secretary in the hierarchy. Both officials previously had the power to control
public expenditure. Under the new arrangements, they were implicitly equal in status
with their fellow Principal Officials. The system encouraged Director of Bureaus to act
more autonomously and to reduce co-ordination with other bureaus. When Donald Tsang
succeeded Tung Chee-hwa as Chief Executive in March 2005, he reverted to previous
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15
practice, in which the Chief Secretary and the Financial Secretary had exerted stronger
financial control over new expenditure, and brought back more former civil servants as
Directors of Bureaus.57

The consultative system, which had been an integral part of policy-making under
colonialism, quickly broke down after 1997. The major reason was the growth of civil
society organisations which worked outside formal political structures and often took
their grievances to the streets rather than channelling them through the Legislative
Council or bringing their demands directly to the government. This made it difficult for
the government to try to deal with them and, on many issues, it did not even try to do
so.58 In other cases, pressure groups were created to oppose the policy after it had been
announced which resulted in problems with implementation.

The groups also employed increasingly sophisticated tactics, using court action and
forming coalitions with other groups to try to prevent implementation. The opposition
to the national security legislation in 2003 illustrated the way in which the consultative
system was failing and, conversely, that the way in which the strength of civil society
organisations outside the formal political structure was growing. The initial consultation
with the public over the changes that would be made under Article 23 led the government
to believe that it enjoyed majority support for its proposed measures. Public opinion
polls, to the contrary, showed that a majority were actually opposed to the legislation. As
opposition began to build, a coalition, the Civil Human Rights Front, brought together
disparate groups who believed that their civil liberties were threatened or who were
opposed to the government on other grounds. The eventual mass demonstration resulted
in the withdrawal of the legislation but left open the possibility that such mass action
might occur again if government policies alienated a sufficient number of people.

The consequence was that the government found itself in a serious dilemma over
policy. If it were to introduce new policies, it had to be certain that there would not be
substantial opposition to their introduction. But the existing consultative mechanisms
were clearly an inadequate guide to whether a policy would meet with public approval.
The government, accordingly, formulated and implemented policy with extreme caution.
The goods and service tax, which economists had long agreed was the best way of
broadening Hong Kongs revenue base,59 was abandoned when there was some evidence
of opposition to it. Other policies, such as the reform of healthcare financing and social
security benefits, were made so slowly that the problems gradually became worse. By
2008, there were substantial policy backlogs in many areas.
Government and the Legitimation of Power after 1997

Fractious relations between government and the public over policy issues were part
of the larger problem of how to reduce the legitimacy deficit and obtain a mandate
to govern effectively. The difficulties of legitimating power were related to: problems
associated with constitutional reform and the introduction of universal suffrage; the
position of the Chinese government; and the unresolved problem of changing the system
in a polarised polity.
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16

Constitutions are intended to reflect some measure of political reality, of how the
people wish to see their affairs arranged and the conditions under which they accept
that a government has a legitimate right to rule. The Basic Law was never approved
by the Hong Kong people. It was imposed after a drafting process, dominated by the
Chinese government, which led to the entrenchment of many of the former authoritarian
colonial provisions. It did, however, include two possibilities for progress towards more
democratic elections. The first was that specific provisions for the election of the Chief
Executive in 2007 and the Legislative Council in 2008 were to be reviewed, raising the
prospect of introducing universal suffrage or, at least, a faster pace of democratic reform.
In 2004, the Chinese and Hong Kong governments closed the door on this avenue for
constitutional change. The governments Task Force laid down nine conditions which had
to be met before constitutional change could be considered, including taking the views
of the Chinese government into consideration, doing nothing to abrogate the Chinese
governments right to appoint the Chief Executive, ensuring that any amendments
to the Basic Law should strengthen the executive-led system, and that the maturity
of political talents and political groups should be taken into account.60 This was a
scarcely-disguised code for the maintenance of the status quo and of the continuing
opposition of the Chinese and Hong Kong governments to any immediate increase in
democratic numbers in the Legislative Council. When, in December 2005, the Chief
Executive offered a sop in the form of a proportionate balanced increase in numbers in
the Legislative Council, and of expanding the size of the electoral college for the Chief
Executive elections, the democratic members used their votes to prevent the government
from obtaining the two-thirds majority it needed to pass the amendment.61

The second possibility for constitutional reform was contained in the provisions in
the Basic Law that stipulated that both the Chief Executive and the Legislative Council
should ultimately be elected by universal suffrage.62 At each election since 1991,
approximately 60% of the electorate have consistently voted for democratic parties who
stand for the introduction of universal suffrage as soon as possible.63 There have also
been street demonstrations in favour of universal suffrage, some of which have attracted
hundreds of thousands of protesters. Opposition to rapid progress towards universal
suffrage has come from the Hong Kong government itself, from the business-based
Liberal Party, from the pro-Beijing Democratic Alliance for the Betterment and Progress
of Hong Kong (DAB) and, especially, from the Chinese government. Although both
governments and all political parties now favour the eventual introduction of universal
suffrage, the question of when it should be introduced and the form that it should take
has been at the heart of political debate since 1997.

Between September and December 2007, a critical by-election campaign was fought
on Hong Kong island which focused on the democracy issue. Because it was a byelection, the entire 618,000-strong electorate on the island was entitled to vote for a single
candidate, in contrast to the list proportional system, which applies at general elections,
where voters select six members for the whole of Hong Kong island. The democrats
billed the by-election as a referendum on universal suffrage and chose to support the
former Chief Secretary for Administration, Anson Chan, as its candidate.64 The DAB
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17
threw its support behind Regina Ip Lau Suk-yee, the former Secretary for Security, who
had been responsible for the introduction of the national security legislation under Article
23 of the Basic Law. Chan won the election by a convincing margin, receiving 55 %
of the vote to Ips 43% on a 52 % turnout.65 In the 2008 Legislative Council elections,
the democrats won 23 of the 60 seats, sufficient to retain a blocking percentage on
constitutional issues. The election saw two prominent members of the Liberal Party
lose their seats, weakening the governments support and giving the legislature a slim
majority of left-of-centre members. On most issues, the government continued to rely
on the DAB, the remaining Liberals and independents with the democrats providing the
opposition. The election did nothing to resolve the constitutional issue.66

Following his election as Chief Executive in 2007, Donald Tsang said that his
foremost objectives in office would be to seek a consensus on constitutional reform. A
Green Paper was issued in 200767 but gave no clear indication of how universal suffrage
might be achieved, although Tsang said he was willing to accept 60% in favour of any
proposal as a basis for progress.68 When he reported to the Chinese government on
the response to the Green Paper, Tsang said that there was a consensus that universal
suffrage should be introduced in 2017 with the Chief Executive elections to be held in
advance of those for the Legislative Council, possibly in 2012 but no later than 2017.69
He warned, however, that as far as models for elections to the Legislative Council
were concerned no mainstream view could be formed at this stage.70 By the end of
December, the Standing Committee of the National Peoples Congress had announced
that the Chief Executive may be elected by universal suffrage in 2017 and that the
Legislative Council may be elected under universal suffrage in 2020.71

The devil continues to lie in the details. The Chief Executive is currently elected by
an electoral college of 800 delegates. A candidate requires the signature of one hundred
delegates to be nominated. In the 2007 election, the democratic candidate, Alan Leong
Kah-kit, did manage to obtain the necessary number of nominations but had no real
chance of winning the elections.72 In the schemes that have been suggested by some proBeijing figures, the Chinese government, or a nominating committee reflecting its views,
would have the final say on which candidates would be permitted to run in the Chief
Executive elections. Leaving aside the Basic Law provision that the Chief Executive
is appointed by the Chinese government, universal suffrage would then mean a choice
between two or more Beijing-approved candidates. Similarly, elections to the Legislative
Council might depend on the interpretation of what universal suffrage means. In January
2006, for example, the Constitutional Affairs Bureau produced a paper which in effect
argued that universal suffrage did not mean one person, one vote.73

The Chinese government does not always appear to act in a co-ordinated manner
on Hong Kong issues. Some of its views may be driven by particular factions within the
government in Beijing or in the region; others may come from the Chinese governments
local Hong Kong and Macao Affairs and Ministry of Foreign Affairs Offices. On
constitutional issues, however, at least publicly, the Chinese government has spoken with
one voice. Its position has always been that progress towards universal suffrage should
be slow and orderly. Its suspicion of the democrats dates from their support for students
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18
and workers during the Tiananmen Square demonstrations in 1989 and their subsequent
annual commemorations of the massacre. The Chinese government has clearly indicated
that it will not permit the democrats to exercise power in Hong Kong and that it will
use its constitutional powers to prevent them from doing so. In early 2004, for example,
when the review of the arrangements for the 2007 and 2008 elections was underway, a
former mainland Basic Law drafter said that he did not expect to see universal suffrage in
Hong Kong until 2030 or 2040.74 Another drafter, and former New China News Agency
representative in Hong Kong, Zhou Nan, was quoted as saying that the democrats were
dangerous elements and puppets of the British government and that only patriotic
Hong Kong people should rule Hong Kong.75 The Deputy Secretary-General of the
Standing Committee of the National Peoples Congress, Qiao Xiaoyang, in explaining
why the Committee had not changed the electoral rules, argued that over-representation
of business interests was necessary to protect capitalism, that the Basic Law was not
yet fully accepted by the Hong Kong people and that there were major disagreements
over the implementation of universal suffrage in 2007 and 2008.76

Despite the concession of universal suffrage for the 2017 Chief Executive election
and the 2020 Legislative Council elections, the Chinese governments stance does
not appear to have changed greatly since those statements were made. The conditions
laid down for universal suffrage in the Chief Executives letter on the Green Paper
on constitutional development to the Secretary of the National Peoples Congress in
December 2007 are essentially the Chinese governments conditions. They include,
for example, the four principles on constitutional development, namely, meeting the
interests of different sectors of society, facilitating the development of the capitalist
economy, gradual and orderly progress, and being appropriate to the actual situation in
Hong Kong.77 Any one of these conditions might be used to veto future constitutional
models even those which had the support of a majority of Hong Kong people. In essence,
the Chinese government seeks to ensure that the government of Hong Kong remains in
the hands of those whom it thinks will maintain stability and prosperity. For the present
that does not include the Democratic Party although there may be room in the future
for accommodation with more moderate democrats.

Why did the Chief Executive propose that universal suffrage should be granted as
early as 2012? Why did Chinese government, despite its misgivings, eventually concede
that universal suffrage might be introduced for the 2017 and 2020 elections? When he
announced the decision, the Chief Executive claimed that the Central Government had
attached great importance to the wishes of the Hong Kong people.78 But this begs the
question of why the Chinese government chose not to attach the same importance to
those same views in 2004 or even earlier. A more likely explanation is contained later
in the same announcement when the Chief Executive notes that:
Universal suffrage has been a contentious issue ... since [the] 1980s, with
diverse views among political parties and within the community. If emotional
debate and conflict between political parties drags on over this matter, Hong
Kongs stability and development will be severely hampered.79
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19
In other words, the policy impasse will continue, there will be more street demonstrations
and the electorate will become increasingly disenchanted. In the face of those problems,
the promise of universal suffrage, carefully hedged to ensure that ultimate power
remains with the Chinese government and its preferred appointees in Hong Kong, is
a palliative designed to sooth a fractious polity and to enable policy to be formulated
and implemented more easily.

The task of devising constitutional arrangements broadly acceptable to the public has
been devolved to the Commission on Strategic Development, a body which is as divided
as the polity. There must be doubts about whether it can come up with a consensus on
progress towards universal suffrage or whether the paralysis over the form of elections
is set to continue.
Analysing Systemic Problems in the Public Sector

From this brief account of political system and the public sector, three major problems,
spanning the colonial and post-1997 periods, may be identified:
The problem of ensuring that public officials are accountable for their actions
(accountability);
The problem of formulating and implementing policies that are in the public interest
(appropriate policy-making);
The problem of legitimating the use of power and of ensuring that the process of
governing is undertaken with the consent of the people (legitimacy)
Each of these problems puts relationships within the public sector and between the public
sector and market and society under strain. When there is a smooth working relationship
between the political officeholders and bureaus and departments within the civil service,
when needs can be identified and appropriate solutions devised, when policies can be
formulated and implemented with the support of elected politicians, business and civil
society, then government and the public sector can deliver goods and services efficiently
and can respond effectively to future problems. While there were periods during colonial
rule when those conditions were met, they have not applied in Hong Kong since the
handover, to the detriment of public sector performance. To analyse why this has been
so, we need to look at each of these problems in their wider conceptual context.
Accountability
The question of how politicians and civil servants will be held accountable for the
way in which they exercise power is a central consideration in any political system.
Accountability may be defined to include both the external constitutional measures and
internal bureaucratic controls that are required to ensure that power is exercised legally,
appropriately, and in the public interest.80 In its constitutional form that is, the nature of
the accountability of the government to the people and the types of political controls over
the public sector we need also to distinguish between answerability, the willingness
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20
of a government to explain its actions, and political responsibility, where a government

accepts the consequences of its mistakes which may mean the resignation of ministers
or even of the government itself.81 The type of political system determines the different
ways in which these accountability issues are handled. In parliamentary systems, the
government is accountable to the legislature and to voters who may remove it from office
at the next election. Accountability for the actions of civil servants is formally vested in
the minister in charge of a department who answers questions on its performance in the
legislature.82 The minister is a member of the legislature and may be held responsible for
the inappropriate, illegal or corrupt actions of civil servants in exercising their official
functions. Under the American and in some other presidential systems, accountability is
vested in cabinet ministers who are appointed by the Congress and who are required to
report frequently on the performance of their bureaus and agencies.83 Each presidential
and congressional election requires candidates to seek a mandate from the voters. In the
Chinese system, the Communist Party is seen to represent the will of the people and thus
assumes a direct political responsibility for the way in which the public sector operates.
The partys supremacy derives from its revolutionary importance as the vanguard of the
proletariat and the sole interpreter and guardian of the interests of the people and the
nation and is not dependent on legitimation through elections.84

None of these systems apply in Hong Kong. While civil servants are bureaucratically
accountable for their actions through the internal hierarchy and through such external
checks as the Audit Commission, the ombudsman and the Public Accounts Committee,
the political accountability of the government to the Legislative Council remains weak
and ill-defined.85 Principal Officials are not confirmed by the Council and, although they
must answer to it, a vote of no confidence in their performance would not necessarily
result in their dismissal. The government is similarly unaccountable to the people who
do not vote it into office and cannot remove it. The creation of the Principal Officials
Accountability System did not resolve these problems and relationships between
government and the legislature and between the government and the public consequently
represent major hurdles in devising new policies, delivering goods and services, and
establishing regulatory processes and institutions.
Appropriate Policy-making
Policy formulation and implementation is a fundamental concern in any system of public
administration. Policy choices represent the priorities which government accords to
problems and to the opportunities which it wishes to pursue. If those choices are made
with only passing reference to the demands of the people, then the government is likely
to be accused of insensitivity to their needs and perhaps may also encounter opposition
at the implementation stage. Policy choices are always difficult to make. They become
even more difficult when financial resources are stretched, when there is vocal opposition
to the direction which the government has chosen, and when that opposition is related
to governance or legitimacy questions.
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21

Because all of these issues were relevant in post-1997 Hong Kong, the government
suffered from weakened policy capacity, especially after the July 2003 demonstration.86 It
was making policy without a thorough grasp of the circumstances87 because Principal
Officials were encouraged to cut through the Gordian knot of accumulated problems
without, sometimes, the prudent costing that had characterised policy-making under its
colonial predecessor. If the colonial government had often underestimated its capacity to
introduce new policies,88 the Special Administrative Region government, in more difficult
circumstances, very often over-estimated its ability to do so. The consequent policy
failures undermined its credibility and resulted in a situation in which the government
was reluctant to introduce new policies for fear of further failure.89 Policy problems
increased in an atmosphere of rising discontent.
Legitimacy
For the exercise of power to be fully legitimate, three conditions are required: conformity
to established rules; the justifiability of laws by reference to the shared beliefs of rulers
and ruled; and the express consent of subordinates to the particular power relationship
in which they are involved.90 It follows that if these conditions are absent, the way in
which power is exercised is, to a greater or lesser degree, compromised.

Constant and widespread friction between a government and its people may be
symptomatic of more intractable difficulties than simple discontent with particular
policies. Because people have multiple roles in life, it is quite conceivable that any
individual or group may be dissatisfied or disadvantaged by a specific policy decision but
may benefit from government action on another issue. In many political systems, these
compensatory rewards even up the policy ledger and serve to relieve pressure on the
government. If this does not happen, or if the policy issue assumes such significance that
compensatory rewards are unimportant, there may be constitutional remedies to rectify
the situation. In democratic systems, for example, the government may be removed at the
next election. In more authoritarian systems, such as Hong Kong, where the government
is not elected, cannot be removed, and has no mandate from the population, discontent
with policy may be coupled with, or become representative of, more systemic problems.
If citizens do not hold that the system of power relationships under which they live is
legally valid and morally justifiable and if they give no indication of their consent to that
relationship, then the regime will suffer from a legitimacy deficit. If it does nothing to
correct or reduce that deficit, then it could be faced with a crisis of legitimacy in which
its authority to rule is called into question.

In the absence of elections that could change the government, or any other means
of legitimation, the Hong Kong government, both before and after 1997, has been faced
with the need to reduce the legitimacy deficit. Tung Chee-hwa was confronted with the
problem that many of his options were precluded by the severe economic difficulties
which Hong Kong was then experiencing. His problems were compounded by ill-advised
policy initiatives and perceived threats to civil liberties which called his authority into
question. His successor was fortunate enough to experience an economic recovery in
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22
his first three years in office. But the legitimacy problem remains. The constitution does
not enable the government to demonstrate that it has the consent of the people and an
unquestioned mandate to govern. The government has yet to show that it has the capacity
to make policy in ways that resolve contentious problems. And the pace of democratic
reform continues to divide the polity.

Each of these related problem areas accountability, policy formulation and
implementation and legitimacy represents a major challenge for the public sector and
helps to explain why the post-1997 system has operated with reduced policy capacity
and conflictual relationships between political institutions and with the public. Those
problems and attempts to resolve them provide a framework for the remainder of this
book.

In Part 1 (Chapters 2 and 3), we consider issues relating to the political accountability
of public officials: the constitutional and legal framework, the effect of the introduction
of the Principal Officials Accountability System, and the political system established
under the Basic Law.

In Part 2 (Chapters 46), we focus on bureaucratic accountability, the values and
structure of the civil service, reform initiatives, public sector organisations outside the
civil service, and the problems which government and public sector organisations have
faced.

In Part 3 (Chapters 69), we analyse the policy-making system. These chapters
focus on the budgetary process and policy formulation, the policy process in its political
context and policy implementation.

In Part 4 (Chapters 1012), we focus on the relationship between government and
the people and on attempts to reduce the legitimacy deficit by creating a more responsive
civil service and establishing organisations designed to protect civil liberties and to
redress grievances. The book concludes with an evaluation of the prospects for resolving
the current difficulties which the public sector faces and some suggestions for reform.
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Part I
The Constitution and Political Accountability
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The Constitutional Framework
onstitutions are definitive, legally-binding accounts of the rules and principles that
govern polities. They describe the powers and functions of the major executive,
legislative, judicial and administrative institutions and delineate relationships between
them. They provide the authority for the decisions of the government and help to
legitimate the way in which power is exercised. They often specify how government
is to be controlled and the mechanisms through which the executive authorities are
to be held accountable by the legislature and by the people. They may reflect the
aspirations and values of the people and help to protect their civil liberties from possible
encroachments by the state.

While Hong Kongs Basic Law contains most of the features of a constitution, it also
has three peculiar characteristics resulting from the resumption of Chinese sovereignty
and from the legacy of the colonial political order. First, a constitution normally implies
sovereignty, that is, it assumes that the ultimate source of legal authority is vested in the
jurisdiction that is being described and that the powers of the political and administrative
institutions which compose the state are not constrained by any external body. Since
Hong Kong is part of China, however, sovereignty rests with the Chinese state and the
ultimate source of formal legal authority is the constitution of the Peoples Republic
rather than the Basic Law. The Basic Law does specify that the political arrangements
that apply in Hong Kong will be distinctly different from the rest of China and that it
will enjoy a high degree of autonomy. But power is not entirely vested, as it would
be in a sovereign state, in the Hong Kong authorities. The government of the Peoples
Republic of China (PRC) retains responsibility for foreign affairs, defence and, most
importantly, the right to interpret and amend the Basic Law which, as Ghai notes, ...
is not simply about the meaning of laws but about power relationships...about control
not autonomy...1 There are aspects of the relationship between the central government
and the Hong Kong Special Administrative Region (HKSAR) which have yet to be
made clear and which are a consequence of the establishment of a supposedly highly
autonomous entity within a unitary system. Thus, while the Basic Law may be regarded
as an authoritative, formal description of the way in which domestic institutions are
expected to work, there are also certain restrictions within it on the evolution of political
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26
institutions which reflect the interests of the sovereign power and its views on how the
polity should be run.2

Second, the Basic Law is fundamentally different, in a formal constitutional sense,
from the colonial political order which it replaced. The colonial constitution was largely
unwritten. Legal authority stemmed from the Royal Instructions and the Letters Patent,
supplemented by unwritten conventions, some of them binding, some of them not. The
interpretation of those conventions by the executive authorities in Britain and Hong Kong
and by the courts enabled quite significant constitutional changes to be made without
major amendments to the written constitutional documents. Conventions generally tend
to develop over time in response to changing circumstances. The Basic Law, by contrast,
is a written constitution which has only been in force for a short period of time. As a
young constitution, with many of its central provisions still to be fully interpreted in the
courts or by the Standing Committee of the National Peoples Congress, it could still
develop in surprising and unexpected directions. In the many constitutional disputes that
have occurred since 1997, the different interpretations of the Basic Law reflect deep
disagreements over Hong Kongs political arrangements. While such divisions exist,
there is no reason to suppose that many other provisions will be any less controversial
when they are subject to interpretation. As Thynne remarks, the Basic Law creates but
a framework within which understandings, relationships, various courses of action, and
so on, will have to be forged, justified and maintained through an ongoing process of
political debate and manoeuvring.3

Third, although there were fundamental differences in form between the largely
unwritten colonial constitution and the written Basic Law, there was considerable
continuity in the way in which the central institutions of government were expected
to perform. The drafters of the Basic Law deliberately drew on the central features of
colonial rule in constructing the new political order. Xu Jiatun, the Chinese governments
representative in Hong Kong in the 1980s, argued, for example, that when we are
designing the Basic Lawwe ought to place emphasisand utilise the British system of
administration.4 The Basic Law drafters were particularly attracted to the centralisation
of power in the hands of the executive authorities; a weak and, until 1985, entirely
unelected Legislative Council; and the informal, but nonetheless significant, participation
of business and professional elites in the exercise of power. The Chinese government
was understandably anxious to promote political stability in Hong Kong after 1997 and
colonial practice seemed to offer a successful model. But what the drafters of the Basic
Law took from the colonial constitution was its pre-1984 legacy. They largely ignored
the political effects of the transition to Chinese sovereignty and the economic effects
of increasing affluence on the aspirations of the population, in particular, demands for
a more democratic and representative government. The Basic Law centralised power in
the office of the Chief Executive; the Legislative Council remained weak; and functional
constituencies, disproportionately favouring business and professional elites, became an
entrenched feature of the electoral system.5

In this chapter, we are particularly concerned with the degree to which the Basic
Law establishes a framework for political accountability that is, the extent to which
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27
the government is held accountable for its actions and whether it provides legitimate
authority for the exercise of power. We are also concerned with the question of whether
the Basic Law accurately describes the way in which the political and administrative
system actually operates. Is the relationship between the various institutions adequately
and clearly described? How appropriate are their powers? How well does the Basic
Law protect civil liberties? What do the controversies over its interpretation and
implementation of the Basic Law tell us about the political system? What problems
have occurred in implementing the Basic Law?
The Basic Law

The Basic Law was drafted with the provisions of the Sino-British Joint Declaration
of 1984 in mind. The preamble notes that the Chinese governments basic policies on
Hong Kong have been elaborated in the Joint Declaration and that these include the
principle of one country, two systems and that the socialist system and policies, other
than those relating to defence and foreign affairs, will not be practised in the HKSAR
where the previous capitalist system and lifestyle shall remain unchanged for 50 years.6
In addition, specific provisions concerning the rights of citizens, the legal system, the
economy, education, science, culture, sports, religion, labour and social services closely
followed the wording of the Joint Declaration. What had not been agreed between the
British and Chinese governments and what was to become a continuing subject of
controversy were the provisions governing the central political institutions and the
pace at which, if at all, representative government would be introduced. The Chinese
governments policies on the Chief Executive, the Principal Officials and the election of
the Legislative Council are outlined in a single brief paragraph in the Joint Declaration
and say little except that only local inhabitants may hold office, that the Chief Executive
may be selected or elected and appointed by the Central Peoples government, and that
the Legislative Council should be constituted by elections.7

The political vacuum created by the absence of firm guiding principles on the
composition, powers and functions of the central institutions in the Joint Declaration
left open the possibility that the Basic Law might eventually lead to a more democratic
Hong Kong. The Chinese government had promised a future in which Hong Kong
people would rule Hong Kong. There was some expectation that this would necessarily
entail the introduction of more democratic processes to allow choice about whom those
rulers would be. But the consultation process quickly dashed that hope. The Chinese
government set up two committees to help draft the Basic Law. The first, the Basic
Law Drafting Committee (BLDC), had primary responsibility for the production of the
document. The BLDC was composed largely of mainland drafters and conservative
Hong Kong political figures. The 59 members were primarily drawn from the mainland
although 23 did come from Hong Kong. Of those, only two, Martin Lee Chu-ming
and Szeto Wah, were democrats, but both resigned from the Committee, and then were
subsequently expelled by it, after they expressed support for the students and workers
in the Tiananmen Square demonstrations in 1989. A second committee, the Consultative
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28
Committee, was supposed to feed the views of Hong Kong people into the drafting
process. But it soon became clear that the Committee had little power, was controlled
by the Chinese drafters, was not representative of public opinion, and was intended to
serve simply as a means of legitimating and endorsing the decisions of the BLDC.8
The Basic Law was promulgated in 1990 without a referendum or any other form of
ratification to determine whether it was acceptable to the Hong Kong people. The Chinese
government took the view that Hong Kong people were Chinese, that Hong Kong was
Chinese territory, that sufficient consultation had taken place and that the National
Peoples Congress had the authority to pass the legislation. The British government did
not insist on any form of popular endorsement, preferring instead to try to modify Chinese
views behind the scenes and to avoid possible further difficulties during the transitional
period. The consequence was that the future political arrangements began life with two
very serious impediments: they had not received the approval of the Hong Kong people
and they were based on practices that, even in 1990, let alone 1997, were outdated and
inappropriate for an increasingly participative and highly political society.

The polity, like its colonial predecessor, was to be executive-led with
considerable powers vested in the Chief Executive. Unlike the Governor, however,
the Chief Executive could either be elected or selected. The first Chief Executive
was in fact elected by a carefully selected electoral college of 800.9 Article 45 notes
that the aim is ultimately to select the Chief Executive by universal suffrage upon
nomination by a broadly representative nominating committee in accordance with
democratic procedures. The definition of democratic in this context is critical since
the committee probably would not put forward candidates unacceptable to the Chinese
government. Even if it did, the Chinese government, under Article 45, has the power
to appoint the Chief Executive and need not appoint a candidate even if he or she does
receive a majority of the votes cast.

The election of the Chief Executive became increasingly contentious after 2002
when, despite his widespread unpopularity, Tung Chee-hwa was returned unopposed.
In the following year, a Democratic Party Legislative Councillor, Albert Ho Chun-yan,
proposed that the Basic Law should be amended to allow the Chief Executive and all
members of the Legislative Council to be elected by universal suffrage but the motion
was defeated by the functional constituency members.10 The failure to make progress
towards electing the Chief Executive by universal suffrage led to the creation of the
Article 45 Concern Group, professionals with seats in the Legislative Council, who
sought the early implementation of the electoral provision and who eventually became
core members of the Civic Party which emerged from the Group.11 Additional pressure
to enact the provision had little immediate impact on either the Chinese or Hong
Kong governments. In April 2004, the Standing Committee rejected calls for the Chief
Executive to be elected by universal suffrage in 2007.12 In December 2005, a Hong
Kong government proposal to double the size of the electoral college from 800 to 1600
was rejected by the Legislative Council as inadequate.13

Despite these setbacks in progress towards universal suffrage, the 2007 election for
the Chief Executive did result in a contest with both candidates campaigning on policy
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29
platforms, holding debates and seeking to mobilise support as much, it seemed, among
the public as among the 800 members of the electoral college.14 Although the result was
never in doubt, and although even a popular election would probably have resulted in
the Chinese governments preferred candidate, Donald Tsang, continuing in office, the
public response to the election showed a level of participation and enthusiasm which
reflected majority support for the view that the Chief Executive should be elected by
universal suffrage as soon as possible. In December 2007, the Chinese governments
eventually conceded that the Chief Executive might be elected by universal suffrage in
201715 although there were still concerns that the nomination process might be used to
exclude candidates whom it found to be undesirable.

The difficulty has been that the Chinese government does not see the Chief
Executive as the representative of the Hong Kong people. Rather, just as the Governor
was the representative of the British Crown, the Chinese government regards the Chief
Executive as its appointee in charge of Hong Kong affairs. He is consequently armed
with most of the autocratic powers previously vested in the Governor. The Chief
Executive has the power, under Article 48 of the Basic Law, to decide on government
policies and to issue executive orders; to sign bills passed by the Legislative Council; to
nominate the Principal Officials for appointment by the Chinese government; to appoint
and remove judges of courts at all levels; to appoint or remove the holders of public
office in accordance with legal procedures; to implement directives from the Chinese
government in matters provided for in the Basic Law; to conduct permitted external
affairs on behalf of the HKSAR and as authorized by the central authorities; to approve
the introduction of motions regarding revenues and expenditure to the Legislative
Council; to decide whether government officials should testify or give evidence to
legislative committees in the light of security and the vital public interests of the SAR;
to handle petitions and complaints and to grant pardons. The Chief Executive may also
return bills to the Legislative Council for further consideration (Article 49) and may
dissolve the Legislative Council if he refuses to sign a bill passed a second time by the
Legislative Council or if the Legislative Council refuses to pass the budget or other
important government legislation (Article 50).

These are formidable powers which are not restricted, to any great extent, by the
powers granted to the Executive and Legislative Councils and do not, in practice, make
the Chief Executive accountable to any body other than the Chinese government. The
Executive Council, which is appointed by the Chief Executive, is simply described as
an organ for assisting the Chief Executive in policy-making (Article 54). The Chief
Executive must consult it before making important policy decisions, introducing
bills to the Legislative Council, making subordinate legislation or dissolving the
Legislative Council (Article 56) but is under no obligation to follow its advice. The
Chief Executive is accountable to the Central Peoples Government and the Hong
Kong Special Administrative Region (Article 43). But it has never been clear what
is meant by the Hong Kong Special Administrative Region in this context. It cannot
be the government since the Chief Executive is head of the government. Nor can it be
the Legislative Council since it does not have the power to hold the office accountable
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30
(although the government is supposedly accountable to the Council under Article 64).
Nor to the people of Hong Kong since they do not at present have the right to vote for
the Chief Executive. Political accountability is about the ways in which a governments
powers, and by implication those of the Chief Executive, can be regulated or checked
in the interest of protecting the citizen from the arbitrary exercise of power by the
state.16 Constitutional conventions have yet to emerge to modify the formal powers
of the Chief Executive. It might be argued, however, that, given the strength of civil
society and the Legislative Councils ability to publicise potential threats to liberties or
arbitrary government action, the Chief Executive would be unwise to exercise to their
fullest extent the potentially autocratic powers granted by the Basic Law.

To remove the Chief Executive from office, without the support of the Chinese
government, is virtually impossible. He may only be removed if he is unable to
discharge his duties, or, if after the dissolution of the Legislative Council by the Chief
Executive, it passes the same bill again with a two-thirds majority or, if after dissolution
because it refused to pass the budget, it still refuses to pass the budget (Article 52). The
Legislative Council may pass a motion charging the Chief Executive with breach of law
or dereliction of duty, charges which are then investigated by an independent committee
set up by the Chief Justice. If there is sufficient evidence to support the charge, the Chief
Executive may be impeached if there is a two-thirds majority in support of the motion
(Article 73). Such situations are highly unlikely to arise and would probably trigger
overt or covert action by the Chinese government.

The Chinese government has a number of powers which could be interpreted
as a right to remove a Chief Executive if it chose to exercise them. The Secretary of
Constitutional Affairs has taken the view that, although there was no explicit mention
in the Basic Law of the Chinese governments right to remove a Chief Executive, it
can be reasonably deduced that the Central Peoples Government can remove the Chief
Executive from office in accordance with certain provisions of the Basic Law.17 The
clause that the Secretary had in mind was Article 73(9) which provides that the removal
of a Chief Executive must be reported to the Chinese government for decision. Despite
the opposition of some members of the Legislative Council, who claimed that the
government was amending the Basic Law, the Chief Executive Election Ordinance of
2001 contained a clause which further strengthened the role of the Chinese government
by specifying that it may remove the Chief Executive in accordance with the provisions
of the Basic Law.18 For all practical intents and purposes, then, the Chinese government
is the only body that can remove a Chief Executive.

In most constitutions, power is formally lodged in the executive or in the legislature
or in some distribution of power between the executive, legislature and other institutions
such as the judiciary. Since the Basic Law essentially establishes an executive-led
system, it follows that the powers of the Legislative Council are relatively weak in
relation to the executive. The drafters of the Basic Law sought both to dampen political
participation so that popular sovereignty could not easily be expressed through the
legislature and to reduce the powers of the Council to prevent its development as a
counterpoint to the authority of the executive. Although Article 68 re-iterates the Joint
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31
Declaration provision that the Legislative Council shall be constituted by election and
specifies that the ultimate aim is the election of all the members of the Legislative
Council by universal suffrage, no timetable is set in the Basic Law for when this might
be achieved. The decision in December 2007 that elections by universal suffrage may
be permitted in 2020 will mean that the Basic Law will have to be amended. It is not
yet clear, however, how the words universal suffrage will be interpreted which could
mean that functional constituency seats could continue to survive.

Since 1991, when directly elected seats were introduced, the electoral support
for parties in favour of rapid progress towards universal suffrage has been sufficiently
strong that they would have won a majority in the Legislative Council if elections had
been held on a first-past-the post system. As it is, the electoral arrangements in the
Basic Law, and as subsequently promulgated by the Provisional Legislative Council,
are designed to allow for the election of enough conservative, pro-China members to
provide majority support for the government in the Legislative Council. Elections for
directly elected seats take place under a proportional, multi-member list system, which
increases the chance of a party or individual winning a seat with a low percentage of
the vote, while the functional constituency seats have many business and professional
members, who tend to support the government and are often returned unopposed by
very small electorates (see Table 2.1).19
Table 2.1 Composition of the Legislative Council, 19912008
Year

1991
1995
1998
2000
2004
2008
Officials

Appointed

18

Directly-
elected
18
20
20
24
30
30
Functional
Constituencies
21
30
30
30
30
30
Election
Committee

10
10
6

Total
60
60
60
60
60
60
Sources: Ian Scott, Party Politics and Elections in Transitional Hong Kong, Asian Journal of
Political Science 4(1), (1996),133; The Basic Law of the Hong Kong Special Administrative Region
of the Peoples Republic of China, 1990 (Hong Kong: The Consultative Committee for the Basic
Law, April 1990), Annex II.
Notes: 1. The Governor was President of the Council (and a fourth official) until 1992.

2. The Legislative Council will not be entirely directly-elected until 2020 at the earliest.
The ratio of directly-elected to functional constituencies in the interim and whether or
not functional constituencies will be retained in some form even after 2020 has yet to
be determined.

The powers of the Legislative Council are also restricted by the Basic Law. Article
64 does specify that the government is accountable to the Legislative Council but it is a
very weak form of accountability. The government shall present regular policy addresses
to the Council; it shall answer questions raised by members of the Council; and it shall
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32
obtain approval from the Council for taxation and public expenditure. The Council can
examine and approve the budget (Article 73) but risks dissolution and elections if it is
not passed. The intention of the Basic Law is to create a debating chamber which will
dutifully endorse the bills brought before it by the government. Bills introduced by the
government require a simple majority to pass whereas motions, bills or amendments to
government bills introduced by Councillors require a majority of each of two groups
of members, those from the geographical constituencies and those from the functional
constituencies (Annex II).

The provisions concerning the other central institutions, the judiciary and the public
service, followed those prescribed in the Joint Declaration. Save for the issue of the
Court of Final Appeal, which remained unresolved until 1995, the judicial system was
intended to function as it had before 1997 (Article 81). Judges were to be appointed by
the Chief Executive on advice from an independent commission (Article 88) and could
only be removed by the Chief Executive on advice from a tribunal of not less than three
local judges.

The civil service, too, was expected to maintain its past powers and functions. In
1995, the Preliminary Working Committee (PWC), which was responsible for overseeing
the transition from the Chinese side, released their working paper on the civil service,
the only one of 26 such papers that was made public. The paper essentially committed
the Chinese government to an unchanged civil service. It noted that:
The Chinese government attaches great importance to the stability of the Hong
Kong civil service before and after 1997 and considers this to be vital to the
smooth handover of sovereignty and the smooth transition. It regards Hong
Kongs 180,000 civil servants as a huge wealth, a source of strength for the
realization of Hong Kong people governing Hong Kong after 1997.20
The Committee followed the Basic Law on issues of recruitment, management and
conditions of service but added the provisions that those who wanted to leave should
submit their resignations as soon as possible, that public servants would not in future be
held responsible for their decisions under the colonial government and that the principle
of political neutrality would continue to be observed.21 The British government also
wanted to see stability and to exit Hong Kong in as dignified a manner as possible and
the civil service was clearly the key institution that would enable it to do so. Both sides
consequently gave public support to the civil service, lauding its efficiency and stressing
that it would continue to function as it had in the past.

The Basic Law makes specific mention that public servants including the
police department may all remain in employment and retain their seniority with pay,
allowances, benefits and conditions of service no less favourable than before(Article
100). There were concerns about a possible exodus of senior police officers, many of
whom were expatriates, during the transitional period. Expatriates are prevented from
holding the most senior positions in the civil service which are reserved for Chinese
nationals with no right of abode in a foreign country. Under Article 103, the management
of the civil service, recruitment on grounds of merit, conditions of employment,
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33
assessment, discipline and pay and conditions of service remain unchanged. Shortly
after the handover, the government introduced the Public Service (Administration) Order
which gives the Chief Executive authority over appointment procedures, dismissals,
suspensions and discipline. The Order drew on the colonial civil service regulations but
was subsequently further amended in 2000 to better reflect new public sector reform
measures.

The Basic Law seeks to centralise power and to establish a government which, in
the somewhat contradictory words of Article 12, shall enjoy a high degree of autonomy
and come directly under the Central Peoples Government. The Basic Law does provide
some protection for civil liberties, the capitalist economic system and the rule of law
but it is also singularly deficient in many constitutional and political respects. In the
following section, we examine these deficiencies and the impact that they have had on
Hong Kongs political system.
Deficiencies in the Basic Law

There are three critical respects in which the Basic Law is deficient. The first is that it
suffers from a lack of legitimacy because it was largely drafted by mainland Chinese
officials and academics and was never subsequently approved by the people of Hong
Kong. Second, the way in which political institutions are defined in the Basic Law
has contributed, unintentionally, to the creation of a disarticulated and dysfunctional
political system. Third, some of the specific provisions of the Basic Law have proved
to be problematic and have increased the regimes legitimacy difficulties. In particular,
the interpretation of the clauses relating to right of abode and the attempt to introduce
national security legislation under Article 23, have shown that there is widespread
opposition to some of its constitutional provisions. We examine the effects of each of
these deficiencies in turn.
The Problem of Legitimacy

Because the Basic Law was introduced without the consent of the people and did not
entirely reflect their beliefs, it has become a matter of debate and controversy rather than
an unchallenged source of authoritative decisions.22 As one senior Chinese government
official has noted, [t]here has not been a single day in which it [the Basic Law]
has not been subject to queries, distortions and even vilifications...23 The queries,
distortions and vilifications are symptomatic of a legitimacy deficit and reflect deepseated differences over the way in which power is exercised. The failure to legitimate
the political system means that it does not function efficiently. The major institutions
do not work in the unified, executive-led manner which the Basic Law presumes.
As far as policy is concerned, the informal relationship between the government and
civil society organisations is often more important than that between the government
and the formal institutions. And, since the governments relationship with civil society
is frequently conflictual and sometimes hostile, the governments ability to make and
implement policy is greatly constrained.
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34

The weakness of the Legislative Council and of political parties is a consequence of
the deliberate efforts of the Chinese and Hong Kong governments to reduce their power.24
If, as a result, the political institutions are not regarded as legitimate, it is scarcely
surprising that public demands are expressed through informal channels. The rise of civil
society may be attributed, in part, to the failure of the Basic Law to provide sufficiently
for the articulation and resolution of those demands. The Chinese governments adamant
refusal to amend the Basic Law has meant that political reality has continued to diverge
further from the constitutional description of the political order.
A Disarticulated System
The drafters of the Basic Law wanted a system which would enable the political
executive to make policy and to ensure that their intentions were implemented. Although
the system was intended to be unified and centralised, it quickly became disarticulated,
that is, the principal institutions began to function separately, in an uncoordinated fashion,
and not always harmoniously. The drafters of the Basic Law had no intention to set up a
system of checks and balances; the system was supposed to be executive-led and the
other institutions were expected to remain subordinate to the executive. Although Tung
Chee-hwa sought to address the political, as opposed to the constitutional, weakness
in his position as Chief Executive by introducing the Principal Officials Accountability
System, there remained a fragmented policy-making environment which frequently
resulted in unsatisfactory compromises, changes in direction and retractions, and poor
implementation.

One important unintentional weakness in the Basic Law is that the relationships
between the central institutions are inadequately described and that they can function
within their prescribed powers without necessarily interacting in a coherent and unified
way. For example, it is not incumbent upon senior civil servants to attend the Legislative
Council. They might be required to do so under the Legislative Council Powers and
Privileges Ordinance but this would involve a cumbersome procedure. Immediately after
1997, senior civil servants were less diligent in providing members of the Council with
information on bills or appearing in person, partly, it seems, because they felt that they
were afforded some protection against undue legislative interference in policy-making
by the Basic Law. Legislative Councillors of all political persuasions complained that
they were insufficiently informed of the governments legislative programme and that
the government seemed not only unaccountable but also unconcerned that the Councils
power to review proposed legislation might be contravened.25 For their part, civil servants
were concerned that the Chief Executive and the Executive Council and latterly the
Principal Officials often seemed to have different policy agendas from those which
had been presented to the legislature or in the policy addresses. Carefully formulated
proposals were often nullified by ill-considered alternatives or vetoes.

Some of these unintended consequences were caused as much by the way in which
post-1997 politics developed as they were by the lack of specific provisions in the Basic
Law governing relationships between the central institutions. But the absence of those
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35
provisions meant that there were uncertain areas in resolving differences between the
executive authorities, which gave the public an image of a government at war within
itself. Other institutions, such as the Legislative Council, essentially became alternative
power bases, whose members often had very different agendas from that of the
government. The reality of politics and constitutional practice in post-1997 Hong Kong
is consequently light years away from the model on which it was based, an unreformed
pre-1984 colonial constitution with centralised and unified power in which an omniscient
government beneficially provided for a grateful population.

The Basic Law was intentionally designed to discourage the development of political
parties.26 In the transitional period, the Chinese government placed particular emphasis on
its relationship with Hong Kongs business and professional elites. It remained hostile to
democratic groups and parties, especially after the Tiananmen Square massacre, probably
viewing political parties as a focal point for popular discontent. In 1992, however, the
Chinese government did sanction the creation of the Democratic Alliance for Betterment
of Hong Kong (DAB) which brought together leftist organisations such as the Federation
of Trade Unions and which sought to pose a challenge to the electoral dominance of
the democrats in the directly elected seats to the legislature. Despite finding favour
with Beijing, when Tung Chee-hwa selected his post-1997 Executive Council, only
one member of the party was chosen. There is no requirement in the Basic Law that
Executive Councillors or Principal Officials should be drawn from political parties and
neither Tung nor the Chinese government appeared to want to breathe life into them by
creating an avenue of access to the decision-making process.

The failure to do so led to serious problems in securing Tungs position in the
Legislative Council.27 Although the electoral system meant that a majority of members
generally supported the government, there was no government party in the Council which
could ensure that the executives legislative programmes would always be approved. The
Basic Law does not take into account the possibility that the Legislative Council might
be consistently opposed to the Chief Executives policies except insofar as it provides
the Chief Executive with the power of dissolution. If the Chief Executive resorted to
dissolution before the term of the legislature expired, clearly a constitutional crisis would
have already resulted and would likely continue.28

Relationships between the government and the Legislative Council have improved
since their nadir in 1998 and 1999. In July 2002, when Tung Chee-hwa was re-elected
unopposed, leading figures from the Liberal Party and the DAB were appointed to
the Executive Council. His successor, Donald Tsang, went further and appointed a
prominent former Democratic Party leader, Anthony Cheung Bing-leung, to the Council.
The interaction between the executive and the legislature has also become more
institutionalised and friction over the governments poor briefing of Councillors has
been reduced. Nonetheless, the system still does not work entirely as the drafters of the
Basic Law intended. The Legislative Council has expanded its powers to their fullest,
if still limited, extent under the Basic Law while the Chief Executive has never been
able to exercise all of his formidable powers. A Chief Executive who was elected under
universal suffrage and who was the choice of the people would be in a much stronger
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36
position in relation to both the Legislative Council and civil society organisations but
that cannot happen until 2017 at the earliest.

The intention of the Basic Law to reduce the influence of political parties has had
major consequences for the way in which demands are expressed. If parties are powerless
to bring about change, their utility rapidly diminishes and people will look elsewhere to
express their views. This helps to explain the rise of civil society in Hong Kong and the
emergence of many different interest groups often fragmented, sometimes opposed
to each other but also, as the demonstration of 1 July 2003 showed, often able to
work together in coalitions outside the formal political institutions. The rapid increase
in pressure groups and the inadequacy of parties as a means of articulating demands
has institutionalized the street protest as a way of voicing grievances.

The restricted role of political parties has helped to contribute to the disarticulation
of the system. Parties have been faced with the difficult task of establishing their
positions after pressure groups had expressed their opposition to particular government
measures. In some instances, such as the movement to stop the governments reclamation
of part of the harbour, parties were even forced to reverse their previous support for
the government and side instead with the pressure group.29 When this occurs, pressure
groups are serving notice on government that they can, under some circumstances,
veto approved government policies. This means that government can never be entirely
certain that a group might not emerge from outside the known political universe,
gather popular support, organise demonstrations, and eventually force the government
to retract or modify its original position. The government has been not able to devise
appropriate, accurate or credible consultative mechanisms to assess views and aggregate
demands. The consequence has been that policy sometimes appears to be made with
little knowledge of the political realities of implementation.
The Interpretation of the Basic Law

The difficulty of working within the formal provisions of the Basic Law, the politics of
making laws and regulations under the system, and the problems of legitimacy which
have ensued are well illustrated by the controversies that arose over the interpretation
of the clauses in the Basic Law relating to right of abode and national security. The
attempt to introduce national security legislation, in particular, became a defining moment
in Hong Kongs political development, one which increased political consciousness,
generated deep emotions and galvanised enormous support for a cause.30 When a
constitution lacks legitimacy, issues which might otherwise be easily resolved take on a
wider and deeper political significance with a mobilisation of forces on both sides of the
argument. The legitimacy of the constitution itself becomes part of the controversy.
Right of Abode
Article 24 (3) of the Basic Law provides that persons of Chinese nationality born outside
Hong Kong to a Chinese citizen born in Hong Kong or resident in the territory for not
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37
less than seven years are entitled to become permanent residents of the SAR. Although
the number who might exercise this right was not known, the prospect of a flood of
new migrants from the mainland after 1997 was sufficient to raise official concern.
Consequently, one of the first acts of the Provisional Legislative Council (PLC) was
to pass legislation requiring any eligible offspring to obtain certificates outside Hong
Kong entitling them to immigrate to the SAR. By this means, the government thought
that it would be able to control the influx administratively and presumably reduce its
potentially detrimental impact on government expenditure and social services. The issue
initially, then, was focused on the question of whether the right of abode was an absolute
right under the Basic Law or whether it might be qualified by administrative decisions
on whether a certificate of entitlement should be granted.

When the legislation was appealed in the courts, the issue soon acquired much
wider constitutional significance. In the Court of First Instance, the judges ruled that
any Chinese-born offspring of a Hong Kong person had an automatic right of abode
under the Basic Law. This was subsequently modified by the Court of Appeal, which
found that the right of abode only existed if the parent was a permanent resident of
Hong Kong. In January 1999, however, when the issue reached the Court of Final Appeal
(CFA) in the case of Ng Ka-ling v Director of Immigration, the judges unanimously
decreed that children in China, who were born to permanent residents, had right of
abode. In the course of the judgement, the Court felt obliged to state its views on its
own constitutional position, on the right of Chinese political institutions to interpret
Hong Kong law, and on the legality of the PLC. The Court saw its role as acting as a
constitutional check on the executive and legislative branches of government to ensure
that they act in accordance with the Basic Law.31 And then it went further:
laws which are inconsistent with the Basic Law are of no effect and are
invalid. Under it, the courts of the Region have independent judicial power
within the high degree of autonomy conferred upon the Region. It is for
the courts of the Region to determine whether an act of the National Peoples
Congress or its Standing Committee is inconsistent with the Basic Law,
subject of course to the provision of the Basic Law itself.32
Just over a week after the CFA had released its judgement, four mainland legal scholars
who had been involved in drafting the Basic Law issued a statement attacking its
decision. Since the New China News Agency published their statement, it was taken to
represent the official position of the Chinese government. They argued that the starting
point of the one country, two systems concept was that of one country and that it
followed that, since the National Peoples Congress (NPC) was the institution with the
highest authority in the country, its Standing Committee, not the CFA, had the right to
interpret whether the laws of Hong Kong were consistent with the Basic Law.33

The Hong Kong government itself then sought a clarification from the Court
because, as its counsel argued, there was some concern that the Court was setting itself
above the sovereign.34 The Court then retreated from its previous position, claiming that
it did not question the authority of the Standing Committee of the NPC under Article 158
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38
of the Basic Law, a provision that states, quite unequivocally, that the power to interpret
the Basic Law rests with the Standing Committee. These developments opened the way
for an appeal from the government to the Standing Committee against the Courts original
decision. In April 1999, the government produced figures estimating that the numbers
seeking right of abode might be as high as 1.67 million and, in May, the Executive
Council announced that it would appeal the decision.35 The Standing Committee then
declared that mainland children who were born after their parents became permanent
residents of Hong Kong had no right of abode and that certificates of entitlement to
emigrate were valid requirements.

The right of abode issue festered on with further court cases and sometimes
violent demonstrations. In 2002, a majority of the 5,000 right of abode seekers lost
their claims.36 How was the outcome interpreted? There were two viewpoints. The
Chief Executive maintained that the Standing Committees decision was entirely legal
and constitutional and that the rule of law would never be compromised.37 His future
Secretary for Constitutional Affairs, Stephen Lam Sui-lung, argued that the original
CFA decision had been respected, that several thousand claimants had been allowed to
remain, and that the SARs high degree of autonomy under the Basic Law had not
been placed in jeopardy by the governments decision to refer the case to the Standing
Committee.38 Academics, too, have argued that the constitutional principles enshrining
Hong Kongs autonomy have been upheld.39 On the other side of the argument, the
view is that the government seriously compromised Hong Kongs autonomy and that it
subverted the legal system. The Chairman of the Bar Association, for example, argued
that the political will of the government has prevailed over due process and that any
CFA decision is only final if the government wants it to be.40 Academics have also
queried whether the legal system can withstand the kind of pressures that it has faced,
not only from the right of abode issue but from other cases where the government failed
to prosecute or otherwise seemed to take a cavalier attitude towards due process.41

The right of abode issue was about much more than the question of whether Chineseborn children of Hong Kong residents should be allowed to stay in the SAR. It brought to
a head concerns about the rule of law and sparked debate over the governments action.
It weakened the political and judicial institutions, calling into question the legality of
the PLC and the powers of the CFA. And it heightened fears that the high degree of
autonomy that Hong Kong was supposed to enjoy after 1997 would be eroded by the
two governments. Each of these developments had serious consequences for regime
legitimacy. They reduced the credibility of the institutional framework because of the
evident conflict between the government and judiciary and they increased the tension
between the beliefs of the people about the importance of the rule of law and the
independence of the judiciary, on the one hand, and the actions of the government, on
the other.
Article 23 of the Basic Law
Scarcely had the dust settled on the right of abode issue than the government decided
to introduce legislation to deal with subversion, treason, sedition and the theft of state
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39
secrets under Article 23 of the Basic Law. During the first Tung Chee-hwa administration,
the government had received some credit for the fact that it had not moved to implement
the provisions of Article 23. But soon after the second administration came to office, it
announced that new legislation would be introduced. In September 2002, the Executive
Council approved the release of a consultation paper which set out the governments
proposals.42 It was speculated that the timing of the decision to legislate reflected pressure
from the Chinese government who were particularly concerned that the Falun Gong,
whom it regarded as subversive, was not proscribed in Hong Kong. Predictably, there
was strong support for the proposed legislation from senior Chinese government ministers
and from united front groups in Hong Kong.43 Equally predictably, civil liberties groups,
journalists, democratic parties, legislators, the Bar Association and a variety of other
organisations were outraged.

Article 23 states that:
The Hong Kong Special Administrative Region shall enact laws on its own
to prohibit any act of treason, secession, sedition, subversion against the
Central Peoples Government, or theft of state secrets, to prohibit foreign
political organisations or bodies from conducting political activities in the
Region, and to prohibit political organisations or bodies of the Region from
establishing ties with foreign political organisations or bodies.
The original article covering these concerns in the draft Basic Law had simply specified
that the SAR shall prohibit by law any act designed to undermine national unity or
subvert the Central Peoples Government.44 In January 1989, in a further draft, it became
Article 23 and specified that the Hong Kong SAR shall legislate on its own to prohibit
any act of treason, splitting of the state, sedition and the theft of state secrets.45 After
the Tiananmen Square massacre, the article was further strengthened to include the
reference to foreign political organisations. In 1996, the colonial government attempted
to finesse the issue by introducing a bill which included reasonably liberal definitions
of the new crimes of secession and sedition. The Chinese government then objected
to the legislation on the grounds that it would infringe upon the authority of the SAR
legislature.46 There was also strong opposition from the legal profession and from civil
liberties groups and the sections of the bill containing the offences of secession and
sedition were eventually dropped.47 As the SAR government, and no doubt the Chinese
government saw it, this created the obligation to legislate under Article 23 in the interests
of national security.

The Hong Kong government moved cautiously in its attempt to implement Article
23. Its fundamental premise was that offences should be defined as specifically as
possible so that existing civil liberties would not be threatened. It was well aware that
there would be substantial opposition not only from journalists, legislators, religious and
civil liberties groups but also from business if it introduced new offences which were
vaguely worded and open to different interpretations. Under existing laws, Hong Kong
already had provisions to deal with treason and sedition but none to cover secession or
subversion. The consultation document provided that these offences would be defined
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40
more precisely to fit specific circumstances, such as, for example, joining with foreigners
to overturn the government of the PRC or inciting others to violence or public disorder.48
Similarly, the offence of theft of state secrets, which particularly alarmed journalists,
was to be covered by the existing Official Secrets Ordinance with the addition of a new
offence of unauthorised access to, transmission of or dealing with protected information
andunauthorised disclosure of protected information.49 On secession and subversion,
the government proposed to make it an offence to withdraw a part of the PRC from its
sovereignty and to intimidate the government of the PRC and to attempt to overthrow
it.50 Not everyone was convinced that the government had been able to define the offences
unambiguously. The Bar Association, for example, objected strongly to the proposals. It
claimed that the offences were not clearly and tightly defined. It thought secession was
adequately covered under existing legislation and that subversion was not an offence
known to the common law.51 Bankers and business people, too, expressed concern that
the proposed laws might restrict the free flow of information.52

The consultation document provoked strong objections in three other respects.
The first was that it was not specified exactly what was to be included in the legislation
and that the public did not therefore have an opportunity to comment in advance on
whether the laws might violate their civil liberties. The former Chief Secretary, Anson
Chan On-sang, the chairman of the Democratic Party, Martin Lee Chu-ming, and the
Bar Association called for a white bill, containing the proposed legislation, before the
completion of the consultation period.53 The governments response did not aid its cause.
The Secretary for Justice argued that, if the principles of the consultation document were
not accepted, there was little point in introducing a white bill while the Secretary for
Security, Regina Ip Lau Suk-yee, said that she did not think that taxi drivers, restaurant
waiters and MacDonalds staff would study the provisions of a white bill in detail.54
Later, in defending the decision to legislate under Article 23 to university students, she
was reported to have said Dont believe democracy will be a panacea. Adolf Hitler was
returned by universal suffrage and he killed seven million Jews.55 Critics were at pains
to point out that Hitlers accession to power was scarcely a showcase of democracy.56
But the comment also raised the central question of how committed the government
was to the democratic process as a means of protecting civil liberties.

The second major concern related to freedom of expression and whether the Chinese
government would continue to tolerate groups in Hong Kong who were opposed to it.
The Falun Gong and the Hong Kong Alliance in Support of the Patriotic Democratic
Movement in China were believed to be particularly vulnerable. In the case of the Falun
Gong, the Chief Executive had already labelled it an evil cult and had said that the
government would eventually legislate under Article 23 in the context of his discussion
of the activities of the sect.57 Sixteen Falun Gong members had been charged with
obstructing and assaulting a police officer. The government argued that there was no
intention to target the Falun Gong and that its members had been prosecuted because
they committed an offence, not because they were Falun Gong. The Bar Association
thought, to the contrary, that the Falun Gong might well be proscribed if the legislation
was passed.58 The Secretary for Security also dismissed the suggestion that the Alliance
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41
would be banned, saying that a Hong Kong group would have to be funded by a mainland
group for a subversive connection to be established and that it would need to advocate
the use of force for an offence to be committed.59 Despite the Secretarys reassurances,
there remained suspicions that the aim of the legislation, at the behest of the Chinese
government, was to bring in more controls over political groups who were perceived
to be threats to national security.

A third, and related, concern was the equally strong suspicion that the legislation
would have a detrimental effect on the freedom of the press. In 1994, a Chinese court
sentenced a Hong Kong journalist, Xi Yang, to twelve years in jail for reporting on
the sale of gold reserves by the Bank of China.60 The offence of theft of state secrets
could clearly be interpreted very widely. Once again the government attempted to allay
the fears of journalists and others.61 The Secretary of Justice revealed that Xi Yangs
offence had been to refuse to disclose his sources. He had obtained unauthorised
access to information and unauthorised access constituted theft of state secrets. As the
Legislative Councillor Margaret Ng noted, the government was proposing to increase
the unauthorised disclosure offence from two to five years. Is it any comfort Ng asked,
that in future Hong Kong reporters in Xi Yangs shoes may be likely to be sentenced
to fewer years than he?62

The consultation period ended on 24 December 2002. By that time, the government
had received 97,097 submissions containing 340,513 signatures.63 There had also been
very substantial demonstrations, both for and against the proposals, and heated debates
in the press, on television and on the radio. The government, which again appeared to
be using the consultation process to legitimise what it had already decided, divided the
results into four categories: submissions by organisations, submissions of original letters,
submissions of pre-printed, standard letters; and signature forms. The organisations
came out overwhelmingly in favour of the governments stance with 925 organisations
supporting enactment of the legislation and 65 opposed to its position. Submissions
from original letter writers were 56% in favour and 27% against while pre-printed
or standard letter writers were 76.3% supportive with 20% opposed. Of the signature
letters, however, only 25.5% supported the government while 72.2% were opposed.64
The differences between the various forms of submission reflect the different tactics
of the supporting and opposing groups. The united front groups tended, as they had in
past consultative exercises, to deliver pre-printed letters to leftist schools, unions and
employees of mainland firms. The opposing groups were more likely to seek support
for their position in signature campaigns, in street demonstrations and group meetings.
Those opposed to the legislation did constitute a majority of the signatures received
with some 175,823 signing the forms.65 Given the subsequent events, this would seem
to have been more reflective of public opinion than asking organisations for their views
or counting cyclostyled forms. The Hong Kong Transitions Project found 54% of its
respondents strongly disagreeing or disagreeing with the proposition that now is the time
to legislate on Article 23; students and educators were the most opposed while those who
had retired were most supportive of the government.66 There were numerous complaints
about the governments consultative methods and its analysis of the outcome.67
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42

The government, which had argued that there was strong support for its actions, did
pay some attention to the consultation exercise. It recognised that there was significant
opposition to its proposals and it modified them in the legislation that was eventually
presented to the Legislative Council.68 The Secretary for Security announced that the
government would definitely not extend Mainland laws or concepts to Hong Kong.69
She noted significant changes to the major categories to which the legislation applied.
Treason was only to apply to Chinese nationals whereas previously permanent residents
might have been guilty of the offence; secession was only to involve acts which resulted
in engaging in war, using force, or serious criminal means; the threat of force was
removed as a condition of subversion; for sedition, there was a need to show intent;
and the notion of unauthorised access as an offence for theft of state secrets was
dropped in favour of illegal access.70 With those changes, the government was able to
present a bill to the Legislative Council, the National Security (Legislative Provisions)
Bill, which only amended three existing ordinances.71 The legislation was intended to
give the impression that there would not be much change to existing practices; the
government provided extravagant guarantees that freedom of expression and other civil
liberties would not only be protected but might even be extended by the more precise
definition of offences; that it respected public opinion; and that the major concerns of
the pressure groups had been met. It clearly hoped that Hong Kong could move on to
other problems, subsequently setting a deadline of 9 July 2003 for the passage of the
legislation.

Opposition to the legislation continued to build. Leading lawyers remained critical
of its provisions and fears were aroused by the power given to police to search homes
without a court warrant under conditions where national security might be in question.72
Again, the government sought to allay public suspicions. On 3 June, the government
introduced further amendments to the legislation, seeking to provide more safeguards
for civil liberties and specifying that the power to search homes without a warrant could
only be authorized at the Assistant Commissioner of Police level or above.73 On 14 June,
a seminar on the legislative provisions was held at the University of Hong Kong and was
attended by senior government officials, most of the democratic legislators and leading
journalists and critics of the legislation. The Deputy Solicitor-General spoke of the
legislation as a liberalising measure and argued that it was consistent with the human
rights safeguards provided in the Basic Law.74 On the same day, the legislation reached
the Bills Committee of the Legislative Council. With only one democratic legislator
present, the government, supported by the conservative members of the Council, pushed
the Bill through the committee stage and passed, what the editor of the South China
Morning Post called, an unprecedented motion to prevent further clause-by-clause
debate on the legislation.75

This process undermined the governments claim that it was willing to listen to its
critics and sparked increased opposition to the bill. The amendments to the legislation,
rather than quelling public anxieties, seemed to increase them. A poll conducted by the
University of Hong Kongs Public Opinion Programme in late June found that 55%
of 1,023 respondents were against the enactment of Article 23 with 84% opposed to
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43
allowing the police to search homes without a warrant.76 Pressure groups political
parties, churches, human rights groups and trade unions united to organise a
demonstration for 1 July, a holiday celebrating Hong Kongs return to China. The
organisers of the demonstration, the Civil Human Rights Front, hoped the protest would
attract a crowd of 100,000. In the event, an estimated 500,000 marched through the
streets.77 The demonstration reflected not only opposition to the legislation under Article
23 but widespread discontent with government policies and with Tung Chee-hwa, in
particular. Tungs initial response was to make even more concessions to the legislation
in the hope of mollifying his critics. He announced that the provisions proscribing a
local organisation subordinate to a mainland organisation, which might have been used
to ban the Falun Gong, for example, the prohibition on public interest as a defence for
the unlawful disclosure of information, and police powers to search without a warrant
would all be dropped and proposed that the second reading should go ahead as planned
on 9 July.78 But this was all too little, too late.

The unlikely catalyst for defusing the immediate situation was the Chairman of the
Liberal Party and member of the Executive Council, James Tien Pei-chun. Following
the demonstration, Tien paid a hurried visit to Beijing. On his return, he announced
his resignation from the Executive Council and urged the government to defer the
legislation until December. He noted that the Chinese government wanted the legislation
passed although it had no clear preferences on its details or on the timetable for its
passage79 and he pledged the Liberal Partys continued support for the Bill. Without
the Liberal Partys more immediate support and in the face of the prospect that some
of the independent legislators might join with the democrats to oppose the Bill and that
hundreds of thousands of demonstrators would surround the Legislative Council building
itself, there was little option but for the Chief Executive to defer the resumption of the
second reading.80 As it was, an estimated 30,000 to 50,000 people, calling for Tungs
resignation, demonstrated outside the legislature on 9 July even though the second
reading had been postponed. A further 20,000 demonstrated on the following Sunday.

The Chief Executive had essentially run out of ammunition and his government
was in increasing peril. On 16 July, two Principal Officials, Regina Ip Lau Suk-yee, the
Secretary for Security, and Antony Leung Kam-chung, the Financial Secretary, resigned.
In both cases, care was taken to distance them from the crisis. The Secretary for Security
said that she had submitted her resignation on 25 June although she expressed deep regret
that the legislative work to implement Article 23 had not been completed on schedule.81
The Financial Secretarys resignation was linked to controversy over the purchase of
a car prior to an increase in registration fees in the budget although it was no doubt
politically convenient for him to serve as a sacrificial lamb. In a final attempt to bolster
his fading support, the Chief Executive promised to re-open consultation on Article 23,
to hold regular meetings with politically influential groups, to remove the Secretary for
Health from the chair of the committee investigating the SARS outbreak, to enhance
economic co-operation with China, to direct policy bureaus to be more consultative and
to adopt whatever positive measures could be found to improve the sluggish property
market.82 He then flew off to Beijing to discuss the crisis with Chinas leaders.
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44

The extent of the opposition to the legislation and Tung Chee-hwas continuing
tenure as Chief Executive caused problems for the Chinese government. Tung was their
man and they were committed to the passage of the legislation. To intervene directly,
however, would have raised the issue of the autonomy of the SAR and possibly further
strengthened the opposition to the legislation. The Chinese President, Hu Jintao, noting
that the central government was extremely concerned about events in Hong Kong,
simply re-affirmed his support for Tung and said that he expected that the legislation
would be passed after earnest and wide-ranging consultation had led to better
understanding of the legislation by local compatriots.83 Yet, if the legislation was not
understood after nearly a years consultation, it seemed unlikely that more talking or
more concessions would make much difference. The issue of Article 23 had gone beyond
the content of the legislation itself to become symbolic of much that was wrong with
the system and with government policies.

Although the governments initial response was simply to delay the legislation
and hope to see it pass at some indefinite point in the future, the political fallout from
the events of July 2003 saw a marked decline in support for the governments ally, the
DAB. With elections to the Legislative Council due in mid-2004, party leaders were
convinced that the governments stance on Article 23 would be a millstone around
their electoral necks.84 The Chief Executive was receptive to their view that it should
postpone enactment indefinitely. The Chinese government was also persuaded to support
the DAB position, possibly by a party delegation in Beijing. On 5 September, Tung
announced the withdrawal of the National Security Bill and its indefinite postponement.85
The following day, perhaps in the hope of regaining some lost electoral support for the
DAB, the Chinese Vice-President stated publicly that the party was the largest and
most influential political group in Hong Kong.86

What do the dramatic events of July 2003 tell us about the relationship between
government and the people? The process of attempting to bring Article 23 into effect
revealed the mistrust that a majority of the people had for their government and its
political executive. It highlighted the inadequacy of the existing ways of assessing
opinion and obtaining consent. And it was perceived to strike at the heart of the rule
of law and the rights and freedoms which had been guaranteed when China resumed
sovereignty over Hong Kong. Despite the governments view that the legislation was
a liberalising measure, a majority of the population took the view that the measures
would restrict their liberties. Legislating Article 23 also damaged the governments
credibility because it was widely believed that the Bill had only been introduced because
the Chinese government wanted it, not because it was necessary. If the government was
no more than a surrogate acting on Beijings behalf and the legislation did not have the
support of the people, how could such an unpopular course of action be legitimated?
The Chief Executive had been selected rather than elected and appeared to be bent on
a course of action from which no institutional or popular checks could deflect him. As
a newspaper headline succinctly put it, Still the mainlands man, still with legitimacy
problems.87
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45

The July demonstrations were no doubt prompted by much more than the issue of
the legislation. Frustrations over the economy, problems with the SARS epidemic and
inept policy implementation unquestionably played their part.88 That Article 23 became
symptomatic of these difficulties and served to unite different groups in opposition to
the government may have had much to do with the issue itself. It affected everyone in
Hong Kong rather than specific groups. And it raised very clearly the issue of legitimacy.
The demonstrations indicated that the government had neither the consent nor the legal
and moral authority to introduce such legislation and that its mandate did not extend
to re-inventing the rules under which the people would in future be required to interact
with their government.
Other Constitutional Issues

In many jurisdictions, a written constitution has set the parameters within which the law
has subsequently developed. Because the constitution is superior to ordinary legislation,
those who draft and pass the laws are careful not to violate its provisions. Similarly, in
Hong Kong, the Basic Law prevails in the event of a conflict between its provisions and
existing legislation. However, unlike some other jurisdictions, most of the ordinances
which the government enforces pre-date the Basic Law. Although those laws have
the same validity as before 1997, under Article 160, they must be amended or cease
to have force if they are in conflict with the Basic Law. This has opened the door for
an increasing number of legal challenges to the government on the grounds that it is
acting unconstitutionally. Applications for judicial review rose from 138 in 20022003
to 212 in 20062007.89 In 2006, of 132 judicial reviews, 128 involved the government.90
The Legal Aid Department and the Court of Final Appeal have subsequently acted to
reduce the number of judicial reviews. In 2007, over half the applications for legal aid
for judicial review were rejected by the Department and, in November 2007, the Court
of Final Appeal ruled that cases have to be arguable, not just potentially arguable,
in order to obtain leave for judicial review.91

Some examples may serve to illustrate the type of issues on which the courts have
had to pass judgment. In 1997, the legality and competence of the Provisional Legislative
Council was challenged on the grounds that it was not, as the Basic Law provides,
established by election. The Court dismissed the case finding that a Committee, set
up under Chinese law, had the power to make arrangements for the transition.92 In the
same year, the Chief Executives right to appoint and dismiss civil servants was also
unsuccessfully contested.93 Two years later, an elected Regional Councillor argued that
the governments decision to abolish the Regional Council was unconstitutional since
it violated his rights under the International Covenant for Civil and Political Liberties
which is enshrined in the Basic Law.94 The appeal was dismissed. Several cases have
involved ordinances where the question before the Court has been whether provisions
in the Basic Law override the legislation. In the Town Planning Board v Society for the
Protection of the Harbour, the Court found that there was nothing in the Basic Law that
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46
affected the provisions of the Harbour Protection Ordinance and found in favour of
the Society.95 In the Catholic Diocese of Hong Kong v Secretary for Justice, the church
argued that, by amending the Education Ordinance, the Education Bureau was in effect
replacing the previous education system which was guaranteed under the Basic Law.
The appeal was dismissed.96

The extent to which civil liberties protected in the Basic Law are undermined by
existing legislation has also been an issue. In Leung TC William Roy v Secretary for
Justice, a homosexual successfully argued that his fundamental right under the Basic
Law not to be discriminated against was undermined by the provisions of the Crimes
Ordinance.97 In Leung Kwok Hung and Another v Chief Executive, two political activists
successfully argued that the legal basis of the governments covert surveillance activities
under the Telecommunications Ordinance was in breach of Article 30 of the Basic
Law.98 In the Secretary for Justice v Ocean Technology and Others, the government
sought to close down Citizens Radio, a talkback radio programme, on the grounds that
it was not properly licensed and that its frequencies might interfere with aeronautical
navigation. The defendants argued inter alia that the Telecommunications Ordinance
infringed their rights enshrined under the Basic Law to freedom of speech and freedom
of communication.99 As these examples suggest, the potential areas in which conflict
between existing legislation and the Basic Law might occur are very wide-ranging.
In formulating policy, the government has difficulty in anticipating the kind of legal
challenge that it might face. Yet, as the harbour protection case has shown, once the
case reaches the legal system, there can be costly delays in implementing policy.

In a settled political system, challenges to the constitution in the courts might be
resolved harmoniously by amendments to legislation or, if the matter was of sufficient
importance, to the constitution itself. In the charged political atmosphere of Hong Kong,
where the legitimacy of the constitution is in question, where the sovereign power has
so far refused to make amendments to it, and where civil society organisations have
become increasingly sophisticated in their use of legal avenues to achieve their goals,
the Court of Final Appeal has become an arena for the judicial review of many decisions
which often revolve around divisive political issues.

Although the Basic Law has failed to provide a system in which Hong Kongs
executive authorities are little more than weakly accountable to the legislature and to
the public, it has nonetheless become something of a double-edged sword for those
who would wish to implement fully the notion of an executive-led government. The
provisions in the Basic Law to protect civil liberties and to introduce universal suffrage
have meant that an alternative conception of the political order continues to persist,
supported by street demonstrations and occasionally underwritten by court judgments.
It is possible that, as constitutional conventions gradually emerge which establish more
precisely what the executive authorities may or may not do and what the relationship
between the principal institutions should be, the Basic Law may become more
institutionalised and that the combination of its written provisions and constitutional
conventions may provide a more widely accepted political framework. For the moment,
it is a battleground between entrenched conservative elites who wish to maintain a
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47
strong centralised system of government and slow progress towards universal suffrage
and those who favour a more politically accountable government, a democratically
elected Chief Executive and Legislative Council, and the fullest possible protection
for civil liberties.
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Accountability and the Political System
he test of whether a government is politically accountable is not whether the

system is representative or democratic but whether external bodies, be they
voters, legislatures or a superior level of government, have the power to impose
sanctions on office-holders in the event of unsatisfactory performance.1 Judged by this
criterion, the Hong Kong government is accountable to the government of the Peoples
Republic of China and Principal Officials are accountable to the Chief Executive.
But the Chief Executive and Principal Officials are only very weakly accountable to
the Legislative Council and the voting public. Voters cannot remove the government.
And the restricted powers of the Legislative Council means that it cannot hold the
government fully accountable.

Political accountability depends not simply on the provisions of the constitution
but also on the way in which power is actually exercised. Even in constitutions that
have never been amended, such as the Basic Law, conventions can develop in which
a government will gradually concede that it should be held more accountable for its
actions. Alternatively, of course, it is possible that a government may act repeatedly in
ways that violate the constitution which then tends to become irrelevant. In addition,
measures may be taken within the framework of the constitution which significantly
alter the way in which power is exercised. During his first term in office, Tung
Chee-hwa made two such changes, abolishing the Urban and Regional Councils
and introducing the Principal Officials Accountability System (POAS). The Chief
Executives main objectives seem to have been to centralise power and to exert more
political control over the civil service although he argued that the abolition of the
Councils would result in greater efficiency and that the POAS would result in more
accountable government. In 2008, the system was further extended to include politically
appointed Deputy Directors of Bureaus and political assistants. In this chapter, we
examine the effects of these measures on the broader issues of representation and
accountability in Hong Kong.
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50
The Abolition of the Urban and Regional Councils

The Urban and Regional Councils (the Municipal Councils) were statutory bodies set
up to introduce a measure of local government to Hong Kong. From 1973 onwards,
the Urban Council was financially autonomous and could decide on how its resources
would be allocated and managed.2 The Councils provided important services through
the departments attached to them the Urban Services Department and the Regional
Services Department in the areas of food safety and environmental hygiene, arts and
cultural services, and sports and recreational services.3 Until 1982, when District Board
elections were held for the first time, Urban Council elections were the only means
by which Hong Kong citizens could express their views through the ballot. Although
elections were contested, they did not attract much interest and turnout was low.

The Basic Law makes no specific mention of the Municipal Councils. Article 97
does state, however, that district organisations which are not organs of political power
may be established for consultative purposes or to provide services. In October 1997,
Tung Chee-hwa called for a fresh look at the regional organisations, the Municipal
Councils and the District Boards, so as to decidewhether the present structure of
local representative government will continue to ensure the efficient and responsive
delivery of services.4 In the following June, the Constitutional Affairs Bureau released
a consultation document in which it outlined government concerns over funding
arrangements, the fragmentation of responsibilities for food and hygiene, arts and culture
and sports and recreation, the issue of whether there was a need for both district and
municipal organisations, and the question of whether the role of the District Boards
should be expanded.5 The government made quite clear that its preferred option was
to dissolve the Municipal Councils and to transfer their responsibilities to other policy
bureaus and to the District Boards.6

The debate over the future of the Municipal Councils took place in the context of
the decision in December 1997 to slaughter approximately 1.2 million chickens after
an outbreak of avian flu. The Urban Services Department and the Regional Services
Departments were responsible for the slaughter of the chickens but it was not carried out
properly, leading to many complaints. There were some who felt that the governments
preference for abolishing the Municipal Councils was using the chickens to kill the
Councils.7 The government denied this but claimed strong public support for an enhanced
role in food and hygiene matters, probably because of the avian flu crisis.8 Its decision
to review the Municipal Councils and the District Boards pre-dated the avian flu crisis
and probably reflected longer-standing central government concerns about inefficiencies
and financial practices in the Urban Services and Regional Services Departments. The
Chinese governments decision not to recognise the electoral arrangements in place at
the retrocession meant that all members of the Municipal Councils and District Boards
were appointed after 1997 and that a review of the composition and functions of the
councils and boards would probably have proved necessary.

An immediate political concern for the government was to deal with claims that
the dissolution of the Municipal Councils would have adverse effects on political
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51
development and representation. According to the governments report on the consultation

exercise, three arguments were advanced in favour of retaining the Councils: that they
had decision-making powers and served as a useful training ground for future politicians;
that they enabled public participation in the making of local policies through their elected
representatives; and that they could effectively supervise the work of the executive
departments.9 The government rejected these views citing the authority of unnamed
leading social scientists.10 It maintained that there was sufficient representation and
enough public offices to train future politicians and that future democratic development
should focus on elections to the Legislative Council.11 The government was accused
of manipulating the results of the consultation exercise, of pre-judging the issue and
of unnecessarily shortening the consultation period.12 In the end, its original view
prevailed and the Municipal Councils were abolished. At the beginning of 2000, the
functions undertaken by the Urban Services and Regional Services Departments were
transferred to a new Food and Environmental Hygiene Department and a Leisure and
Cultural Services Department directly under the control of the Hong Kong government.
The eighteen District Boards were retained but were renamed District Councils. The
government decided that it would reserve the right to appoint up to 102 members to the
Councils as against 390 who would be elected and 27 ex officio members who would be
retained. In the previous election in 1994, with the exception of the ex officio members,
all members of the District Boards had been elected.

Initially, the abolition of the Municipal Councils could be seen as consistent with
the continuing dominance of the senior civil service and the strengthening of the existing
system. There had been concern, for example, even before the handover, about possible
corruption, over-staffing and poor supervision in the Urban Services and Regional
Services Departments. However, the longer-term effect of the abolition of the Municipal
Councils and the changed arrangements for the composition of the District Councils
was to eliminate centres of potential opposition to the political executive. Urban and
Regional Councillors had a history of criticizing the government. In the District Councils,
which potentially provided a similar forum, the Chief Executive used his right to appoint
over 25% of the members of the Councils to nullify the successes of the democratic
parties in the November 2003 elections and to ensure that most of the Councils were
pro-government in their orientation.13 Thus, although the changes were sold to the public
as means of promoting efficiency, in retrospect, these developments were a step along
the road towards greater centralisation of authority in an executive-led government.
The Principal Officials Accountability System

In 2000, Tung foreshadowed an even more radical change to the political system
which was aimed, supposedly, at establishing a comprehensive system of public
accountability.14 Public concern over the accountability of the civil service did increase
after 1997. Some serious cases where the government or a statutory body failed to
implement or explain its decisions properly for example, the decision not to prosecute
a newspaper owner whose paper had inflated its circulation figures, a multi-million dollar
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52
scandal surrounding the faulty construction of public housing blocks, the problems with
the opening of the new airport and the methods used in dealing with the avian flu crisis
all called into question the adequacy of the accountability mechanisms.15 The system
that was eventually unveiled, however, appeared to have been motivated more by the
Chief Executives intention to exert more direct political control over the civil service
than to enhance accountability.

The central idea was a new system of appointing fourteen of the Principal Officials:
the three secretaries (the Chief Secretary, the Financial Secretary and the Secretary
for Justice) and the eleven Directors of Bureaus, who would serve on contract at
the pleasure of the Chief Executive. The conditions of service of the five Principal
Officials mentioned in Article 48(5) of the Basic Law who were all civil servants the
Commissioner of Police, the Director of Audit, the Commissioner against Corruption,
the Director of Immigration and the Commissioner of Customs and Excise were to
remain unchanged.16 The Chief Executive would nominate suitable candidates, either
from within or outside the civil service, for the fourteen key Principal Officials positions
to the Central Peoples Government and would also have the authority to recommend
their removal. The fourteen Principal Officials would all be members of the Executive
Council where they would be joined by five unofficial members, who included the leaders
of the Liberal Party and the DAB. The Principal Officials would have the responsibility
for formulating and explaining policies and canvassing support for their policies, would
be answerable to the Chief Executive for the success or failure of those policies, and
would attend meetings of the Legislative Council to answer questions, move bills and
take part in motion debates.17 The critical difference from the existing system was that
the Principal Officials, who, with two exceptions, had all previously been permanent
and pensionable senior civil servants, were now to be replaced by political appointees
who were on contract and, in theory, could be more easily dismissed by the Chief
Executive.

The proposed system was further developed in a government paper presented
to the Legislative Council in April 2002.18 The rationale presented was that it would
enhance the accountability of the Principal Officials for policy failures and would
enable the Chief Executive to dismiss those who were not performing adequately.19 As
a comprehensive system of public accountability, the proposed system was seriously
deficient. The Principal Officials were only accountable to the Chief Executive, not to
the Legislative Council or, in any meaningful sense, to the public. When asked whether
a Principal Official would be dismissed if the Legislative Council were to pass a motion
of no confidence in that official, Tung said that it would be one of my considerations
but not the only consideration influencing my final decision.20 To have developed a
more accountable system would have required amendments to the Basic Law whereas
the changes to the appointment system for Principal Officials could be accommodated
within the existing provisions of the Basic Law. But to amend the Basic Law to introduce
more accountability would clearly have required the support of the Chinese government
and was not apparently, in any case, the Chief Executives primary objective.
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53
The new system was also expected:

to ensure that the Government can better respond to the needs of the
community; enhance coordination in policy formulation; strengthen the
cooperation between the Executive and the Legislature; ensure effective
implementation of policies and provide quality services to the public.21
It was not entirely clear how those goals would be achieved. The newly-appointed
Directors of Bureaus were given greater flexibility to manage financial resources and
were required to produce plans for the re-organisation of their bureaus and departments
which were intended to improve policy co-ordination and implementation. Although
the new financial management system did result in improvements, there were no
immediate benefits in terms of policy co-ordination since each bureau could come up
with its own plan. The relationship between the executive and the legislature might
have been improved if the ways in which the Principal Officials were accountable to
the legislature had been clarified. But most senior civil servants in the bureaus, now to
be called permanent secretaries, would continue to have a public role and would attend
meetings of Legislative Council panels and deal with the media.22 The civil service was
to remain politically neutral but it also had a bounden duty to be loyal to the Chief
Executive and the principal officials of the day.23 There were also unresolved questions
about the relationship between the Principal Officials and the Executive Council. The
Principal Officials were all members of the Executive Council but the Council still had
members who were not Principal Officials. It was expected that the Principal Officials
would meet separately from the Executive Council, raising questions about duplication
and where the final authority for decisions actually lay.24

The fourteen new Principal Officials took office on 1 July 2002. Of those appointed,
five came from outside the civil service.25 In addition, the Financial Secretary, Antony
Leung Kam-chung, and the Secretary for Justice, Elsie Leung Oi-sie, who had been
appointed before the new system was introduced and who retained their positions, had
backgrounds in the private sector. Those Principal Officials who had been civil servants
retained their former roles with the exception of the Secretary for Constitutional Affairs
who went to Housing, Planning and Lands and an official in the Chief Executives office
who became Secretary for Constitutional Affairs. The Secretary for the Civil Service,
unlike the other Principal Officials, was required to be drawn from the ranks of senior
civil servants and was permitted to return to the civil service.26

Almost immediately after the new system came into effect, the extent to which
Principal Officials were accountable for their actions became an issue. On 25 July 2002,
the Hong Kong Stock Exchange (HKEx) released a report establishing the criteria for
the de-listing of low-priced stocks, particularly those that traded below 50 cents for
30 consecutive days. On the following days trading, the market lost $10.91 billion in
market capitalisation.27 The controversial proposals in the consultation paper were rapidly
withdrawn. As the subsequent investigation of the incident showed, there were clearly a
number of parties, including the Chief of the HKEx and Chairman of the Securities and
Future Commission (SFC), who were involved in drafting and submitting the proposal
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54
and who had some systemic, if not personal, responsibility for the subsequent debacle.28
To the extent that the Principal Officials were involved, the Financial Secretary was
absolved because he did not receive a copy of the proposal before it was released and
did not read a copy of the executive summary until 28 July.29 Public attention focused
instead on Frederick Ma Si-hang, the Secretary for Financial Services and the Treasury,
who had received a copy of the proposal but who had not read it.30

The summary table of the proposal arrived in Mas office on 17 July but, since he
had a dinner engagement and then flew to London, he did not return to his office until
22 July and was then too busy to deal with its contents. He first became aware of the
summary table on 26 July.31 On 31 July, the Financial Secretary announced that there
would be an independent inquiry into the incident and the Legislative Council convened
a special meeting of its Financial Affairs Panel. According to the subsequent report of
the investigative panel:
The Secretary was bombarded with a series of hostile and severe criticisms
to which he was unable to acquit himself with either clarity or distinction.
It would have required the skills and experience of a much more seasoned
bureaucrat to have come out of that barrage relatively unscathed.32
Legislative Councillors observed that the Secretary might be regarded as having

underperformed his official duties by failing to keep himself informed, that ignorance
was just as inexcusable as negligence, and that Hong Kongs reputation as a financial
centre might have been jeopardised as a consequence of the proposal.33 In his defence,
Ma accepted that as a principal government official, he was prepared to take a certain
degree of responsibility for the whole incident.34 But clearly he also felt that there were
mitigating circumstances. When the investigative panel did not attribute blame directly
to any individual, Ma initially took this as vindication of his position. Subsequently, in
the face of considerable criticism, he did make a public apology, a development that
the government was eventually to claim demonstrated the force of the accountability
system in action.35

The Penny Stocks incident was the first test of the new system and it aroused
considerable interest. As the investigative panel observed:
The Penny Stocks Incident quickly developed into a political hot potato.
There were criticisms of the role of Government, the SFC and the HKEx
[and] the lack of clarity over the division of responsibilities between the FS
[Financial Secretary] and the Secretary as well as what the accountability
system entailed.36
At stake, too, were the circumstances under which a Principal Official might feel
obliged, or be required, to resign. Many legislators felt that Mas initial refusal to offer
an apology and the Chief Executives contention that the incident had nothing to do
with accountability made a mockery of claims that the new system was an improvement
on past practice.37 Accountability, under the new system, appeared to mean something
much less than resignation or even an apology for poor performance: a requirement,
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55
perhaps, to explain lapses in judgment or inadequate performance but not necessarily

to relinquish office.

A second test of the system was occasioned by quite different circumstances: the
personal conduct of the Financial Secretary. In January 2003, the Financial Secretary,
Antony Leung Kam-chung, purchased a new car, four days after a budget strategy group,
of which he was a member, had considered raising the first registration tax on cars. On
11 February, the strategy group confirmed that it would raise taxes. On 5 March, at a
meeting of the Executive Council at which another Principal Official revealed that he
had recently bought a car, the Financial Secretary failed to disclose his own purchase.38
On 10 March, following media reports, the Financial Secretary apparently offered his
resignation to the Chief Executive although subsequently it was unclear whether his letter
of resignation followed a verbal offer to resign which the Chief Executive had declined.
The Chief Executive then wrote to Leung on 15 March, noting that, although Leungs
actions constituted a breach of the Code for Principal Officials, he had concluded that
your mistake warrants a formal criticism from me but not your resignation.39 A member
of the Standing Committee of the National Peoples Congress reportedly observed that
the matter was no big deal.40

Legislative Councillors thought otherwise. On 17 March, Leung was called before
the Legislative Councils Constitutional Affairs Panel and grilled in much the same
manner as Ma had been.41 Leung claimed that the purchase of the car had been a
practical necessity and that he had no intention to avoid tax but that he had been guilty of
inappropriate behaviour and of an oversight.42 Democratic legislators focused particularly
on the implications of the conflict of interest for integrity and trust in government while
others took the view that it had been an honest mistake. There were also comments
about inconsistencies in the account of his offer of resignation, a central issue in the
subsequent Legislative Council debate calling for the establishment of a select committee
to investigate the matter.43 The motion to establish a select committee was defeated, but
the issue further damaged the credibility of the accountability system and the Financial
Secretarys own position. In addition, the ICAC conducted a separate investigation into
the case, referring the results to the Department of Justice which eventually decided
that there should be no prosecution on the grounds that it could not be proved that
Leung deliberately sought to evade tax.44 Leung and the Secretary for Security, Regina
Ip Suk-yee, eventually did resign in July 2003 following the demonstrations against the
governments proposed legislation under Article 23.

There were two other events which led the new accountability system to be called
into question. In July 2003, the Secretary for the Civil Service, Joseph Wong Wingping, retired from the civil service at the age of 55 and collected his pension. However,
he retained his position as a Principal Official and the office of Secretary for the Civil
Service. Wongs resignation from the civil service was not widely known until October
2003 when the Administrative Services Association, which represented the administrative
grade, the Federation of Civil Service Unions and the Senior Non-Expatriates Officers
Association, raised the issue of whether this might constitute a violation of the rules under
which the accountability system operated.45 Under the rules laid down in April 2002,
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56
the Secretary for the Civil Service had to be drawn from among senior civil servants.46
Once Wong had resigned, so the civil service staff associations argued, he no longer
fulfilled the basic requirement for holding office. The associations saw Wongs retirement
as the end of special representation for the civil service in the ranks of a potentially
hostile political executive. While Wong claimed he would continue to represent the civil
service, the unions clearly doubted whether he would pursue their interests with the same
vigour after his retirement from the civil service.47 In the event, the provision that the
Secretary of the Civil Service should be drawn from among serving civil servants and
not be required to resign or retire from the civil service before taking up the position was
re-affirmed in October 2007. In the context of concerns that the political appointment
of Deputy Directors of Bureaus and political assistants would affect the neutrality of
the civil service, the Constitutional and Mainland Affairs Bureau recommended that the
Civil Service Bureau should not have politically appointed Deputy Directors or political
assistants and that the Secretary for the Civil Service should remain a civil servant.48

Another instance in which the credibility of the accountability system was raised
was in the handling of the SARS epidemic. After the crisis had abated, two inquiries
were launched into whether the outbreak might have been contained more effectively
and whether the Hospital Authority might have been better prepared for the difficulties of
treating patients and the protection of its own staff, some of whom had succumbed to the
disease. The first inquiry was a panel of experts, set up by the Chief Executive in May
2003. The Chief Executive had originally appointed Dr Yeoh Eng-kiong, the Secretary
of Health, Welfare and Food, to head the inquiry over objections that there might be a
conflict of interest. The appointment was rescinded after the July 2003 demonstrations.
The Expert Panel, which reported in October 2003, found that Hong Kong had handled
the crisis well. No individual was deemed to be culpable of negligence, lack of
diligence or maladministration49 and the committee simply made some suggestions for
improvements in the event of any future outbreak.50 The second inquiry was set up by
the Hospital Authority to investigate any shortcomings in its handling of the situation.
The committee found that the Government could have acted sooner and with greater
clarity to warn the community of the potential risks and they were critical of the lack of
co-ordination between the Hospital Authority, the Department of Health and the Secretary
of Health, Welfare and Food. They did not attach specific blame to individuals.51

What the government feared most was the prospect of a select committee set up
by the Legislative Council which would investigate the conduct of Principal Officials
and which would, if past practice were any guide, attempt to attribute responsibility
for shortcomings. Establishing a select committee had been the Democrats preferred
strategy in the Leung case but that had been defeated by the Liberals and the DAB. In
May 2003, however, the DAB voted for a Democratic Party motion on a non-binding
resolution to set up a select committee if the government did not itself establish an
independent commission of inquiry.52 While the other inquiries were in the process of
collecting evidence, the Legislative Council did nothing to set up a select committee.
But once the government-appointed Expert Panel and the Hospital Authority Review
Panel had reported, there was cross-party concern in the Legislative Council that
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57
no officials had been censured for their role in handling the epidemic. In October,
despite a reported government offer to set up an independent commission of inquiry,
legislators voted instead to set up a select committee.53 Legislators saw the SARS expert
committees report as a whitewash that had failed to address a central issue and they
noted public dissatisfaction over its finding that no one was to blame for the handling
of the epidemic.54

The terms of the select committee were carefully considered by the Legislative
Councils House Committee. A majority of the members wanted to avoid the impression
that the select committee would be a witch-hunt but they were adamant that issues
of accountability should be investigated. The terms of reference eventually provided
that the select committee should examine the performance and accountability of
the Government and the Hospital Authority and their officers at policy-making and
management levels with regard to their handling of the SARS outbreak.55 When the
Committee reported in July 2004, it exonerated the Chief Executive, who had refused
to testify on the grounds that it was constitutionally inappropriate in an executiveled government, but was scathing in its criticism of the Secretary for Health, Welfare
and Food whom the Committee said, did not show sufficient alertness in the initial
stages of the outbreak, was confusing and misleading in his public announcements,
did not show the communication skills expected by the public of a policy secretary
and failed to require the Director of Health to add SARS to the list of notifiable diseases
as quickly as he should have done.56 The Secretary apologised to the deceased, family
members and healthcare workers but initially declined to resign.57 Three days after the
Select Committee report had been released, he changed his mind and submitted his
resignation.58

Tung Chee-hwas departure in March 2005, ostensibly on grounds of ill health,
sparked a constitutional debate which had implications for the POAS. After consulting
the Chinese government and mainland law experts, the government proposed that Tungs
successor should serve for two years, the remaining balance of the term. The Secretary
for Constitutional Affairs said that, since there was no express provision in the Basic
Law for the length of the term of a successor, it was appropriate to follow the practice
on the mainland. In any event, he reminded legislators, the Standing Committee of the
National Peoples Congress had the power to interpret the Basic Law.59 The democrats
argued, to the contrary, that Article 46 of the Basic Law provided that the term of office
of the Chief Executive should be five years and that legal opinion in Hong Kong was
overwhelmingly of the view that this should be applied when a vacancy occurred.

The issue was not simply about the length of the term of the new Chief Executive;
there were broader political agendas on both sides. The democrats believed that the
rule of law would be violated if the Chinese and Hong Kong governments arbitrarily
proscribed a two-year term. But they also saw the issue in the context of reforming
the system for electing the Chief Executive. Their hopes of changing the provisions
for the 2007 election had already been dashed, but a five-year term would have raised
the question of reform at an earlier date, if the next election was held in 2010. For
precisely the opposite reasons, the Chinese and Hong Kong governments wanted to
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58
retain the existing small-circle election system for as long as possible. A two-year
term, followed by an election under the existing rules in 2007, would mean that there
could be no changes until at least 2012. In addition, a two-year term offered the Chinese
government a degree of flexibility in its choice of Chief Executive. If Tsang could not
resolve some of the very considerable problems which he had inherited, there was the
possibility of changing the leadership in 2007. There may also have been lingering
suspicions about the wisdom of appointing a high ranking former colonial civil servant
to become Beijings man in Hong Kong. A two-year probationary period would enable
the Chinese government to assess his patriotic qualities and suitability to hold office
for a longer term.

The two-year term, which the Chinese and Hong Kong governments mandated,
placed important restrictions on Tsangs freedom of action. If he were to be elected in
2007, he could not afford the confrontations with civil society that had characterised
the Tung administration. Under Tung, Principal Officials had been encouraged to be
entrepreneurial and to cut through red tape. They did not work so much as a team but
rather as high profile individuals with different agendas and often conflictual relationships
both inside and outside their bureaus and departments. Under Tsang, they were more
disciplined and unified. At the cost of inaction on some critical issues, there were no
new major policy initiatives. Tsang appeared to believe that achieving a consensus on
constitutional development was a necessary pre-condition to making successful policy in
contentious areas.60 Directors of Bureaus were limited to introducing non-controversial
measures or refining existing policies.

Greater collective responsibility was achieved by two means: re-working the
policy hierarchy within government and relying more on senior civil servants to fill the
positions of Principal Officials and top administrative aides. One of the reasons why
Principal Officials under Tung had been relatively independent spirits was because the
system introduced in 2002 in effect downgraded the roles of the Chief Secretary of
Administration and the Financial Secretary. Principal Officials reported directly to Tung
without the previously mediating and authoritative roles played by those officials. This
caused considerable confusion, particularly over the role of the Financial Secretary. Tung
partially addressed the issue in June 200361 but did not resolve the wider problem of
poor policy co-ordination. In the first substantive statement of his first policy address,
Tsang announced that henceforth all heads of bureaus would be required to have their
proposals cleared by the Financial Secretary and the Chief Secretary of Administration in
the Policy Committee.62 This was a reversion to the pre-2002 system and had the effect
of curbing the enthusiasm of Directors of Bureaus for announcing proposals which may
have been good ideas but which had not been properly costed or approved. When the
Chief Secretary for Administration, Rafael Hui Si-yan, completed his term of office in
June 2007, Tsang thanked him particularly for the way in which he had chaired the Policy
Committee and the Star Chamber, which vets spending, and said that those committees
were now known for their depth, intellectual rigour and remarkable efficiency.63

Tsang inherited the Principal Officials who had served under Tung but his public
statements suggested that he regarded experience within government as more important
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59
than entrepreneurial ability in appointments to top positions.64 He brought in Hui, a

former career civil servant, to replace himself as Chief Secretary and later strengthened
his own office by appointing another former senior civil servant, John Tsang Chun-wah,
as Director.65 When the term of the Principal Officials ended in June 2007, he made six
changes, resulting in a team which more resembled the pre-2002 situation when all but
two Principal Officials had been former civil servants. The POAS had been designed
to reduce the power of the senior civil service. In Tsangs new line-up, however, nine
of the twelve heads of policy bureaus and the new Financial Secretary, John Tsang
Chun-wah, had been former civil servants and nine of those ten had been members of
the elite administrative grade (see Table 3.1).66 The remaining appointments, with one
exception, had long experience of government through their service on major committees
or as Principal Officials who had been re-appointed. Even the exception, Tsang Tak-sing,
a former left-wing journalist with close connections to the DAB, who was appointed
Secretary for Home Affairs, had some experience of government through his membership
of the Central Policy Unit.
Table 3.1 Principal Officials in the Tsang Administration, July 2008
Position
Incumbent
Chief Executive
Donald Tsang Kam-yuen

Previous Experience
Former administrative officer.

Financial Secretary (19952001);
Chief Secretary (20012005);
Chief Executive (2005).
Secretaries of Departments
Chief Secretary for Henry Tang Ying-yen

Administration
Industrialist. Financial Secretary

(20032007).
Secretary for Justice Wong Yan Lung
Lawyer. Secretary for Justice (2005)
Financial Secretary John Tsang Chun-wah


Secretary for Commerce, Industry
and Technology (20032006);
Director, Chief Executives Office
(20062007).
Directors of Bureaus
Secretary for
Michael Suen Ming-yeung Former administrative officer.
Education
Secretary for Housing, Planning and

Lands (20022007).
Secretary for
Rita Lau
Commerce and
Economic
Development

Permanent Secretary, Commerce and
Economic Development
(Table 3.1 continued on p. 60)
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60
(Table 3.1 continued)

Secretary for
Stephen Lam Sui-lung
Constitutional
Affairs

Secretary for Constitutional Affairs
(2002)
Secretary for
York Chow
Food and Health
Surgeon. Secretary for Health,

Welfare and Food (2004)
Secretary for
Tsang Tak-sing
Home Affairs
Journalist. Member of the Central

Policy Unit.
Secretary for
Ambrose Lee Siu-kwong
Security
Secretary for the

Denise Yue Chung-yee
Civil Service
Secretary for
Matthew Cheung
Labour and Welfare Kin-chung
Former civil servant. Secretary for

Security (2003)
Administrative officer. Secretary for

the Civil Service (2006)
Secretary for
K.C. Chan
Financial Services
and the Treasury
Academic. Former Chairman,

Consumer Council.
Secretary for the

Environment
Secretary for
Development
Carrie Lam Cheng

Yuet-ngor
Edward Yau Tang-wah
Secretary for
Transport and
Housing
Eva Cheng
Sources: Government of the HKSAR, New team of Principal Officials appointed, Press Release,
23 June 2007 and www.gov.hk.
Note: In addition to those listed above, the Commissioner of Police, the Commissioner of the
ICAC, the Director of Audit, the Director of Immigration and the Commissioner of Customs
and Excise are Principal Officials. The Director of the Chief Executives Office is on the
same terms and conditions of service as a Director of a Bureau and is regarded as a Principal
Official (see note 15).

Under the new Chief Executive, the only major controversy over the accountability
of Principal Officials concerned events which had taken place mainly under the Tung
administration. In January 2007, the Council of the Hong Kong Institute of Education
(HKIEd), a tertiary institution which trains teachers, decided not to renew the term of its
President, Professor Paul Morris. Shortly afterwards, HKIEds Vice-President, Professor
Bernard Luk, wrote in an intranet message, subsequently widely reported in the local
media, that the reason for the decision not to re-appoint Professor Morris was that he had
refused to support a merger between HKIEd and the Chinese University of Hong Kong.
The Secretary for Education and Manpower (a Principal Official), Professor Arthur Li,
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61
had proposed the merger. It was also alleged that Professor Morris had been pressured
to dismiss staff critical of government policy.

Academic autonomy is enshrined in the Basic Law and there were many who
felt that, if proven, the actions of the Secretary constituted a violation of the right of
institutions to run their own affairs.67 The government then set up a Commission of
Inquiry to investigate three allegations relating to academic autonomy: that the Secretary
of Education and Manpower had threatened to cut student numbers at the HKIEd unless
the President agreed to a merger with the Chinese University of Hong Kong ; that senior
government officials had called on the President of HKIEd to dismiss academics who
wrote articles critical of government policy; and that the Secretary for Education and
Manpower had requested the Vice-President of HKIEd to issue a statement condemning
a teachers protest and the Hong Kong Professional Teachers Union which had assisted
them.68 The Commission was asked on the basis of the facts to ascertain whether there
had been any improper interference with academic freedom or institutional autonomy.
The Commission held hearings for 39 days with evidence presented formally by teams
of lawyers and with witnesses cross-examined by opposing counsel. The Commission
evidently felt that it had a difficult line to steer between government interference
with academic autonomy and the legitimate pursuit of public policy. On the issue of
threats to reduce the student numbers at the Institute, for example, the Commission
accepted that the Secretary for Education had probably said that he would rape the
HKIEd but, while it found the remark to be offensive, chose to see it in the context
of fulfilling the governments higher education policy objectives.69 The Commission
found that there was no concerted effort to force the HKIEd to reduce numbers if
it did not agree to the merger.70 On the issue of calling for the dismissal of academics
who criticised the government, however, the Commission found that the requests of the
Permanent Secretary for Education, Fanny Law Chiu-fun, to Professor Morris to curb
the criticisms of government by two academics constituted an improper interference
with their academic freedom.71 It also found that Mrs Law had requested a Professor
at the HKIEd to sack a staff member who was critical of government policies. On the
alleged request from the Secretary to the Vice-President to issue a statement condemning
the student protest and the Hong Kong Professional Teachers Union, the Commission
found that the allegation was not established.72

Tsangs response to the findings was remarkably similar to the manner in which
Tung had dealt with controversies affecting his Principal Officials. He welcomed the
findings of the Commission, noting that it had cleared the actions of the officials.73 This
was only partially true. The Commission did clear the Permanent Secretary on one
count of improper interference with academic freedom but found her guilty on another.
Fanny Law Chiu-fun resigned after the Commission of Inquiry reported although she
maintained that she had done nothing wrong. Tsang said that he had asked her to stay,
promising her full support.74 Professor Li was not re-appointed as a Principal Official but
it was thought that he had intended to step down for some time before the controversy
became a public issue. Even though it had appointed the Commission, the government
was not satisfied with the finding that officials who contacted academics to express
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62
critical opinions of their views were improperly interfering with academic freedom.
The Secretary for Education subsequently asked for a judicial review of the finding.75

The Chief Executive is ultimately responsible for the performance and behaviour
of the Principal Officials. Despite the attempts of Legislative Councillors to hold them
accountable, they have no constitutional authority to require Principal Officials to
resign. It is the responsibility of the Chief Executive alone to decide whether Principal
Officials have violated norms contained in the Code for Principal Officials, whether
they are culpable of negligence or, worse, of dereliction of duty, or whether their
competence in decision-making is in question. The Chief Executive and the Chinese
government decide whether they should continue to hold office. Tung Chee-hwa was
remarkably lenient in his treatment of his Principal Officials. Apart, possibly, for the
Secretary for Health, Welfare and Food, none, apparently, was required to resign. The
Secretary for Financial Services and the Treasury escaped with a public apology. The
Financial Secretary submitted his resignation but was told that his offence only merited
criticism. In the attempt to legislate under Article 23, where the government clearly
totally misread public opinion, Tung attempted to persuade the Secretary of Security
not to resign.76 In an analogous situation in 2007, when the former Permanent Secretary
of Education, by then a Principal Official as Commissioner of the ICAC, submitted her
resignation following criticism by a government-appointed commission, Tsang likewise
asked her to continue in office.77 In February 2008, he also requested an Executive
Councillor, David Li Kwok-po, who had been charged by the United States Securities
and Exchange Commission with insider trading and had paid over US$8 million to settle
the case, to reconsider his resignation.78 This implies either a very weak definition of
what constitutes accountability or that the concept of accountability itself had become
meaningless.
The Extension of the Principal Officials Accountability System

In October 2005, Tsang proposed to extend the Principal Officials Accountability
System by appointing a small number of Deputy Directors of Bureaus and political
assistants.79 He promised that the new appointments would not undermine the political
neutrality of the civil service. In July 2006, the Constitutional Affairs Bureau produced
a consultation document which outlined the role of the Deputy Directors and political
assistants in the context of the POAS. The reasons given for the proposal were that the
existing political layer of 14 people was too thin to engage in public communication
and liaison; that additional political appointments would be conducive to maintaining
the neutrality of the civil service; and that the new positions would serve as a career
path for political talents.80 The Chief Executives office and the policy bureaus, with the
exception of the Civil Service Bureau, were to have a Deputy Director and a political
assistant. The Deputy Directors were to report to the Directors of Bureaus and were to
be responsible for political input into policy objectives, coordination with other policy
bureaus, attending panel and committee meetings of the Legislative Council, responding
to motion debates in the main meetings of the Council, timetabling and securing the
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63
passage of bills, maintaining close contact with the media, political organisations and
business and community groups and deputising for the Directors in their absence.81
The political assistants, who were to report to the Deputy Directors, were to engage in
community liaison and prepare political statements and speeches for the Director and
the Deputy Director.82

After the public consultation period ended in November 2006, the Constitutional and
Mainland Affairs Bureau, as it had become, waited for nearly a year before it produced
a report which essentially endorsed the proposals in the consultation document.83 The
Bureau claimed that most submissions supported the extension of the system but it also
reported the views of some who were opposed to the new appointments. The Democratic
Party believed that the development of the political appointments system should come
after the introduction of universal suffrage.84 Anson Chan, the former Chief Secretary,
wanted a full review of the accountability system before making any changes. She also
thought that there was no clear division of functional responsibilities between senior
civil servants and Deputy Directors.85 Others argued that the process of recruiting Deputy
Directors and political assistants should be open and that the Legislative Council should
be able to question prospective appointees. This, the Bureau firmly rejected, arguing
that open recruitment was not suitable for political appointmentssince it is one of the
fundamental principles for political appointees to subscribe to the C(hief) E(xecutive)s
manifesto86 Instead, an Appointments Committee, comprising the Chief Executive,
the Director of the Chief Executives Office, Secretaries of Departments and Directors
of Bureaus, was to make the selection decision.

When the eclectic mix of former journalists, academics, DAB members, business
people and civil servants who made up the first batch of Deputy Directors and political
assistants was announced in May 2008, the government was again criticised for failing
to match the appointees expertise with the bureau in which they were to serve.87 Anson
Chan returned to the attack, arguing that the division of responsibility between the
political appointees and the senior civil servants was still not clear, that morale in the
civil service might be affected, that administrative officers would now find it difficult
to be directly appointed as Principal Officials, and that the impression had been given
that only pro-government people need apply.88 There were also complaints that five of
the eight Deputy Directors had foreign passports. The Chief Executive had said that
one of the qualities that the new appointees should possess was that they should be
patriotic.89 Under the Basic Law, Principal Officials are not permitted to have right
of abode elsewhere. A further cross-party criticism was that the government would not
disclose the exact salaries of the political appointees to legislators.90

The Chief Executive initially shrugged off the criticisms, saying that there was no
Basic Law requirement that Deputy Directors and political assistants should not hold
foreign passports and declined to provide information on individual salaries.91 There
was growing public feeling, however, that the political appointees should renounce their
foreign passports and there was widening criticism of the government for the way in
which it was handling the issue. The DAB also found itself in a particularly difficult
position. One of its leading figures, Gregory So Kam-leung, had been appointed as a
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64
Deputy Director but he held a foreign passport. Although a former Chairman of the DAB
and Executive Councillor, Tsang Yoksing, argued that the Deputy Directors should not
be required to give up their passports, other party officials were not convinced. They
feared that the issue would cost the party support in the September 2008 Legislative
Council elections.92 Eventually, the five appointees with foreign passports undertook to
relinquish them, apparently as a result of individual decisions rather than government
pressure.93

The furore over the appointment of Deputy Directors and political assistants
illustrates some of the governments problems with political accountability. The failure
to provide information to legislators on the recruitment process or to permit councillors
to interview prospective candidates created a situation in which the democratic parties
were likely to seize upon any mistakes that were made. For the governments part, as
it subsequently admitted, the in-house process by which candidates were recruited did
not sufficiently stress that foreign passports might be an issue.94 If the exercise had
been conducted more openly, it is highly probable that the passport issue would have
been raised at an early stage in the Legislative Council and that complaints about the
governments failure to disclose the salaries of appointees could have been resolved.
The governments reason for not consulting the legislature fully that candidates
had to subscribe to the Chief Executives election manifesto seems an inadequate
justification of its actions. This tendency to make a critical decision at the centre of
government without sufficient consultation and then to announce it as a fait accompli
has led to problems both of accountability and of policy implementation.

Political accountability requires that those who are being held accountable for their
actions should be subject to the oversight of an external body which has the ability to
impose sanctions upon them.95 The measures that have been introduced since 1997 have
been taken with the aim of strengthening the political executive but there has been very
little reciprocity in strengthening the mechanisms which hold the political executive
accountable. In that respect, the abolition of the Municipal Councils was regressive
because Urban and Regional Council members did play a role in ensuring that the heads
of the Urban Services and Regional Services Departments were held to account. In effect,
the government argued that efficiency was a more important value than accountability,
rejecting inter alia the view that elected Urban and Regional Councillors could provide
an avenue for political talent to advance to the Legislative Council and higher levels of
government. Yet the same argument that the new positions would be a breeding ground
for political talents was later used by the government to justify the appointment of
Deputy Directors and political assistants who have no electoral legitimacy.

In its most recent defence of the POAS, the government has put forward three
arguments. First, that
[A]lthough the Chief Executive is yet to be returned by universal suffrage
in reality he and his Principal Officials are already expected to perform
their duties and to respond to public demands in a manner which meets the
standards of Hong Kong as an open and transparent community.96
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65
In other words, although the political executive is not formally accountable, it acts as
though it is. Openness and transparency are important characteristics of good governance
but they are only tangentially related to political accountability. Principal Officials have
shown that they are prepared to be answerable for their actions which might be taken
as an indication of openness and transparency. But, if this answerability simply means
that they say what happened followed by an apology or an expression of regret, it is
unlikely to mollify Legislative Councillors, and others, who believe that accountability
means accepting responsibility for mistakes and who expect Principal Officials to resign
for poor decisions, inadequate performance or improper behaviour. When it introduced
the POAS, the government argued that it would make it easier for the Chief Executive
to remove Principal Officials if they were not tenured civil servants which would then
serve to make the executive more accountable. In practice, even before 2002, the Chief
Executive was still at liberty to transfer Principal Officials within the government. Under
the POAS, the reluctance to require Principal Officials to resign when their actions are
in question means that their status, in accountability terms, is not significantly different
from when the Principal Officials were all civil servants. Thus, despite the governments
best efforts to put a gloss on the new system,97 the accountability of the executive is
no further advanced than it was under the colonial system or in the immediate posthandover period.

The second justification for the POAS was that it opened up positions in the political
executive to individuals inside and outside the civil service, thereby enabling Hong
Kong to draw from a wider pool of political talent.98 This, too, is only tenuously related
to political accountability. Tung Chee-hwa originally presented the system as more
responsive to community needs because the Principal Officials were not civil servants,
could be drawn from a wider spectrum of the community and in that sense might be more
broadly representative, and would have to pay heed to public opinion if they wished to
keep their positions.99 Civil servants, by contrast, were permanent and pensionable and
could presumably more readily ignore public demands. This logic only holds if the Chief
Executive is willing to act against Principal Officials who are responsible for policy
failures. And, as we have seen, that has not been the case under either Tung or Tsangs
administration. Under Tsang, moreover, a majority of the Principal Officials in charge
of policy bureaus are former administrative officers who are now directing other current
members of the same elite grade (see Table 3.1). The appointees to Deputy Director and
political assistants in May 2008 were, however, drawn from a larger pool.

A third argument used to justify the system was that it strengthened the foundation
of a professional and politically neutral civil service.100 This implies a separation of roles
between Principal Officials and senior civil servants with civil servants accountable to
Principal Officials for their actions. The government has argued that this clarification of
roles will allow civil servants to devote themselves to the implementation of policy. But
it is clear from the reasons given for the appointment of Deputy Directors and political
assistants that civil servants do much of the political work for Principal Officials, as
they did in the pre-2002 system. In addition, the argument tends to conflate political
and bureaucratic accountability. Civil servants are accountable in various ways for their
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66
actions. But if Principal Officials are not themselves politically accountable, as legislators
have repeatedly pointed out, their authority to demand accountability of civil servants
is considerably diminished.

The POAS has had far-reaching implications for the location of power within the
government and for the structure of the civil service itself. It has also had a significant
impact on the way that policy is formulated and implemented. But on the grounds which
it was originally sold to the Legislative Council and the public that it would make
Principal Officials more politically accountable for their work it must be judged on
the evidence so far to have been a singular failure. It has not solved the problem of the
disjunction between a Legislative Council, which is looking to assert its constitutional
role of holding the executive accountable but which it is unable to do so fully under
the present arrangements, and a political executive whose accountability is principally
to the Chief Executive, and through him, to the Chinese government.
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Part II
The Public Sector and Its Problems
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The Civil Service:

Structure and Functions
he Basic Law provides only a general framework for the organisation of the Hong
Kong government and has even less to say about the public sector beyond the civil
service. Article 48 does specify that the Chief Executive shall lead the government and
may appoint judges and holders of public office and Article 62 empowers the government
to conduct administrative affairs. Some departments, such as the Police, Immigration,
and Customs and Excise, are mentioned in the Basic Law and it is stipulated that there
shall be a Commission against Corruption and an Audit Commission, but there is no
description of the organisation or powers of any of these bodies. Instead, the Chief
Executive may decide, in consultation with the Directors of Bureaus and Heads of
Departments, on the way in which their organisations should be structured which may
then be formalised in ordinances or in executive orders, regulations and circulars. If
new positions are required, or unnecessary ones are deleted, government proposals
will be discussed in the Legislative Council. Most bureaus and departments have been
organisationally stable for many years1 but refinements are often made as the government
takes on new responsibilities, merges bureaus and departments, or ceases to provide
services that are no longer necessary. There are also pressures for re-organisation from
elected representatives, political parties and interest groups, who reflect changing
political, economic and social conditions, and from the governments own constant
search for improvements in efficiency.

The underlying principles on which government should be organised have been
surprisingly widely shared by political leaders and the public both before and after 1997.
The following propositions attract broad support:
that government should be centralised and hierarchically organised;
that the civil service should be run by a generalist administrative elite, selected
from the most able candidates available, and that it should be politically neutral;2
that government should be small government and that it should perform only
limited functions3 with a focus on fiscal frugality, efficiency and value for
money4
that the recruitment and promotion of civil servants should be made on grounds of
merit and that most civil servants should enjoy tenured positions for the duration
of their working lives;5 and
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70
that the civil service should be as free of corruption as possible and subject to the
rule of law.6

These principles are not as easily achieved as might be supposed. There has
sometimes been a sizeable difference between the way in which the government
is expected to function and the way in which it actually operates. The Hong Kong
government has not always been small or limited in function or corruption-free. The
tenure of civil servants and the interpretation of political neutrality have been subject
to challenge. Changing economic conditions and the political context in which the
government finds itself have also been important factors influencing the structure of
government. In this chapter, we will examine the formal structure and functions of the
Hong Kong government the way it is supposed to work and assess the extent to
which practice has deviated from the first three principles. In Chapter 5, we consider
the remaining principles and the governments record in meeting those criteria through
its personnel policies.
The Structure of Government

The Colonial System
The formal structure of the Hong Kong government has traditionally been highly
centralised. Power has always been concentrated in the hands of a relatively few senior
figures, partly because of the political circumstances in which the rulers of Hong Kong
found themselves but also because decentralised or devolved government in a small
territory has only occasionally been necessary. The civil administration of Hong Kong
was promulgated by despatch from the Colonial Office in June 1843.7 In September
1843, the offices of Governor and Colonial Secretary were established together with
the Judiciary, Finance, Harbour, Public Works and Lands Departments.8 A Police Force
and an Audit Commission were created in 1844.9 For the first twenty years or so, Hong
Kongs administration was chaotic and corrupt. In the next twenty years, civil service
reforms produced a strongly centralised system of hierarchically organised departments.
The first cadets (later called administrative officers) were appointed in 1862 and soon
assumed the most senior positions within the civil service.10 Corruption in the police
was addressed later in the 1860s by appointing a cadet as head of the Force.11 And, by
the beginning of the 1880s, public finances were managed in a more systematic way.

At the apex of the system was the Governor, but he was often dependent on the
advice of his Colonial Secretary who was the person actually in charge of the civil
service. Power was concentrated in the Colonial Secretariat which contained within it
the cadets who were responsible for the central functions of finance, policy-making and
the regulation of the civil service itself. Responsibility for relations with the public lay
with the Secretariat for Chinese Affairs, a separate body, which took on the functions
of liaison and consultation with the representatives of elite Chinese opinion.12 When the
New Territories was acquired in 1899, there was a greater devolution of autonomous
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The Civil Service: Structure and Functions
71
decision-making to the level of the district officer who exercised his authority with the
advice of local elites.13 On Hong Kong island and in Kowloon, government remained
highly centralised and there was very little devolution of power or responsibilities.

Over time, the government gradually created a number of departments which at first
were concerned with law and order but latterly expanded into social services, notably
the provision of public housing in the 1950s. While the Colonial Secretariat was able to
make and implement decisions it was fulfilling a largely regulatory function in a small
government in which changes were almost always incremental. After the Second World
War, there were many additional pressures. Senior officers were over-loaded and the
Secretariat was becoming clogged and unable to respond rapidly enough to the problems
with which it was faced.14

There were various proposals for reform but it was not until 1972 that the Governor
decided that there was a need for a re-vamped administrative structure to deliver
social services more efficiently. The McKinsey consultants were employed to make
recommendations. They found that departments could not take many decisions and
that, as a consequence, large numbers of decisions have to be taken centrally...15 They
devised a new structure in which the policy functions which had been bundled together
in the Colonial Secretariat were hived off to six policy branches and two resource
branches (finance and the civil service), each of which was headed by a Secretary.16
The policy branches formulated policy which the departments under their control were
then expected to implement. As time went on, the problem of overlapping and unclear
responsibilities led to the creation of more branches and more departments.

Power remained highly centralised, however. The Policy Secretaries were mostly
members of the administrative grade, which provided for cohesion and unity of direction,
and they reported to the Colonial Secretary (later called the Chief Secretary). In addition,
control over expenditure remained firmly in the hands of the Financial Secretary. The
newly created Civil Service Branch took over responsibility for the management of
the entire civil service, a reform that was intended to provide for better co-ordination
with the departments and the Public Service Commission than its predecessor, the
Establishment Branch.17 The McKinsey structure, with some modifications arising from
the introduction of the Principal Officials Accountability System (POAS), has remained
the organisational template for the civil service since 1973.
The Government Secretariat after 1997

Figure 4.1 shows in diagram form the way in which the Government Secretariat is
expected to work. The Chief Executive replaces the Governor at the apex of the structure.
His powers are derived from The Public Service (Administration) Order and the Public
Service (Disciplinary) Regulations which were passed in 1997 and give the Chief
Executive similar authority over the civil service to that exercised by the Governor.18
Beneath the Chief Executive, the Chief Secretary for Administration is the head of the
civil service and the direct lineal successor of the Colonial Secretary. Slightly beneath
him in the hierarchy are the Financial Secretary and the Secretary for Justice who
ch.04(p.69-93).indd 71
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ch.04(p.69-93).indd 72
Civil
Service
Bureau
Constitutional
and
Mainland
Affairs Bureau
Education
Bureau
SECRETARY FOR JUSTICE
Environment
Bureau
Home
Affairs
Bureau
Labour
and
Welfare
Bureau
Security
Bureau
Transport
and
Housing
Bureau
Figure 4.1 The Government Secretariat, 2008
Food and
Health
Bureau
CHIEF SECRETARY FOR

ADMINISTRATION
CHIEF EXECUTIVE
Commerce
and
Economic
Development
Bureau
Development
Bureau
Financial
Services
and the
Treasury
Bureau
FINANCIAL SECRETARY
72
11/4/09 4:09:38 PM
73
replaces the colonial Attorney-General. The Chief Secretary and the Financial Secretary
are expected to vet policy proposals and related increases in public expenditure coming
from the bureaus (as the branches were called after the handover) and to filter out those
which the government cannot afford or does not consider a priority. When the POAS
came into effect, this critical function was devalued and the Chief Secretary and the
Financial Secretary were in effect downgraded to the level of Policy Secretaries.19 One
of Donald Tsangs first acts when he succeeded Tung Chee-hwa as Chief Executive in
2005 was to re-assert the pre-eminent positions of the Chief Secretary and the Financial
Secretary.20

In 2002, the Hong Kong civil service was divided into sixteen bureaus which
made policy and nearly 60 departments and agencies which were responsible for
administering programmes and dealing with the public. The policy bureaus continued
to be largely staffed by the administrative grade whose members were also the heads
of some 26 operational departments.21 With the introduction of the POAS in July
2002, the Chief Executive decided to reduce the number of bureaus from sixteen to
eleven. As a consequence, there were mergers and re-organisations of bureaus and
reviews of the implication of the devolution of power to Directors of Bureaus.22 The
Directors were given a greater degree of financial autonomy through the introduction
of an envelop approach which was to give them clear parameters on the operating
resources available to them which they were then required to allocate to the
departments under their control.23 There was also considerable re-organisation of the
departments.24 In June 2007, Tsang undertook further major organisational changes.
The number of policy bureaus was increased to twelve and there were reviews of the
structure of each of the bureaus.25
Departments
Departments and agencies come below the bureaus in the hierarchy and are subject to
their direction (see Table 4.1). Formally, a department is a government body which
exercises authority to implement the laws and regulations which fall under its jurisdiction.
However, the Hong Kong government also considers some organisations, which are not,
strictly speaking, departments, such as the University Grants Committee, to fall under
the jurisdiction of bureaus. The confusion over the term reflects the centralising tendency
of the government. The bureaus are considered to have oversight over different types
of public sector organisations that have responsibilities within the area of the bureaus
remit. These may include commissions, advisory committees and statutory bodies as well
as departments. What they are actually called and what distinctive legal characteristics
they may possess is less important, from the standpoint of the government, than that
they should support and implement centrally-determined objectives.26

Apart from some social services departments, the proportional size of departments
within the civil service as a whole has remained relatively unchanged since colonial days.
Table 4.2 shows the strength of the twelve largest departments in 2008. Compared with
1988, as a proportion of the civil service, the disciplined services (Police, Fire Services,
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74

Table 4.1 Bureaus and Departments in the Hong Kong Government, 2008
Office of the Secretaries
Departments and Agencies
Financial Secretary

Economic Analysis and Business

Facilitation Unit
Chief Secretary for Administration
Secretary for Justice

Bureaus
Administration Wing; Efficiency Unit
Department of Justice
Civil Service Bureau,

Commerce and Economic
Secretariat, Advisory Bodies on Civil Service

and Judicial Salaries and Conditions of Service
Constitutional and Mainland

Affairs Bureau
Registration and Electoral Office; Office of the

HKSAR Government in Beijing; Hong Kong
Economic and Trade Offices (Mainland)
Development Bureau

Development Bureau
Education Bureau
Environment Bureau
Financial Services and the

Treasury Bureau

Food and Health Bureau
Hong Kong Observatory; Innovation and

Technology Commission; Intellectual Property
Department; Invest Hong Kong; Office of
the Chief Information Officer; Office of the
Telecommunications Authority; Post Office;
Radio Television Hong Kong; Television
and Licensing Authority; Trade and Industry
Department; Hong Kong Economic and Trade
Offices (Overseas)
Architectural Services Department;

Buildings Department; Civil Engineering and
Development Department; Drainage Services
Department; Electrical and Mechanical
Services Department; Lands Department;
Lands Registry; Planning Department; Water
Supplies Department
Secretariat, University Grants Committee;
Student Financial Assistance Agency
Environmental Protection Department
Census and Statistics Department; Company

Registry; Government Logistics Department;
Government Property Agency; Inland Revenue
Department; Office of the Commissioner of
Insurance; Official Receivers Office; Rating
and Valuation Department; Treasury
Agricultural, Fisheries and Conservation
Department; Department of Health; Food
and Environmental Hygiene Department;
Government Laboratory
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75

Bureaus
Labour and Welfare Bureau

Labour Department; Social Welfare

Department
Home Affairs Bureau

Security Bureau
Transport and Housing Bureau
Home Affairs Department; Information

Services Department; Legal Aid Department;
Leisure and Cultural Services Department
Auxiliary Medical Service; Civil Aid Service;

Correctional Services Department; Customs
and Excise Department; Fire Services
Department; Government Flying Service; Hong
Kong Police Force; Immigration Department
Civil Aviation Department; Highways
Department; Housing Department; Marine
Department; Transport Department
Source: Adapted from www.gov.hk/en/about/govdirectory/govchart/index.htm (accessed 12 July

2008).
Table 4.2 Strength of the Twelve Largest Departments, 2008

Department
Hong Kong Police Force

Food and Environmental Hygiene
Fire Services
Housing
Leisure and Cultural Services
Correctional Services
Immigration
Customs and Excise
Education Bureau
Post Office
Social Welfare
Health
Others
Total
Strength
31,882
9,822
9,167
7,385
7,012
6,426
6,357
5,391
5,343
5,236
4,739
4,669
49,948
153,477
2008 (%)
20.8
6.4
6
4.8
4.6
4.2
4.1
3.6
3.5
3.1
3.4
3.0
32.5
100
1988 (%)
17.6
4
6.5
3.3
2.8
1.9
3.5
2.5
1.9
14.5
25.4
100
Source: Calculated from Civil Service Branch, Civil Service Personnel Statistics 1988 (Hong
Kong: Government Printer, 1988), 1014; www.csb.gov.hk (accessed 9 July 2008).
Note: Civil servants in the Leisure and Cultural Services Department and the Food and Hygiene
Department were drawn largely from the former Urban Services and Regional Services
Departments which together constituted 13.2% of the civil service in 1988.
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76
Correctional Services, Immigration and Customs) have increased in percentage terms.

Customs was not represented in the twelve largest departments in 1988 but much greater
cross-border traffic since 1997 has required the recruitment of additional staff. There have
also been significant increases in numbers in the Fire Services Department. Health and
Housing have declined in both absolute and percentage terms, reflecting the creation of
the Hospital Authority, which employed many civil servants from the former Medical
and Health Department, and the privatisation of the management of some housing estates.
The Social Welfare Department has risen substantially in percentage terms although
the major increase in absolute numbers occurred before 1997. In general, the figures
suggest that, while trying to downsize the civil service, the post-1997 government has
still tended to support some increases in the disciplined services establishment but has
sought to deliver social services by other means, if possible, and to reduce the size of
those departments accordingly.

Although bureaus are charged with policy formulation, they are often unable to
proceed with proposals without the advice and ideas of senior departmental officers.
There is, consequently, continual interaction between the bureau and the departments.
It might be argued that this is a duplication of resources that could possibly contribute
to slower decision-making. The merger of the Education Bureau with the Education
Department in 2003, for example, was predicated on the belief that the bureau and
department had overlapping responsibilities.27 Proponents of separating bureaus and
departments, which include many administrative officers, argue to the contrary that the
exchange of ideas and the links with other bureaus and decision-making bodies improves
policy co-ordination and the quality of policy-making. This structure sometimes also
leads to tension between the bureaus and departments. Departmental officers have
complained that the administrative officers have too little experience to make sensible
proposals in their areas. They have also occasionally been incensed when administrative
officers have been parachuted into senior positions in departments, adversely affecting
their promotion opportunities.28
Hierarchy: Grades and Ranks

The civil service is divided into about 380 grades which are then further sub-divided into
approximately 1100 ranks.29 New recruits join a grade and are usually assigned to the
lowest rank in the grade. In the Police Force, for example, depending on qualifications,
new recruits may join at the rank of inspector or at the rank of constable and, subject to
performance, will move up the ranks to more senior positions. A host of other grades
work in the Police Force. These include both police departmental grades, such as
translators, interviewers and traffic wardens, and civilian grades such as administrative
officers, executive officers, typists, treasury accountants, clinical psychologists and many
others.30 The Police Force is one of eight disciplined services falling under the Security
Bureau. In the disciplined services, hierarchy is particularly important in issuing orders
and ensuring compliance and, as a result, there tends to be more ranks to supervise
and monitor the performance of junior officers. In the Police Force, for example,
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77
there are fifteen ranks ranging from the Commissioner of Police at the head of the
organisation to constable at the bottom (see Table 4.3). In other grades, collegiality and
the exchange of ideas may be more important qualities than control within a hierarchy.
In the administrative grade, for example, there are seven ranks and, in the Department
of Justice, only three. As Table 4.3 shows, the function performed by the grade changes
the shape of the hierarchy. In the Police Force, the organisational structure is a sharp
pyramid with most police officers in the junior ranks. This structure helps to promote
rapid communication of orders down the line of command. In the administrative grade,
there is a more even spread of staff within the ranks, reflecting greater collegiality and
potential for flexibility in postings across the civil service.
Table 4.3 Ranks and Establishment in the Police Force and
in the Administrative Grade, 2008
Police Force
Establishment
(ranks)
Administrative Grade Establishment

(ranks)
Deputy Commissioner of Police
Staff Grade A (D6)
Commissioner of Police
1
2
Senior Assistant Commissioner of Police 5

Assistant Commissioner of Police
Chief Superintendent
14
45
Senior Superintendent
87

Superintendent
Chief Inspector
Probationary Inspector/ Inspector/

Senior Inspector
Station Sergeant
Sergeant
Constable/Senior Constable
Total
273
Staff Grade A1 (D8)
17
Staff Grade B1 (D4)
27
Staff Grade B (D3)
14
47
Staff Grade C (D2)
179
Administrative Officer
141
Senior Administrative
Officer
524
165
1652
1291
4660
19096
27649
590
Sources: www.legco.gov.hk/yr07-08english/fc/f/w-q/sb-e.pdf (accessed July 7, 2008). There was

an additional permanent establishment of 4833 civilian posts in the Police Force in 2008; www.
csb.gov.hk/English/grade/ao/751.htm (accessed July 6, 2008).

Most grades are departmental grades. Civil servants in those grades will spend
their working careers within the department and are not usually transferred to other
departments although they may be seconded to deal with particular situations. As
they acquire experience, they will normally move up the hierarchy taking on more
responsible tasks. The efficient working of the administrative system depends on the
knowledge acquired by these civil servants in dealing with the same kinds of problems,
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78
delivering services or administering laws over long periods of time. The hierarchical
structure of the civil service promotes efficiency, ensuring that orders issued at the top
are carried out by more junior staff. But there are disadvantages. Most departments do
not usually encourage much upward communication of information from lower levels
of the organisation with the consequence that problems may exist for some time before
senior officers can rectify them. Further, if senior civil servants are content with the
status quo, departments can become moribund and unable to deal with new problems
or to seize new opportunities.

For two grades, transfers between bureaus and departments are a regular part
of their working life. Administrative and executive grade officers are usually posted
to new positions every two to three years. The formal rationale for this practice is to
provide experience in different aspects of administration across the civil service. But
the practice is also important in retaining a central presence in the departments and in
attempting to ensure that those officers are not captured by the departments to the extent
that they resist central instructions. Administrative officers are the conduits through
which information on policy passes from the centre to the departments and back from
the departments, through the administrative officers, to the centre. Executive officers,
similarly, perform important tasks in ensuring that the personnel practices devised by
the Civil Service Bureau and the laws, with which the departments must comply, such
as the Protection of Data Ordinance, are observed in the departments.31 Without the
role played by these generalist grades, the system would not work smoothly. A topdown, centralised, hierarchical system, in an organisation as large as the Hong Kong
civil service, needs adequate channels of communication if it is to avoid potentially
conflicting policy objectives and implementation and the possibility that administrative
practices might develop that are contrary to the intentions of the centre.
The Administrative Grade

The administrative grade plays a key role in another respect. Its members form a
significant proportion, some 23%, of the 1205 civil servants who in 2008 made up
the directorate level of the civil service.32 The directorate comprises the most senior
officers in the civil service and is responsible for the formulation and implementation
of policy and for performing high-level personnel and operational functions. A majority
of the directorate are senior departmental officers who have risen to the top positions
through the ranks. Administrative officers, however, are usually principally involved
with policy formulation and until 2002 often made the final decision on whether policy
should or should not be adopted. This political role has resulted in conflict with elected
politicians in the Legislative Council and some difficulties with political appointees to
the positions of Directors of Bureaus, as Policy Secretaries became known after the
POAS was introduced. Since Tsang became Chief Executive, however, there has been
some restoration of the power and influence of the grade.

For much of the colonial period, the administrative grade was an entirely male,
expatriate elite usually recruited from among graduates with good degrees from British
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79
universities.33 No Chinese were recruited to the grade until 1948 and localization was
very slow; even by 1968, there were still only fourteen Chinese administrative officers.34
Women were not admitted until the early 1960s and only then after a fierce debate among
the senior officials. By 1997, the grade had expanded to around 500 officers of whom
nearly 50% were female.35 By that time, local officers made up well over 90% of the
grade. Expatriate recruitment had ceased and most of the remaining expatriates were
close to retirement.36 New recruits are expected to be intelligent, innovative, concerned
with the welfare of the community, and fluent in English and Cantonese and, increasingly,
in Putonghua. Salaries are generous and promotion is usually quite rapid.

Despite the very considerable changes that had taken place in its composition
by 1997, the public esteem in which the administrative grade was held remained
remarkably unchanged. Administrative officers continued to be respected for their high
levels of integrity before 1997, none was convicted of a corrupt offence37 for
their meritocratic selection in the face of often fierce competition for admission to
the grade and for their ability to resolve problems. When decisions were made by this
closed elite and implemented authoritatively by the departments, the grade had great
power and influence within the structure of government. By the 1990s, however, the
political environment had begun to change. The administrative grade slowly retreated
from its position of unquestioned pre-eminence and morale within the grade gradually
declined.38 The directly elected members of the Legislative Council were more critical
of government policies than their appointed predecessors; the Chinese government
was suspicious of an administrative elite which was seen to be working for the British
government against its interests; some high profile local Chinese officers, who had
been identified with the policies of the last Governor, Chris Patten, left the service for
statutory bodies or the private sector; and the promotion prospects of expatriates were
adversely affected by the Basic Law.39 By 1997, power still remained in the hands of
senior civil servants, many of whom were members of the administrative grade, and the
public esteem in which they were held had not seemingly diminished. Their dominance
was no longer unquestioned; their political masters sought to exert greater control over
how the civil service worked and how policies were formulated and implemented.
The Administrative Grade after 1997

After the handover, the new regime had three choices on how it would exercise power.
The first was to seek democratic legitimation and to move rapidly towards the universal
suffrage promised in the Basic Law, a course of action to which the Tung administration
and the Chinese government were adamantly opposed. A second option was continued
rule by the senior civil service. Before the handover, the Chinese government had given
assurances that the civil service would function much as it had done in the past40 and
the Basic Law provided that conditions of service would remain unchanged. In 1997,
the Chief Secretary, the Financial Secretary and the serving Policy Secretaries, who
were administrative grade officers, were all re-appointed as Principal Officials; only
the newly created position of Secretary for Justice went to an outsider. At that time,
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80
Anson Chan On-sang, the Chief Secretary and an administrative officer, was probably a
more popular choice for Chief Executive than the person whom the Chinese government
selected, Tung Chee-hwa.

The third option, which gradually emerged as Tung and the Chinese governments
preferred choice, was to exert more political control over the civil service to bring it in
line with new policy objectives and Hong Kongs changed status. Despite the assurances
which the Chinese government gave about the continuance of the system of governance
after 1997, there was, from the outset, an undercurrent of opposition to the continuing
pre-eminence and power of senior members of the administrative grade. Members of
the Executive Council, Tung Chee-hwas own advisors, pro-China united front groups
and some businessmen were amongst those who saw the civil service, at best, as an
obstruction to the achievement of policy goals and, at worst, as a relic of colonial rule
and privilege.

The Chinese government appears to have been equally suspicious of the
administrative grade. Anson Chan, for example, was reportedly personally warned by
the Chinese leadership to support the Chief Executive.41 In 2002, Qian Qichen, the VicePremier, told a newspaper reporter that the Chinese government questioned the loyalty
of senior civil servants who had been appointed by the colonial administration.42 At the
fifth anniversary of the handover, the Chinese President, Jiang Zemin, in a comment
which was also taken to be an attack on the commitment of senior government officials
to the policies of the Chief Executive, said:
Civil servants at all levels, especially ranking officials, should conscientiously
submit to and support the leadership of the chief executive, work with one
heart and strive to achieve fresh success.43
All this came with a barrage of hostile criticism for the policy failures of the post1997 period. Rather than the rational, far-sighted, competent officials, who were held
in high public esteem at the handover, civil servants were now portrayed as overpaid,
underachieving spendthrifts who, rather than the Chief Executive, were responsible,
through their inefficiency, for the decline of Hong Kong. Indeed, seemingly so intense
was the feeling against civil servants that the Chief Executive himself felt compelled
to note remarkably, if self-evidently that civil servants were not responsible for
Hong Kongs growing fiscal deficit.44

Initially, the centralising measures taken by the post-handover administration the
abolition of the Municipal Councils and some civil service personnel reforms did
not affect the continuing dominance of the administrative grade. When the POAS was
implemented in 2002, however, there were significant implications for these officials.
The scheme created political support for the Chief Executive at the Director of Bureau
level because the new appointees were no longer civil servants and were dependent
on him for their continuation in office. But it did not entirely resolve the problem of
maintaining or enhancing a centralised administration because in the process bureaus
became more autonomous and co-ordination between them was unintentionally reduced.
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81
Some of the glue which had held the system together and which had enabled a centralised
governmental structure to work effectively had been removed.

The POAS required those administrative officers at the most senior levels to decide
whether their fortunes lay with the regime, whether they preferred instead to play a
diminished role within the civil service, or whether they would resign or take early
retirement. If they accepted an offer as a Director of Bureau, they would become political
appointees on contract and would have to relinquish permanent and pensionable terms of
service. They would owe their position directly to the Chief Executive. They would be
expected to be transformational leaders. They would be thrust into the political maelstrom
and could be dismissed if they failed to deliver on policy. As Tung discovered when
he canvassed senior civil servants to take up positions as Director of Bureaus, this was
not to everyones liking.

A second possibility was to remain a civil servant under the new political
superstructure, and perhaps under the control of the new Directors of Bureaus from
outside the service, who did not always share the values of the administrative grade.
There would be no prospects, as there had been in the past, of reaching a position where
critical policy decisions were largely within their control; the politically appointed
Directors were expected to make those decisions. The administrative officers would
simply execute political decisions made elsewhere, a significant diminution of their
role. For those administrative officers slightly below the highest level, their promotion
prospects were affected by cutbacks in the directorate level establishment of positions
held by administrative officers and by further ventilation of the long-standing complaint
of senior specialist departmental officers that they should not be expected to serve under
generalist administrators.45

Morale in the administrative grade was also detrimentally affected by what appeared
to be a re-interpretation of the traditional concept of political neutrality. Political
neutrality, drawing on British practice, had been taken to mean the right of senior civil
servants to speak truth to power, to advise the political decision-makers on appropriate
courses of action and then to implement to the best of their ability whatever was decided.
In her valedictory address in 2001, the outgoing Chief Secretary, Anson Chan, defended
this traditional conception:
[Civil servants] know they can tender advice without fear or favour, safe
in the knowledge that even the most unwelcome advice would not lead to
blighted career prospects or unpleasant postings out of earshot of those who
may not like what you have to say I believe passionately in the notion of
a politically neutral civil service46
Increasingly, however, political neutrality appeared to be supplanted by the expectation

that civil servants should, above all, be loyal to the government and unquestioningly
obedient to the dictates of political appointees, a situation which might apply in the fused
political/administrative system of China but which did not sit well with Hong Kong
civil servants. A Chinese State Councillor, for example, implied that political neutrality
was an outdated British idea in the context of another Councillors remark that civil
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82
servants should be patriotic and uphold the Basic Law.47 Although the Secretary for the
Civil Service re-affirmed on at least three occasions that the government still regarded
political neutrality as central to the role that the civil service played, in practice it seemed
that the politicians regarded loyalty and obedience more highly than honesty.48

By the time that Tung Chee-hwa relinquished office, the problems of role definition
and morale in the senior levels of the civil service were having an impact on policy
formulation. The government found it difficult to implement its policies and co-ordination
between bureaus appeared to be influenced by the perception that administrative officers
had a less positive and self-confident role to play and were to be regarded more as the
executors of policy rather than as its initiators. Directors of Bureaus were following
their own paths and canvassing their proposals directly with the Chief Executive. Many
of these new proposals found their way only slowly, if at all, into the public domain
because after the July 2003 demonstrations, the capacity of the government to introduce
new policies was very much reduced by the level of opposition in civil society.

When Tsang, himself a former administrative officer, succeeded Tung Chee-hwa
in 2005, he went some way to restoring the lost prestige and influence of the grade.
The Chief Secretary for Administration and the Financial Secretary, both former
administrative officers, were immediately given back their former roles as gatekeepers
and the structure of government was adapted accordingly. Following his first policy
address in October 2005, the government sought to strengthen the bureaus and the
directorate. Although there was formally a freeze on recruitment, the government
proposed the creation of thirteen new directorate posts, ten of whom would be
administrative officers.49 Promotions prospects improved and the grade benefited from
an increased establishment which brought its numbers from 588 in 2005 (the same
establishment as in 2002) to 613 in 2008.50 There were further changes in May 2007
when the Constitutional Affairs Bureau undertook a detailed review of the organisational
structure of the policy bureaus and in July 2007 when former administrative officers
were appointed as Directors of Bureaus. By July 2008, nine of the twelve Directors of
Bureaus were former administrative officers (see Table 3.1). Eighteen of the nineteen
Permanent Secretaries and 29 of the Heads of Departments (compared with 26 in 2002)
were administrative officers.51 The Tsang administration also stressed the importance of
the political neutrality of civil servants when it proposed to make political appointments
at the Deputy Director and Political Assistant levels, arguing that this would relieve civil
servants of the need to do political work.52 It was not clear, however, whether the
emphasis on political neutrality reflected a return to speaking truth to power or whether
it was still being defined principally in terms of loyalty and obedience. Nonetheless, by
2008, the civil service rather more resembled its colonial predecessor than the somewhat
confused structure that had resulted from the POAS.
Problems with the Post-handover Structure of Government

Aside from the problems of role definition and morale in the administrative grade,
there were three other major structural problems that faced the government after 2002:
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the system was over-centralised; lines of authority were not clear; and bureaus and
departments were too autonomous.

In any public administration system, it is difficult to find the appropriate balance
between the degree of centralisation and control and the ability to deal effectively and
efficiently with the many issues that require decisions. One of the aims of the POAS was
to centralise the government to an even greater extent than under colonialism. But by
reducing the number of Director of Bureaus, the Chief Executive created a situation in
which they were almost bound to be over-loaded and where matters requiring decision
might in practice either still revert to senior civil servants or would not be dealt with
expeditiously. One of the defences offered by the Secretary for Financial Services and
the Treasury in the Penny Stocks incident, for example, was that the papers and files
in my office were piling up like a mountain and I could not possibly have read every
document.53 Each of the Directors of Bureaus conducted a review to determine whether
the sixteen Permanent Secretaries appointed for the eleven bureaus were all necessary and
concluded, presumably in view of the workload, that they should remain in post.54

The organisational changes resulting from the POAS also caused some confusion
about the lines of command in the newly created bureaus and merged departments.
There were problems over the relationship between the Director of the Bureau and
the Permanent Secretary and some uncertainty over who was responsible for what.
In the Penny Stocks incident, for example, it was not immediately clear whether the
Financial Secretary had some responsibility for the affair or whether the Secretary
for Financial Services and the Treasury was wholly accountable. The deletion of
senior posts in the directorate affected lines of command and the allocation of
responsibilities. The initial re-organisation resulted in the deletion of eighteen
directorate level posts and 146 non-directorate posts and total saving on staff salaries
of over $100 million and there were further cuts in the years after the POAS was
introduced.55 At times, the logic of re-organisation seemed to be subsidiary to the aim
of cutting civil service costs. In addition, the re-organisation appeared to enhance
the autonomy of the departments but without imposing a uniform structure upon
them. Subject to Legislative Council approval, Directors of Bureau appeared to be
able to re-organise their bureaus and departments in any way that they thought was
appropriate without taking into account inter-departmental co-ordination. This raised
the issue of whether establishing different bureau and departmental structures within
the government might mean that initiatives which required the joint action of two or
more departments might not receive sufficient attention.

By the end of the Tung administration in March 2005, the Hong Kong government
was still carrying out routine functions efficiently. But it had lost much of its capacity to
deal with new problems. This was not simply a result of confusion within government
about the way in which the POAS should work; the opposition of civil society
organisations to important government policies was perhaps a more important factor.
But poor policy formulation, co-ordination and implementation did relate in part to
the difficulties in which the government found itself. Tung tried to achieve greater
centralisation and political control over the civil service while at the same time changing
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its structure at the top and reducing its size. The end product was a government that
lacked co-ordination and direction and over-loaded the Chief Executive.

Under Tsang, although the POAS was retained and to some extent expanded with
the appointment of Deputy Directors and Political Assistants, former administrative
officers were in charge of many bureaus and administrative officers held many of the
senior positions in the civil service itself. Tsang at first worked with the same eleven
policy bureaus that had been created under Tung but, in July 2007, he increased the
number of bureaus to twelve. The government also used the argument that Directors of
Bureaus were over-loaded to canvass for the political appointment of Deputy Directors
and Political Assistants. In a report published in October 2007, the government gave as
its first reason for making more political appointments that:
Principal Officials need additional support to meet the demand of peoplebased government. The existing political layer is too thin to deal with the
demands of governance and political work.56
As a corollary to lessen the load of the Directors of Bureaus, it might have been supposed
that when deputies were appointed, they would have been given specific portfolios within
the bureau. But this was not the case and it was left to individual Directors to determine
what roles their deputies should play.

The broader question is whether the Hong Kong government needs such a centralised
system. There have been occasional moves to devolve minor responsibilities to the
District Councils. The government has also shown some enthusiasm for outsourcing
and a measure of privatisation and it has become a little leaner but most of its functions
are still undertaken within a centralised hierarchical structure. Tsang has claimed that
his administration will continue to focus on people-based governance but this seems
to be limited to identifying what our people need so as to provide them with more
efficient and convenient services.57 It does not extend to de-centralising the government
structure or to permitting civil society organisations to play a larger role. Power remains
highly centralised; decisions are taken in top-down fashion; and the extent to which
the community is involved in decision-making, beyond formal consultation, is still
limited.
Small Government
Small government in the Hong Kong context has at least three closely related meanings:
limiting the functions of government and ensuring that the government is fiscally frugal
and cost-effective; limiting the size and cost of the civil service; and enabling the private
sector to deliver services that might otherwise have to be provided by government. We
consider each of these in turn.
Limiting the Functions of Government

The original functions of the colonial government the maintenance of law and order,
the administration of justice, public works, port administration and the prevention and
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control of epidemics and relief from the effects of natural disasters remained the main
tasks undertaken by the civil service for well over a century. The prevailing belief was
that government should only undertake those functions that were absolutely necessary
and that its main role was to regulate the society in ways that would encourage the
economy to prosper. So entrenched was the view that Hong Kong government should
only have limited functions that, even after it had begun to provide social services on
a considerable scale and was no longer a small government in that sense, it was still
regarded as a model for capitalist systems. In 1979, for example, Milton Friedman wrote
that Hong Kong was an excellent current example of limited government and free
market societies in action.58

Limiting the functions of government was closely related to the belief in the need
for fiscal frugality and a balanced budget. The colonial government could not afford
to fund social policies to any great extent and was under pressure not to do so from
the British government, which did not want to subsidise its colony, and from the local
business community who saw any additional expenditure as a prelude to increased
taxation. Most education, health and welfare services were provided by the churches,
Chinese traditional organisations, such as the Tung Wah and Po Leung Kuk, and by
voluntary agencies.59 The government provided some support through land grants and
subventions but did not become actively involved in the provision of social services
until after the Second World War.

Value for money became, and remained, a central plank in the governments
financial practices. As the colony prospered, the government began to accumulate large
reserves and the Financial Secretary was usually able to budget for a surplus. In only
five of the fifty years before 1997 did the government experience a budgetary deficit.60
The Financial Secretary nonetheless exercised tight control over expenditure and much
time was spent in looking for ways to save money. New proposals were vetted very
carefully and, until the 1970s, departments required the approval of the Finance Branch
for buying even relatively minor items such as a calculator.61 In February 1989, by
which time it was clear that the system was too centralised, the Branch produced its own
proposals for reform which included a re-definition of its role. It stated its difficulties
very clearly:
Traditionally, financial control has been highly centralised To date,
the debate concerning resource allocation has revolved mainly around the
deployment of new resources. This incremental approach is fundamentally
limiting. Attention is focused on new services, and seldom on a re-appraisal
of the need for current activities.62
The document envisaged that in future the Finance Branch should be responsible for
global totals and controlling the overall allocation of resources to Policy Secretaries.63
Although greater devolution was eventually introduced, there was still opposition from
those within the Finance Branch who continued to favour centralised control.

The functions of the colonial government gradually began to expand in the 1950s
when the influx of refugees from China caused the population to increase four-fold in
the space of a few years, putting pressure on the housing supply and stretching other
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facilities. A Department of Labour and a Social Welfare Department were created

although not with the aim of providing services as of right.64 Rather the intent, which
remains the governments starting point to this day, was to re-integrate welfare recipients
into the workforce as quickly as possible. The introduction of the public housing
programme, following the disastrous 1953 Christmas Day fire which left thousands of
squatters homeless, was based on a similar logic. To provide public housing became a
government policy not because the government was moved by the plight of homeless
squatters but because it believed that freeing up the land they vacated would be good
for the economy.65 Social policies were introduced either because they were felt to
serve economic ends or because, as in the case of some very basic labour laws and the
provision of government primary schools, there were fears that if nothing was done the
Communist Party might exploit the situation.

By the 1960s, this approach was insufficient to deal with the social problems of
a much larger population. The Commission which investigated the 1966 riots found
serious problems with the labour laws, weaknesses in other policy areas, and a gap
between government and the people.66 The riots and further disturbances in 1967, which
were a result of the Cultural Revolution, were not immediately reflected in new social
policies aside from reforms to the labour laws. However, in 1972, following MacLehoses
commitment to the much greater provision of housing, education, health and social
welfare, which itself represented a sea-change in the philosophy of government and in
ways of maintaining social stability, the functions of government and the size of the
civil service increased dramatically. Between 1972 and 1982, the establishment grew
from 94,816 to 168,298, an increase of over 56%.67

In the transitional period between 1984 and 1997, there were political and structural
considerations which made it difficult to reduce the functions of government or the
size of the civil service. MacLehoses commitment to the funding of social policies
created expectations that the new services would continue to be provided. There was,
moreover, no financial pressure to cut those services or the number of civil servants
supplying them; the economy was strong and the budget was in surplus. In addition,
the British and Chinese governments were agreed on the need to keep the civil service
stable in the potentially volatile years before the handover. Rather than devolving
functions or taking measures to reduce the civil service, both of which would have
resulted in political opposition, the Hong Kong government instead avoided controversy
and focused on maintaining the status quo. It did create more statutory bodies, some
of which were concerned with civil liberties and which were intended to alleviate fears
about the handover, and it promised new programmes, not all of which were immediately
implemented.68

Despite the more relaxed attitude to public expenditure in the 1990s, the government
did issue a document Serving the Community which presented a rationale for the
system of government in Hong Kong. Living within its means was identified as one
of the key principles.69 It was defined as the way in which government decided on how
much it could afford to spend and how to set priorities to meet community needs within
that limit. In the narrow sense, this meant that government expenditure should not exceed
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87
its revenue, a principle which was embodied in the Basic Law, but which was of little
concern to a government that continued to enjoy large surpluses. The consequence was
that Hong Kong arrived at 1997 with anything but a small government. In 1997, the civil
service had an establishment of 189,136 of which 182,675 positions were actually filled.70
There was also a substantial public sector comprised of public corporations, statutory
bodies and subvented organisations, many of which drew on the public coffers for their
funding. Government pervaded the lives of the citizens of Hong Kong, a far cry from
the original colonial ideal of distance from the citizen and the provision of only minimal
services. Yet, despite the evidence that the government had grown like Topsy, as one
Legislative Councillor put it, the value and commitment to small government and to the
belief that it was the appropriate form for a capitalist system remained unimpaired. By
1997, the government knew that it should slim down, but was still not perhaps quite
ready to do so; recruitment to the civil service again began to rise.
The Size and Cost of the Civil Service

The post-handover government was as expansionary as its colonial predecessor had
been. Major initiatives were announced in the Chief Executives first policy address
including new programmes in education, housing and infrastructure.71 There was no
mention of cost-cutting in the civil service; the focus instead was to be target-based
management and achieving results.72 Thereafter, the effects of the Asian financial crisis,
a further downturn, and the economic consequences of the SARS epidemic resulted in
six consecutive years of budgetary deficits on the operating account. As unemployment
rose, there was political and public pressure on the civil service to reduce its costs and
to return to the principle of small government.

The government took three broad measures to attempt to reduce costs: to downsize
the civil service; to cut civil service salaries; and to introduce an Enhanced Productivity
Programme73 and an Efficiency Savings Exercise scheme to cut expenditure. In his
policy address in 2003, the Chief Executive indicated that the governments objective
was to reduce the size of the civil service to 160,000 by 2006-2007 without compulsory
redundancies.74 The establishment of the civil service then stood at 174,116, which
was already substantially down as a result of a freeze on recruitment and a voluntary
retirement scheme which had targeted 59 grades with surplus staff (see Table 4.4). A
second voluntary retirement scheme, with less generous conditions but covering 200
grades, was introduced in 2003. At that time, the government did not expect to balance
its budget before 2008 and saw the task of cutting the size of the civil service and of
the cost of their salaries as an essential element in its efforts. The effect of the voluntary
redundancy schemes, coupled with the deletion of posts through other cost-savings
schemes, outsourcing and privatisation, reduced the civil service by about 19% from
its peak in the 1990s.75 By April 2007, the economy had recovered and the freeze on
recruitment was lifted and the civil service establishment was expected to rise to 164,500
by March 2009.76
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Table 4.4 Establishment and Strength of the Civil Service, 19972008
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Establishment
190,503
192,508
195,627
193,606
185,784
179,740
174,116
168,954
163,593
160,827
159,401
160,324
Strength
184,639
186,062
189,225
185,868
180,968
173,029
169,100
163,039
157,300
155,019
153,805
153,477
Source: Adapted from Civil Service Bureau, Civil Service Personnel Statistics 2008 (Hong Kong:
Civil Service Bureau, 2008), Table 1.1.

Although the governments efforts in reducing costs and the size of the civil service
were well received by its critics, the decline in numbers was not quite as dramatic as the
raw figures suggested. In 1999, the government introduced a Non-Civil Service Contract
scheme which was designed to enable departments to continue to provide services that
would be affected by downsizing. The contracts were usually for three years at salaries
no greater than equivalent positions in the civil service and with inferior conditions of
service. About one-third of the non-civil service staff were employed in lower level
positions in the Post Office, the Leisure and Cultural Services Department, the Education
and Manpower Bureau and the Social Welfare Department.77 By 2006, when the scheme
was reviewed, non-civil service staff amounted to over 16,000, or about 10% of the
established civil service.78 Although it was originally envisaged that non-contract staff
would not take on the work of civil servants, the review discovered that over 4000 of
them were in fact doing so. The government then acknowledged that the non-contract
staff were being inappropriately employed and undertook to phase out the positions or
to create new ones in the civil service.79

There were also exemptions to the freeze on recruitment. Even at the height of the
freeze in 2003, the Police Force was still permitted to recruit 230 new police officers,
followed by a further 950 in the next two years, and, when recruitment was once more
permitted, an additional 1250 posts in 2006-2007.80 In most departments, though,
exemptions were not granted with the consequence that the staff tended to be overworked and that morale declined. This was exacerbated by the governments tendency
to save costs by creating acting appointments without making a substantive appointment
for some time and by keeping the strength of the civil service at 2 to 3.5% below the
establishment.81 The freeze on recruitment has also had an effect on the demographic
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profile of the service with a dearth of new young recruits available to succeed to senior
positions. In 2008, only 33% of the civil service were in the 20-39 age group.82

Despite the freeze, the cost of the civil service has continued to rise. This is partly
because increments tend to be granted annually, usually without question, and that civil
servants, in consequence, tend to proceed unimpeded to the top of their salary scale.
For those on permanent and pensionable terms, there are also generous housing benefits
and education allowances. An ageing civil service also means that more civil servants
are at or near the top of their ranks and are paid accordingly. By March 2008, 67% of
all civil servants were in the 40-59 age group whereas only 33% were in that age group
in 1984;83 77% of all civil servants were at the maximum pay point of their rank in
2008.84

As civil servants retire, pensions become an increasing burden on the government.
The introduction of the Mandatory Provident Fund in 2000, which all new recruits must
join and which is less generous than the previous scheme, may eventually reduce those
costs. In the interim, pension costs continue to rise and are a necessary expense associated
with redundancy schemes. Financial provision for pensions, for example, rose sharply
in 2002 and 2003 because of voluntary retirements and the ageing workforce. Thus,
despite the significant drop in civil service numbers, the freeze on salaries in 2000/2001,
and pay cuts from 2002 onwards, by 2008 there had been only a slight reduction in
recurrent costs.85

Cutting civil service salaries was one of the governments major solutions to the
problem of burgeoning operating costs. In 1999, changes to conditions of service lowered
the salaries of new recruits although the government did not at first reduce the salaries
or benefits of those already employed. As the economy worsened, it came under strong
pressure from the business lobby to bring salaries in line with the private sector. In
February 2000, the Chairman of the Liberal Party, James Tien Pei-chun, argued that there
was a substantial gap between conditions of service in the private and public sectors and
called on the government to take action. Civil servants must choose he said between
high pay and job security because taxpayers cannot afford to let them have both.86
The government responded by freezing civil service salaries and then eventually decided
to take more drastic action by cutting salaries.

It was concerned that any pay cuts would face challenges in the courts because
the letter of appointment and the Memorandum on Conditions of Service under which
most civil servants were employed did not explicitly permit the reduction of salaries.87
Another issue was whether the government was in violation of Article 100 of the Basic
Law, which assured civil servants that they would not suffer from conditions of service
which were worse than at the handover. The government believed that the pay cuts were
constitutionally valid because they still left civil servants salaries above 1997 levels.
Nonetheless, it chose to legislate its proposed reductions through the introduction of
a bill, the Public Officers Pay Adjustment Bill, taking the view, which proved to be
correct, that the courts would confirm its right to cut civil service salaries in this way.
The Ordinance provided that pay would be reduced by 4.42% for the directorate and
upper salary band, 1.64% for the middle salary band and 1.58% for the lower salary
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band. The Bill was fiercely debated in the Legislative Council but was eventually
narrowly approved in July 2002. The civil service associations immediately organised
a demonstration against the decision with an estimated 25,000 civil servants and 113
different staff associations taking to the streets.88

Civil servants were clearly aggrieved that their pay had been cut but they were
almost equally annoyed that the traditional ways of deciding civil service pay adjustments
through annual research by the Pay Survey and Research Unit had not been followed and
that there had been very little consultation on the matter.89 The Hong Kong Confederation
of Trade Unions, whose membership included some civil service associations, argued,
for example, that:
the government has rejected any need for consultation with civil servants
unions over increased outsourcing, casualization and privatisation. Moves to
now legislate a new round of pay cuts exposes the failure of consultation
which can never replace collective bargaining rights.90
Other civil servants argued that the decision to reduce pay constituted a dispute under
the 1968 agreement with civil service unions and that a Commission of Inquiry should
have been set up to investigate the matter. Civil servants took out four court actions
over the decision, including a petition for judicial review. When the government
sought to reduce civil service pay further in 2003, it adopted a more conciliatory and
consultative approach. In February 2003, the Secretary for the Civil Service announced
that he had reached a consensus with the staff sides of the four Central Consultative
Councils and representatives of the four major unions.91 The government had decided,
many months prior to the consultation, to reduce salaries to dollar values at June 1997
levels for all civil servants below the third pay scale point on the directorate pay scale
in two adjustments of broadly equal amounts.92 The civil service staff associations
were unable to persuade the government to make any major concessions. They did
manage to postpone the implementation of the pay cut to January 2004 and January
2005 and to obtain a commitment to improve the pay adjustment mechanism, which
was already being studied by a task force, but the force of public opinion was clearly
against the unions on the issue of civil service salaries. The government then introduced
a further bill, which was passed by the Legislative Council, which gave effect to the pay
reductions. There were also cut backs in acting and duty-related allowances and some
reductions in education and housing allowances.93

The government estimated that, when the pay cuts were fully implemented, it
would save $7 billion annually on salaries and subsidies to subvented organisations,
which were required to make similar adjustments.94 But the savings came at a very
high political cost. Morale in the civil service was already low when the pay cuts were
introduced. Their effect was to alienate a substantial proportion of the civil service still
further and to add to the growing list of the discontented. When Tsang became Chief
Executive, he was more conciliatory towards the civil service; the economy was already
improving and the government could afford to entertain requests for pay rises. By 2008,
it was offering the civil service staff associations pay increases of between 5.29% and
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91
6.30%, the highest for ten years, on the basis of factors that included the state of civil
service morale.95 The cost of civil service salaries and personnel-related expenses was
approximately the same as it had been in 2001 at $69.5 billion but as a percentage of
recurrent expenditure it had dropped from about 36% to 27%.96
Divesting Functions to the Private Sector

In theory, a government that follows minimalist principles should be prepared to divest
its non-core functions to the private sector or to voluntary agencies. Throughout its
history, the Hong Kong government has been willing to permit voluntary agencies to
deliver services which it has subsidised. Under colonialism, control over those agencies
was usually quite loose unless the government believed that their methods threatened
political stability. After 1997, the concern with reducing costs and Tung Chee-hwas
belief that the government could benefit from more private sector involvement in the
provision of services led to an even greater stress on the need to divest some government
functions to the private sector or voluntary agencies. The divestment did not mean that
the government relinquished control. While it was willing to encourage purchaser/
provider relationships, its controls over the providers were often tightened to the point
where there were complaints from agencies that they had too little autonomy.97 The
government enhanced its supervision of the delivery of services in ways that were often
much more interventionist than its colonial predecessor. Paradoxically, the efficiencies
resulting from divestment were often reduced by the administrative costs of supervising
the proper delivery of services.

After the handover, the government took critical measures to increase its control
over social welfare and education provision. The Lump Sum Grant scheme, to which
162 of 173 NGOs had subscribed by 2008, gave the social welfare agencies more
autonomy over the way in which they would run their budgets but also meant that they
were required to bring their salary scales more in line with government.98 The scheme
stipulated that the agencies should include a member from the government on their
boards. In education, the introduction of the school management reform also resulted
in proposed changes to the school boards which the Catholic Church, in particular,
argued violated the traditional partnership between the church and the state and was
consequently in conflict with the Basic Law.99 The government succeeded in defending
its position but the head of the Catholic Church in Hong Kong, Cardinal Zen, believed
that the measures were prompted by the Chinese governments desire to reduce the
influence of the churches and refused to implement them.100 The managerial emphasis
on the relationship between the government and the agencies provided the government
with more channels to exert control in exchange for greater financial autonomy in the
welfare agencies and more participation of teachers, parents and government in school
management affairs.

The post-1997 governments emphasis on private sector involvement in the delivery
of goods and services has been particularly noticeable in the growth of outsourcing. A
2006 survey revealed that the government had about 4000 outsourcing contracts with
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92
a value of about $200 billion, over six times the value of contracts in 2002 although
the number of contracts awarded had declined.101 A majority of contracts, in terms of
value, were in public works although many services have also been outsourced. In most
departments, for example, cleaning, horticultural services and gate-guard duties have
been contracted out. Outsourcing is attractive to the government for three reasons. First,
it helps to meet its proclaimed objective of big market, small government102 and the
governments intent to involve the private sector wherever possible. Second, it reduces
costs because the private sector may provide some services, such as cleaning, at a lower
price than the public sector. Third, outsourcing does not divest the responsibility of
providing the function from the government; a contract can be terminated if the service
is not satisfactory. As the Efficiency Unit puts it, Departments should note that they
can outsource services but not the ultimate responsibility because the government is
accountable for the standard of service.103

Other forms of private sector involvement have not led to any divestment of
functions. There have been successful build, operate and transfer projects for tunnels
for many years but some of the more recent public-private partnerships, such as the
West Kowloon Cultural District,104 have run into difficulties and cost overruns. Since
the government has to face legislative scrutiny on its expenditure, failed projects have
considerable political implications. In addition to public/private partnerships, there
have also been some privatisation measures that have helped to reduce the size of the
civil service. The privatisation of the management of some public housing estates, for
example, reduced numbers in the Housing Department significantly.105

Although Tung believed that the private sector generally performed more efficiently
than the private sector, that view was not shared by senior civil servants schooled in
the fiscal frugality and value for money tradition. Rather, their inclination, even when
services are being delivered by the non-profit organisations or the private sector, has
been towards maintaining strict cost controls and not divesting ultimate responsibility
for the service to those bodies. The consequence has been that, while the government
in 2008 was leaner than it had been at the handover, it had increased the number of
functions that it was performing. It was attempting to move to a more managerial role
in some areas but maintaining control and centralising the government structure seemed
to be a more important consideration than divestment.

The structure and functions of the Hong Kong government have been greatly
influenced by the core principles of centralisation and hierarchy, the belief in the values
of a generalist administrative elite and political neutrality, and in small government,
efficiency and fiscal frugality. Although there have been times at which the government
has deviated from these principles, the explanation for the deviation usually lies in the
specific political and economic circumstances in which it finds itself. In the transitional
period, for example, the government could not afford to downsize the civil service
because its first priority was to maintain political stability. In post-1997 Hong Kong,
the government did come under pressure to reduce the size of the civil service largely
because economic circumstances did not permit it to retain such a large establishment.
Each time that the government has sought to deviate from its core values, influential
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93
voices have been raised to re-affirm their importance. In the post-1997 economic climate,
business groups were able to make a persuasive case that Hong Kong should return to
its previously proclaimed belief in big market, small government. When the traditional
conception of political neutrality came under threat, senior civil servants were quick to
point out that the quality of policy advice would be affected. When lines of command,
and consequently effective centralisation, were threatened after the introduction of the
POAS, Tsang soon reverted to the time-tested structure of the traditional civil service.
There is, in short, something of a default model at work. If the governments structure
and functions deviate too far from core principles, and there is no good reason for doing
so, there is usually sufficient political and public pressure to require the government to
revert to previous practice.

That is not to say that the government has become ossified or that the key principles
in themselves are necessarily always consistent. The managerialist reforms and the stress
on private sector involvement in the provision of government functions introduced under
Tung enhanced centralisation and control and helped to reduce expenditure at least in
the short term. The stress on small government, even with a significantly reduced civil
service, does not mean that the government has divested itself of many of its functions
or responsibilities. Depending on how small government is defined, the Hong Kong
government may or may not be a small government. What is certain is that it has a large
scope, many functions and a dominating presence within the community. In structure,
it remains a traditional bureaucracy with a focus on hierarchy and top-down lines of
command. In function, it remains willing to divest, provided it maintains control, and
to adapt pragmatically to new challenges and responsibilities.
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The Civil Service:

Personnel Policies
ew public management is the name given to the range of public sector reforms that
have been adopted around the world with the aim of reducing the size and cost of
the public service, encouraging greater interchange of personnel between the public and
private sectors, introducing more private sector practices, and divesting government of
assets and activities that are no longer considered to be essential or cost-effective. These
broad features of the reforms may be interpreted in very different ways, depending on
specific political, economic and social circumstances. New public management does not
offer a single road map to a particular destination; rather, it is a basket of possibilities
from which a reformist government might select, adapt and implement in ways which it
regards as most suitable for local conditions. In Hong Kong, it has been cogently argued
that attempts to reform the public sector have been more a reaction to the political and
economic difficulties which the government has encountered than attempts to converge
with what the more enthusiastic advocates of new public management consider to be a
world-wide revolution.1 Because the governments concern has focused principally on
reducing the size and cost of the civil service and encouraging greater private sector
involvement in the delivery of goods and service, changes have related mainly to the
conditions of employment of civil servants, to attempts to improve their efficiency
and productivity, and to various ways of using the private sector to perform public
functions.

In this chapter, we consider how key principles shaping the status and behaviour
of civil servants have been affected by attempts to implement public sector reforms.
These principles constitute widely-held beliefs that:
the recruitment and promotion of civil servants should be made on grounds of
merit and that most civil servants should enjoy tenured positions for the duration
of their working lives; and
the civil service should be as free of corruption as possible and subject to the rule
of law.

Public sector reforms in Hong Kong have not resulted in radical changes to the
structure and functions of government and there has not been significant interchange
ch.05(p.95-118).indd 95
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96
of personnel between the public and private sectors. The introduction of new terms of
employment, however, have had an important impact on the civil service, leading to
greater fragmentation, a reduction in the power of the staff associations, morale problems,
and the creation of an environment in which the assertion of more direct political control
is less likely to meet with resistance. We examine the consequences of the reforms in
four major areas of human resource management: recruitment, selection and terms of
service; pay and fringe benefits; disciplinary procedures; and performance management
and training.

The second principle has also been affected by changes in ICAC practices. Although
a corruption-free civil service subject to the rule of law has very considerable support
in Hong Kong, public sector corruption is no longer regarded as a major problem.
Declines in traditional forms of corruption, such as accepting bribes, the rigorous
enforcement of the Prevention of Bribery Ordinance and the emergence of new issues
arising from greater private sector involvement in the affairs of government have led to
new approaches. We consider the effects on the civil service of the shift from a policy
of corruption prevention to one of promoting integrity.
The Background to Human Resource Management Reform

In January 1999, Tung Chee-hwa, in an appearance before the Legislative Council,
announced a major review of the civil service, citing a need to increase efficiency and to
improve the system at the fundamentals.2 The consultation document, which followed
the Chief Executives speech, spelled out the need for reform in slightly greater detail: the
Asian financial crisis had increased the communitys expectations of government, there
had been a number of incidents in which the public was unhappy with the performance
of the civil service and there had been criticisms of inefficiencies in some departments.3
Although neither the incidents nor the inefficiencies were specified in the document, it
may be presumed that they included the way in which the Department of Health, the
Agriculture and Fisheries Department and the Urban and Regional Services Departments
had handled the avian flu outbreak in December 1997 and the blame attributed to the
civil service for the chaotic opening of the new airport in July 1998.4 The aim of the civil
service review was to make recommendations that would ensure that the government
of the Special Administrative Region had a clean, trustworthy, quality and efficient
Civil Service.5

The reforms might have been seen in the context of previous efforts to change
human resource management or they might equally be considered to be a prelude to
radical changes to the civil service. Placed in its historical context, the civil service
could argue that it had looked to bring about changes in its personnel policies for
almost the entire decade prior to the 1999 reform document. In 1993, for example, the
Civil Service Branch (later the Civil Service Bureau) had argued for a more flexible
appointment system and did subsequently introduce some changes in human resource
management within the service.6 The localisation of senior levels of the civil service,
the issue of expatriates in the police force, and questions of compensation for those
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The Civil Service: Personnel Policies
97
who were to be displaced or to lose their promotion prospects after the change of
sovereignty in 1997 were central concerns. There was also a slate of reform measures,
many of them initiated by the Efficiency Unit, which were designed to make the civil
service more managerial, more entrepreneurial and more customer-friendly. Other than
for overseas officers, none of these measures threatened either the power structure or the
permanent and pensionable conditions of service of most civil servants. The assumption
was that reform was desirable for example, many civil servants strongly favoured
the changes to their work culture in the 1990s but that it could be accommodated
without disruptions to the status quo.7

The 1999 reform proposals could be interpreted to call that assumption into question.
The idea of radical reform of the civil service had wide and vocal support. Since the
reform document could be considered to be aimed directly at the recruitment, salaries,
conditions of service, and tenure of civil servants, it appeared to offer support for many
who saw the civil service as overly privileged in a time of economic hardship. There
was a widespread belief that civil service salaries and fringe benefits were too high
in comparison with those in the private sector.8 The reduction of the cost of the civil
service had been a long-standing concern of business groups, of the Chief Executive
and even of some senior civil servants.9 In the Legislative Council, the Liberal Party
argued strongly that civil service salaries and fringe benefits should be brought in line
with the private sector and that the service was over-staffed.10 The intention of those
who favoured radical reform was to create a less permanent, more managerial, more
productive civil service which would remove civil servants from the protective cocoon
of careers for life and generous salaries and move them along the path towards greater
accountability for their personal actions.

There was division over what the reform document meant and the pace at which
its recommendations would be introduced. The civil service staff associations objected
to some of the proposed changes to recruitment, promotion, and disciplinary procedures
and were incensed by the subsequent pay cuts. Yet initially the implementation of the
reforms was handled very cautiously. A central pledge, for example, was that no civil
servant would be made redundant as a result of the reforms. The Secretary for the Civil
Service was also constrained by Article 100 of the Basic Law which reads:
Public servants serving in all Hong Kong government departments, including
the police department, before the establishment of the Hong Special
Administrative Region, may remain in employment and retain their seniority
with pay, allowances, benefits and conditions of service no less favourable
than before.
This was clearly designed to re-assure civil servants during the transition. It was probably
not expected to become a matter of political concern because the salaries and conditions
of service of civil servants had always previously improved rather than deteriorated. The
Secretary for the Civil Service, on legal advice, indicated that he would treat Article
100 as a specific commitment and that pay would not be reduced to levels below those
of July 1997.11
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98

Others also sought to place the reforms in the context of what the 1999 consultation
document called a balance between stability and flexibility.12 A year after the proposals
were released, the Chief Secretary for Administration spoke of the need for maintaining
stability while introducing reforms and protecting existing staff while introducing
changes at entry levels13 which perhaps implied a slower pace of change than some of
the proponents of reform wanted. She also reflected on the effects of reform on morale
in the civil service and the concerns of the community in this respect. If the reforms
had been fully implemented, they would have undermined the Weberian character of
the bureaucracy and, in combination with the Principal Officials Accountability System
(POAS), would have significantly reduced the power of the civil service. The proposals
anticipated major changes.14 The intent was clearly to move towards a performanceoriented system which would more closely mirror private sector practice and which
would allow a much greater interchange between the public and private sectors. The
expansion of the public sector outside the civil service would encourage greater mobility
of civil servants which would be facilitated by the portability of pensions and benefits.
The decentralisation of many personnel functions to the departmental level would mean
an erosion of service-wide relativities in salaries and conditions of service and would
increase the powers of Principal Officials. In the following sections, we look at the
specific issues that were raised in the reform proposals and the extent to which they
have been implemented.
Recruitment, Selection and Terms of Service

Recruitment to the Hong Kong civil service has traditionally been on grounds of
merit or, as the consultation document puts it, openness, fairness and the best person
for the job.15 Entry requirements usually involve relevant academic or professional
qualifications, working experience, language proficiency and any other qualities or
attributes that the grade requires.16 Applicants may also have to pass written examinations
and to perform well at a selection interview.17 They must also pass medical examinations
and integrity checking and must meet certain physical and fitness standards in the
disciplined services. All successful applicants are required to be permanent residents
of Hong Kong except for foreign nationals who may be employed as advisers at the
discretion of the government.18 Since 2008, applicants have also been required, as a test
of their suitability but not of their eligibility, to demonstrate knowledge of the Basic
Law by means of a written test.19 The Public Service Commission, established in 1950
as an independent statutory body, has a brief to ensure that merit principles are observed
for recruitment to senior positions in the service. It advises the Chief Executive on
appointments to posts with a maximum salary of $33,330 per month or more and had
approximately 33,200 posts under its purview at the end of 2007.20 Senior appointments
are subject to the provisions of Article 101 of the Basic Law. The positions of Secretaries
and Deputy Secretaries of Departments, Directors of Bureaus, the Commissioner against
Corruption, the Commissioner of Police, the Commissioner of Customs and Excise,
and the Directors of Audit, Immigration and Customs and Excise may only be held by
Chinese citizens with no right of abode in a foreign country.
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The Civil Service: Personnel Policies
99

New recruits usually enter the service at a relatively young age. Prior to June 2000,
unless they committed an offence serious enough to warrant dismissal, they would
normally expect to be permanently employed in the service until retirement. The 1999
consultation document, while noting the advantages of a stable and permanent civil
service, argued that such permanent appointments discouraged able potential applicants
who might not want a life-long career in the civil service, stifled the exchange of
talents with the private sector and led to some civil servants being less than fully
motivated.21 These are debatable assumptions but they were at the heart of radical
changes to recruitment policy. The most critical measure proposed was that the notion of
a permanent career should be re-defined to mean not security of tenure but the promise
of structured career and long-term employment for those who continue to contribute
their best.22

Prior to 2000, successful applicants, depending on their place of origin and the
requirements of the position, were usually offered one of four terms of appointment:
permanent and pensionable terms (either local or overseas) or agreement (contract)
terms (either local or overseas). After the signing of the Sino-British agreement in
1984, the Civil Service Branchs main concern was the localisation of the service,
especially at the most senior levels and in the Police Force. The policy of localisation
had been in place since 1946 but progress had been very slow. In 1982, for example,
at the start of the Sino-British negotiations, expatriates held 54.3% of directorate level
positions (343 of 632 positions), 49.3% of administrative grade positions (159 of
329 positions) and 40.6% of the positions in the Police Force of inspectors or above
(877 of 2,160 positions).23 After the Sino-British Agreement, expatriate administrative
officers were required to retire at 57, a golden handshake scheme was put in place
to retire some 70 administrators and 30 policemen in the public interest or as a result
of constitutional change, and some professional ranks, such as engineers, were soon
entirely localised.24 Newly appointed expatriates, who included some ethnic Chinese,
were only employed on agreement terms.25 Expatriate officers became concerned about
their futures and challenged the governments plans to localise more rapidly, using the
then newly-introduced Bill of Rights, which prohibits discrimination and gives access
to all public services to permanent residents, as the basis of their case.26 Local civil
service associations and members of the Legislative Council objected to the prospect
that expatriates might continue to occupy senior positions and called on the government
to implement its localisation policies more quickly.27 The government sought to avoid
further court cases and released a consultation document in 1993 which, it was hoped,
would keep both sides happy.

The government proposed that all serving local and overseas officers on agreement
terms would be offered new permanent and pensionable terms provided they qualified
as a local under the Basic Law, were proficient in the Chinese language, met a service
need, had a satisfactory conduct and performance record, and were physically fit.28 The
provisions were aimed largely at expatriate officers and had little effect on locals. Most
civil servants continued to be employed on local permanent and pensionable terms.
In 1997, for example, of a civil service strength of 184,639, 155,012 were on local
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100 The Public Sector in Hong Kong
permanent and pensionable terms with a further 2,902 on agreement terms. Of those on
overseas terms of service, 530 were on permanent and pensionable terms while 715 were
on agreement terms.29 The 1993 consultation document assumed that those on agreement
terms would leave on the expiry of their contracts and that all new recruits would enter
the service on what were designated as new permanent and pensionable terms.30 The
trend, as the consultation document indicated, was clearly towards an almost exclusively
local civil service, fluent in Cantonese and, increasingly, in Putonghua.31 Most expatriates
were not immediately disadvantaged by the new conditions because the majority of
contracts were renewed. After 1997, however, there was a gradual decline in number
of overseas officers. By 2008, there were only 265 remaining civil servants on overseas
terms (see Table 5.1).
Table 5.1 Strength of the Civil Service by Gender and Terms of Appointment, 2008
Gender
Male
Female
Total
Percentage
Local
89,259
47,537
136,796
(88.6)
Overseas
265
0
265
(0.2)
Common
1,183
243
1,426
(0.9)
New
10,808
5024
15,832
(10.3)
Total
101,515
52,804
154,319
Percentage
(65.8)
(34.2)
(100)
Source: Adapted from Quarterly-updated Civil Service Personnel Statistics, www.csb.gov.hk

(accessed December 26, 2008). Figures are as of September 2008.

The 1993 document did not challenge the fundamental premise on which the civil
service had been based. If the employee was on permanent and pensionable terms, apart
from failures during the probation period or a gross breach of misconduct, a job was
a job for the working life of the employee. An internal document, The Consultation
Document on Human Resource Management Review, circulated to senior management
in the branches and departments in 1993 did foreshadow some of the issues that were
to become important in the future. The central argument presented in the document was
that the terms of appointment had reduced responsiveness to service needs32 and that
there was a need to introduce more flexible contract terms. No changes were made in
appointment policy, however, until January 1999 when common terms of appointment
and conditions of service, that is, those that did not distinguish between overseas and
local terms, were finally introduced. These terms only applied until June 2000 when the
new terms for fresh recruits came into effect.

The 1999 proposals recommended that new recruits should be appointed on
agreement (contract) terms rather on permanent and pensionable terms as in the past.
The first step in the implementation process occurred in June 1999 when the Standing
Commission on Civil Service Salaries and Conditions of Service produced a report on
starting salaries which, on the basis of a survey of private companies, reduced starting
salaries significantly.33 The overall decrease was between 6% and 31% for new civil
servants on the Master Pay Scale (MPS), and between 3% and 17% for disciplined
services staff. The entry point for professional and related grades was lowered from
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The Civil Service: Personnel Policies 101
MPS point 27 ($35,285) to MPS point 22 ($28,075) and for degree holders from MPS
point 16 ($21,010) to MPS point 11 ($16,095).34 The Commission observed that there
had been far more drastic reduction in pay in the private sector for degree holders
than for technicians35 and noted that this might be a result of an increase in the supply
of graduates and of the labour market favouring occupational skills. All entry points on
the MPS were reduced from their previous levels.

New recruits were further disadvantaged by the extension of their probationary
period. Prior to the reforms, the normal probationary period had been two years at
which point, subject to satisfactory performance, the appointee would then be offered
permanent and pensionable terms. Under the new system, an appointee would serve
on an initial probationary contract of three years. If performance was judged to be
satisfactory, the civil servant would be offered a further contract of three years and
could only then, again subject to continuing satisfactory performance, accede to
permanent and pensionable terms. The Civil Service Bureau was very careful to assure
the civil service staff associations that the conditions of service would only apply to
new recruits and that civil servants already in post would not be affected by the new
provisions.36 In addition, the Public Service Commission recommended that the offer
of permanent terms after three years should be retained for the disciplinary services. 37
The initial impact was limited because there was a freeze on civil service recruitment
from April 199938 although some departments were still permitted to recruit on an
exceptional basis.39

As we saw in Chapter 4, the Hong Kong government has tried various means to
reduce the size and cost of the civil service: by encouraging civil servants to retire early
through voluntary retirement schemes, by introducing a Provident Fund, in place of
pensions, which applied to new recruits, by employing non-civil service contract staff
and by outsourcing some government activities. New recruitment policies provided an
additional and long-term solution to the problem of the cost of the civil service. But
there were also long-term adverse consequences resulting from the new conditions of
employment. First, the new system has made it very easy to terminate the contracts of
new recruits. For a cash-strapped civil service and a head of department who wants
to balance the budget and reduce expenditure, terminating the employment of new
recruits after one or two contracts may seem the easiest course of action. There has
been some support for undertaking precisely such a course of action. The Public Service
Commission has stated that confirmation to the permanent establishment should not be
automatic and advocate[s] the need for more realistic assessment of the performance of
probationers/officers on trial.40 It also said that it was pleased that some probationers
had their contracts terminated and a number of others had their probationary period
extended. As yet the numbers on new terms of service are relatively small but they are
likely to grow rapidly as the civil service gradually ages and recruitment resumes (see
Table 5.1). A rapid turnover of new recruits, whose contracts are not renewed, would
not necessarily be in the best interests of the civil service or the public. The institutional
memory of the organisation could be adversely affected, innovation and enthusiasm
might be diminished, and probationers could well spend a good proportion of the latter
part of their contracts looking for alternative employment.
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A second problem is that the system creates a yawning chasm between those on
permanent and pensionable terms and those who joined the service after April 2000.
Not only is there a significant salary difference between the two groups but other fringe
benefits and pensions have also been detrimentally affected. The principle of equal
pay for equal work is essentially violated when those on inferior conditions of service
are required to perform the same tasks as those on permanent and pensionable terms.
This could affect morale, as it did with the 4000 non-contract civil service staff who
until 2007 were working in positions normally filled by civil servants,41 and could also
substantially increase the wastage rates as new recruits look for other better-paying and
possibly more secure positions. In the executive grade, for example, the salary entry point
was substantially reduced in 2001/2002. As economic conditions improved, turnover
increased and the entry point was raised in 2007 to attract more applicants. The effects
of this, however, was to disadvantage the remaining 2001/2002 recruits who were now
paid at the same salary as new entrants even though they had five or six years more
service. Similarly, during the economic downturn, the Police Force was able to recruit
constables with degrees. In 2003-2004, 43% of the new recruits held degrees.42 By
2006-2007, this had declined to 17% and, with better opportunities in the private sector
and at the officer level in other disciplined services, the Force was having difficulty
retaining the degree holders that it had.43 There is also some evidence that new recruits
regard their positions more as a job than as a career for life and are consequently less
likely to join civil service staff associations.44

A third difficulty with the new recruitment policies is that they change the
demographic profile of the civil service without offering an adequate substitute to replace
experienced staff and without providing sufficient incentives for able new staff to join
the service. This has been exacerbated by the stop-start policies on recruitment which
have had a marked effect on succession planning. In the 1980s, as the young recruits
from the MacLehose era began to acquire experience, the civil service had a wealth of
talent to promote to senior positions. By 2008, with only 33% of civil servants under
the age of 40, and many of those in the junior ranks of the disciplined services, the civil
service had a major problem with succession planning.45 New public management logic
would suggest that the solution is to recruit from the private sector. But this may not
be an attractive option either in salary terms or in terms of working style. Those who
have so far been parachuted into the senior levels of the government from the private
sector have not always found it easy to adapt to a civil service whose ethos, traditions
and procedures stand in sharp contrast to those of the private sector. Further, the civil
service has traditionally promoted from among internal candidates and, in many cases,
does not even advertise vacancies externally. In 2005, for example, 118 of 121 vacant
posts at the directorate level were filled by internal promotion.46

With the lifting of the freeze on recruitment in April 2007 and improvements in
the economy, the attractiveness of the civil service as a career became a concern for the
Civil Service Bureau and the Public Service Commission.47 Recruitment exercises still
produced large numbers of applicants but the Public Service Commission felt that this
might simply be a backlog resulting from the previous freeze on recruitment. It attempted
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to improve procedures, reducing the length of time required to appoint new employees,
and also conducted research with the Civil Service Bureau on the employment market
for eight selected grades.48 The increase in starting salaries and the global financial crisis
may help to sustain the number of applicants. The difficulties arise in conditions in the
workplace once the appointment has been made. The new conditions of employment
have fragmented the civil service into those on permanent and pensionable terms who
enjoy greater benefits and better salaries than those who come in on the new terms of
service. While eventually there will be fewer employees on permanent and pensionable
terms, there is likely to be a continuing sense of relative deprivation amongst those who
are performing the same tasks for less reward.
Pay and Fringe Benefits

Civil service salaries are based on two principles, which are often quoted, sometimes
criticised and much debated. The first is that remuneration should be sufficient to attract,
retain and motivate staff and that it should be regarded as fair both by themselves and
the public they serve.49 The second, much more contentious, principle is that civil service
pay should be broadly comparable with pay in the private sector. Both principles date
from the 1960s. The comparability with the private sector principle was introduced
by the 1965 Salaries Commission and the fairness principle can be traced to the
governments agreement with the staff associations in 1968.50 The result of the practical
application of these principles has been that when times are prosperous the civil service
thinks that it is underpaid and when times are bad the private sector thinks that the civil
service is overpaid. But both principles raise a host of questions about whether pay levels
are or are not attracting the best people and how comparisons can actually be drawn
between very different positions in the public and private sectors.

Prior to 1979, civil service salaries were determined by periodic salaries
commissions. In times of relatively low inflation, it was sufficient for these commissions
to be appointed every five or six years. After 1971, it became clear that continuous
management of the pay determination process was necessary. The first attempt to try
and ensure comparability with the private sector was through the introduction of an
occupational class system whereby the governments Pay Investigation Unit tried to
identify similar occupational classes in the public and private sectors and then made
appropriate changes to salaries. This approach resulted in industrial unrest since particular
grades could be upgraded or downgraded, in salary terms, depending on the often volatile
situation in the private sector. This means of establishing comparability was abandoned
in 1974 when the government moved to annual pay trend surveys. Nonetheless, its legacy
remained and was at least partially responsible for the wave of industrial unrest which
affected the civil service during the mid and late 1970s.51

The government responded to its worsening staff relations by creating a Standing
Commission on Civil Service Salaries and Conditions of Service in 1979. Subsequently,
three further standing committees, one for the six Disciplined Services and the
Independent Commission Against Corruption, one for the Directorate and one for
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the Judiciary, were established to make recommendations on pay for civil servants
on those scales. They have similar terms of reference to the Standing Commission
although their procedures have evolved in different ways.52 The principal roles of the
Standing Commission are to review the principles and practices governing the grade,
rank and salary structure of the Civil Service, the salaries of individual grades and the
methodology used to determine comparability with the private sector and to recommend
to the Chief Executive any changes it considers necessary.53

Soon after its inception, the Commission rejected the occupational class method
as a means of determining comparability between public and private sector pay and
instead adopted a qualification group approach, establishing educational qualification
entry benchmarks for new recruits and de-linking the pay scale from direct comparison
with groups in the private sector. Civil service associations and even heads of department
might still claim that particular grades were underpaid or that they should be paid more
to attract necessary new staff but they could no longer claim that they should be paid
exactly the same as their private sector counterparts. The educational qualification
method enabled the government to engage in broad-banding so that grades with
similar requirements for appointment were collapsed into qualification groups, of which
there are currently twelve, in each of which a common pay structure prevails.54 Broadbanding has been defended on the grounds that it promotes equity and parity but it is
also a useful management tool because it forestalls the argument for special treatment for
particular grades. The staff associations have frequently made cases for other factors,
such as obnoxious duties, excessive workloads or unreasonable hours, to be taken into
consideration in pay determination for their grades. The Commission has responded by
making rules about what remuneration these other factors should attract. It has never
entirely ruled out using pay as an incentive when recruitment is a problem and some
grades have seen their pay increased as a result of a shortage of supply of new recruits.
The overall effect of the system has been to enhance stability, possibly at the expense
of efficiency.55

The Standing Commission also took on board the wider issue of staff relations.
Staff relations had been a focus of government concern since the 1968 agreement
with three service-wide staff associations which led to the formation of the Senior
Civil Service Council, a body on which the staff associations were represented and
which the government undertook to consult in the event of any changes in conditions
of service.56 Other central consultative bodies were established later: a Model Scale 1
Council in 1982 constituted on the staff side by members from eight staff associations
mainly representing labourers and artisans; a Police Force Council formed in the same
year with representation from four police staff associations; and a Disciplined Services
Consultative Council created in 1990 with representation from fifteen staff associations in
the disciplined services other than the Police Force.57 The problem that faced the Standing
Commission in the early 1980s was that although consultative committees did exist at
the departmental level they were not well developed. In a wide-ranging report released
in 1980, the Commission laid down uniform rules covering such matters as membership,
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frequency of meetings, the use of Cantonese and attendance by Civil Service Branch
representatives.58 These measures, coupled with the new method of determining pay,
probably helped to prevent pay and conditions of service issues from escalating into
territory-wide disputes as they had done in the late 1970s. Departmental consultative
committees are now the major institutional mechanism for resolving differences between
staff and management in all departments with a staff of over one hundred. Their meetings
are attended by representatives of the staff associations and by a member of the Civil
Service Bureau who explains government policies. Pay and conditions of service
are usually an important topic for discussion although the committees also deal with
appointment and promotion criteria, welfare and recreational activities and improvements
in productivity.59

Civil servants are paid on one of eleven pay scales but most fall within the six major
pay scales with over 60% coming under the Master Pay Scale (see Table 5.2). The other
scales are for the directorate level staff, the directorate (legal) officers, the police, other
disciplined services which have three pay scales for commanders, officers and rank and
file, the Model Scale 1, which is comprised mainly of artisans and labourers, and the
training, technician and craft apprentice pay scales.60 Since pay increases (or reductions)
are normally issued in three bands for upper, middle and lower ranking civil servants
and relativities between the bands are approximately maintained, the pay scales tend to
reinforce the hierarchy within the civil service. The ratio between the lowest paid and
highest paid civil servant is considerably greater than it would be in most developed
countries. But, because the government considers itself to be a good employer, historically
the lowest paid civil servants have been better paid than their private sector counterparts.
Since 2000, this differential has been reduced to some extent by outsourcing many of the
services that the lowest ranking civil servants previously provided.
Table 5.2 Civil Service Pay Scales, 2008
Type
Directorate Level
Master Pay Scale
Scale
D1-D10
MPS 049
Salary Range ($ per month)
$103,400$241,750
$8,455$92,720
General Disciplined Services

(Officer) Scale
GDS 1d-38
$16,500$97,545
GDS 1a-27
$13,105$29,365
Police Pay Scale
PPS 1a59
$15,235$202,000
General Disciplined Services

(Rank and File) Scale
Model Scale 1
MOD 013
$8,980-$11,700
Strength
1,214
91,414
23,976
27,453
10,176
Source: Pay Scales, www.csb.gov.hk; Quarterly-updated Civil Service Personnel Statistics, www.
csb.gov.hk (accessed 26 December 2008). Figures are as of 28 September 2008.
Note: The quarterly civil service personnel statistics do not differentiate between officers and rank
and file in the General Disciplined Services.
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Comparability with the private sector is determined by an annual pay trend survey
of salaries in private sector companies. The Joint Secretariat, which is attached to the
Standing Commission, houses the Pay Survey and Research Unit which carries out the
surveys on the basis of a methodology established by an independent Pay Trend Survey
Committee.61 Until 2007, the Committee surveyed 91 companies representing the major
economic sectors, choosing its sample on the basis that the companies were typical
employers in their field and had a staff of more than 100. In 2007, the methodology
was changed to give a 25% weighting to smaller companies with between 25 and
99 employees.62 The survey includes all full-time employees of the company, whose
basic salaries are the equivalent of three broad salary bands in the non-directorate
staff of the civil service, and takes into account salary adjustments made over the year
and any additional payments, merit increases and increments. When these have been
calculated, they are translated into indicators which represent the weighted average pay
adjustment for all surveyed employees within each salary band. The findings are then
sent to the Secretary for the Civil Service. Once the findings have been confirmed, the
major staff associations make a claim for an adjustment. The government, which is
obliged to consult with the staff associations under the terms of the 1968 agreement,
considers the submission and then makes a pay offer. The staff side comments on the
offer and a proposal is then submitted to the Executive Council which decides on the
annual adjustment subject to the provision of funds by the Finance Committee of the
Legislative Council.

The pay trend surveys assess changes in remuneration within the service but they do
not address the more difficult question of establishing whether the annual determination
of the trend accurately reflects pay levels in the private sector. Until December 2001,
the difficulty of making the comparison, and the opposition of the staff associations,
persuaded the government that it should be left unresolved. A pay level survey conducted
in 1986 found that, except for those on the Model Scale 1 pay scale, civil servants
salaries and fringe benefits outstripped private sector compensation by as much as 23%
on the lower pay band and by up to 52% on the upper pay band.63 The civil service
staff associations raised strident objections to the consultants methodology, arguing that
it was based on only three factors know-how, problem-solving and accountability
and that other important factors, such as skill and working conditions, had been
ignored.64 Under the 1968 agreement, this constituted a dispute and the government was
obliged to appoint a committee to investigate the issue. The Committee duly reported
that the pay level survey does not provide a sufficient basis for making adjustments
to civil service pay either now or in the future.65 There the matter rested. Faced with
the political problems of the transitional period, the government had no desire to create
more friction by raising the matter of the civil service pay level and the staff associations
saw no advantage in doing so.

The 1999 civil service reform document, however, foreshadowed potentially major
changes to the civil service pay system. It noted, for example, that pay was not linked
to performance, that pay and fringe benefits should be more closely linked to private
sector practices and performance appraisal and that the pay trend system might have
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to be improved. A less costly civil service was critically important to the governments
reform agenda and the issue of the comparability of pay with the private sector had to
be confronted, if it wished to maintain credibility. In December 2001, the Secretary for
the Civil Service invited the Standing Commission and its counterpart, the Standing
Committees for the Disciplined Services Salaries and the Directorate Salaries, to
conduct a comprehensive review of the pay policy and system for the civil service.66
The review was charged with examining the fundamental principles underpinning civil
service pay policy, especially the principle of broad comparability with private sector pay,
the methodology for determining pay levels, the rationalisation of the grading structure
of the grades and ranks in the service, the possibility of increasing the motivation of
the civil service through an improved and more flexible salary system, the annual pay
adjustment mechanism and the preservation of the integrity and stability of the civil
service while system changes took place.67 These were extensive terms of reference
and clearly envisaged a report that would make recommendations for radical changes
to the pay policy system. The civil service staff associations, perhaps predictably, were
opposed to the review on the grounds that economic conditions were too volatile to
arrive at conclusions that would stand the test of time.

The Task Force set up to conduct the review produced its initial interim report
in April 2002.68 While it said that it had an open mind on the issues, the matter of
reducing the cost of the civil service was clearly on its collective mind, particularly
because its members believed that it was obvious that the community would like to see
a thorough re-thinking of the basic principles of the existing pay system.69 A second
report released in September 2002 outlined its long-term vision for the pay system. It
reiterated many of the basic principles that had previously governed the system including
that the system should be able to attract and retain staff of suitable calibre to provide the
public with an efficient and effective service; that it should be fair; and that it should
be flexible but stable enough to assure civil servants of their reasonable expectations.70
But it left the door open for the introduction of performance pay, enhanced performance
management systems, measures to allow managers to use resources more effectively and
regular reviews of the system.71 The Task Force favoured regular and comprehensive
pay level surveys but recognised methodological difficulties and deferred the issue of
comparability with the private sector pending a study of the subject and the development
of a practical framework and methodology for the survey. The Task Forces other major
recommendations were to study ways in which fixed pay scales might be replaced
with pay ranges; to consider improvements to the staff appraisal system in support
of performance pay and flexible pay ranges; and to study how the practical problems
associated with a simplified and decentralised pay administration could be overcome.

The Civil Service Bureau proceeded cautiously with the work of reforming the
pay system, and with good reason. The government had introduced a first round of
civil service pay reductions in 2002 at a time when the Task Forces reports were
being considered, a move which raised political tempers on the pay issue and aroused
strong opposition from the staff associations.72 Despite legal action by the associations,
who argued that the move was in contravention of the Basic Law, civil servants
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demonstrations against the cuts, and complaints that the reductions violated the existing
pay determination system, the government was determined to bring civil service salaries
more in line with what it believed were equivalent levels in the private sector. By April
2003, it had decided to introduce a second round of cuts to reduce the value of all pay
points on all civil service pay scales to the levels as at 30 June 1997...73 Reductions
to salaries were introduced in two phases in January 2004 and January 2005. To make
additional radical changes to the pay system at a time when staff associations were
incensed by the governments decision and when the government was already under
pressure over its decision to legislate under Article 23 of the Basic Law would have
been very difficult. The Task Forces report might have created a long-running battle
with the staff associations. Its strong advocacy of a pay level survey was opposed by
the associations and could have caused unrest in the service and the acceptance in
principle of performance pay, pay ranges and the decentralisation of the system had
potentially far-reaching effects on the structure of the civil service and of practices,
such as performance appraisal.

Nonetheless, in April 2003, the same month that the government decided to legislate
the second round of pay cuts and following the report of the Task Force, the Civil Service
Bureau sought to develop concrete proposals for change.74 With the assistance of two
committees, one composed of advisers who had been members of the Task Force and
some senior civil servants (the Steering Committee on Civil Service Pay Adjustment
Mechanism), the other composed of representatives of the staff associations and some
senior civil servants (the Consultative Group), the Bureau produced a progress report,
published in November 2003, which made it clear that the government had retreated
from some of the more radical possibilities raised by the Task Force. The principle of
comparability, for example, was to be expressed as broad comparability rather than any
attempt to identify appropriate private sector analogues for every position in the public
sector.75 In setting pay levels, the Bureau said that the government should continue to
follow the established principle that the government should follow, but not lead the
private sector76 although presumably it did not intend to overturn the principle that the
government should also be a model employer. The Bureau was cautious about internal
pay relativities, which it thought should not be disturbed, and made no comment on
the introduction of performance pay or linkages between performance appraisal and
pay. Even in those areas which it endorsed, such as the need for a pay level survey,
the Bureau left most matters undecided. It proposed to employ consultants to advise on
developing a feasible and detailed methodology for a pay level survey, to review the
methodology of the pay trend surveys, and to introduce enabling legislation to allow it
to adjust civil service pay in future rather than returning to the Legislative Council, as
it had done in 2002 and 2003.77

The Bureau did eventually proceed with the pay level survey and with its efforts
to improve the pay trend methodology. But its mood remained conciliatory. There was
wide consultation with the staff associations, the Standing Commission and the public78
and there was clearly an attempt to achieve a consensus and incorporate, if possible,
proposed suggestions into the methodology. The pay level survey system had important
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features that won support from the Standing Commission and the staff associations.79
It was to use the job family and job level method, drawing on broad categories of
positions to make comparisons; to select and match civil service benchmark jobs with
those in the private sector; to select steady and good employers in the private sector
for the surveys; and to collect cash-based pay data.80 The civil service stood to benefit
in the application of the collected information from the survey. First, the upper quartile
of private sector pay was to be used to arrive at the market pay indicator. Second, the
market pay indicator of a defined job level would be compared with the notional midpoint salary of the civil service plus average expenditure on fringe benefits. Finally,
the acceptable range of difference between civil service and private sector pay was set
at plus or minus 5% with no adjustment made to pay levels if the findings fell within
this range.81

When the survey was carried out in 2006, the consultants collected data from 97
companies and matched them against 166 civil service ranks. They then divided the civil
service into five job levels, ranging from the lowest to the highest levels. Since each of
the levels were within the plus or minus 5% range, the Secretary for the Civil Service
was able to announce that there would be no changes to civil service pay scales because
of the broad comparability with the private sector that the survey had revealed.82 The
government did announce that it intended to hold pay level surveys every six years,
starting salary surveys every three years, and to re-introduce pay trend surveys, which
had been suspended following the governments pay cut legislation, with an improved
methodology involving more small companies in the survey. There was no mention of
any intention to initiate a performance pay system linked to appraisal, or to bring in pay
ranges, or to decentralise the pay system, all of which had been mooted in the reform
document83 and by the Task Force and which had some political support from the Chief
Executive and in the Legislative Council.

The governments retreat from a full scale implementation of the managerialist
recommendations of the reform document and the Task Force can probably be best
explained by changing political and economic conditions. First, at the time the changes
were proposed, the government was faced with a host of other volatile issues and may
not have wanted to add further fuel to the fire by pressing for radical change. Second,
the Tsang administration was generally more sympathetic to the civil service than Tung
Chee-hwa and his supporters. In the first two years of his administration, in particular,
Tsang did not seek confrontation with the staff associations and would not have wanted
to deal with the threat of industrial action. Stability in the civil service would have been
greatly affected by changes in the pay system. Third, as economic conditions improved,
the heat was to some extent taken out of the pay issue. Part of the public support for
pay reductions had been a feeling of relative deprivation, that the civil service should
experience the same economic hardships that the rest of the community was facing.
When wages in the private sector began to rise, there was less public focus on the level
of civil service pay. Salary increases were granted in both 2007 and 2008 and the system
once more reverted largely to its pre-2002 form.
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Performance Management and Training

Performance appraisal has been a perennial concern for the Hong Kong civil service
and its deficiencies have long been recognised.84 There has been a persistent central
tendency where civil servants, who are being assessed annually on their performance,
are generally marked in the middle or top end of the scale. Attempts to move away from
the annual reporting system to more continuous and qualitative coaching seem largely
to have failed and the appraisal system has remained a constant source of irritation for
critics of the civil service. Their view is that performance should be evaluated in ways
which enable management to discern and reward the diligent and the able and penalise
the lazy and the incompetent. However desirable this might be, it is not easily achieved.
The 1999 consultation document, the Civil Service Bureau and the Task Force on Civil
Service Pay Policy all assumed that the creation of a more discriminating performance
appraisal system was both possible and necessary. Experience elsewhere, and in Hong
Kong after the reform process was started, suggests that this was wishful thinking.85

The reform proposals maintained that reporting officers were too generous in their
assessments. For some years after 1999, the Public Service Commission supported this
view and called for action to remedy the situation. In 2000, for example, it commended
efforts to tackle the problem of loose and over-generous reporting which undermines the
performance management system86 and suggested that poor performance might result
in demotions.87 By 2007, it was taking a more benign attitude towards performance
appraisal, noting that departments should avoid quota systems and that assessment
panels should avoid downgrading very effective ratings to effective which, it
felt, created a lot of grievances and complaints from staff.88 It also supported Civil
Service Bureau efforts to introduce a competency-based approach, defined in terms of
knowledge, attributes, attitudes and skills89 required to do a job effectively. In 2007,
the competency-based approach was used to assess 80% of the grades in the civil service
and was expected to be extended to the rest of the civil service.90

In the reform proposals, the performance appraisal system was expected to play
a key role in three respects. First, it was seen to be a vital element in linking pay to
performance and in improving productivity. The consultation document pointed out that
increments in the civil service pay scale were not closely linked with performance.91
In June 2000, the Civil Service Bureau established rules which provided that civil
servants could only be given an increment if their performance at work, including
conduct, diligence and efficiency, was satisfactory.92 The Task Force on Civil Service
Pay Policy then explicitly called for changes to the appraisal system, suggesting that
it might be applied more rigorously to determine whether annual increments were
awarded. Yet there appears to have been little success in using the appraisal process
for this purpose. Since 77% of civil servants were on the highest salary point within
their ranks in 2008,93 the appraisal system seems to have had, at most, a limited effect
in determining the increments of most of the civil service. Increments are occasionally
withheld as a disciplinary measure but the appraisal process is not used in the way in
which the consultation document anticipated that it might be.
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A second area in which performance appraisal was expected to be useful was in
identifying under-performers and, if necessary, dismissing them. In March 2003, the Civil
Service Bureau stipulated that an unsatisfactory rating over a twelve-month period,
provided that counselling on performance had been given, could result in action to retire
the offender in the public interest under Section 12 of the Public Service (Administration)
Order.94 In October 2005, the period allowed for unsatisfactory performance was
reduced to six months.95 Yet these measures do not appear to have resulted in more
dismissals. In fact, the number of civil servants dismissed under Section 12 declined
from 38 in 2002/2003 to 14 in 2006/2007, of whom only seven were dismissed for
unsatisfactory performance.96

The third area in which performance appraisal was thought to be significant was in
identifying candidates for promotion. Promotion boards do have applicants performance
records on hand and they do appear to represent an important consideration in the
promotion decision. Some staff associations and many civil servants doubt the validity
of the assessment process and regard reliance on the performance appraisal report
as an unfair way of determining suitability for a position at a higher level. Although
the promotion boards also use interviews to help them arrive at a decision, there is a
suspicion that an adverse appraisal might be a determining influence on the outcome.
Attempts to moderate the results of all reporting officers in the assessment panels do
not appear to have been entirely successful and are affected by the Public Service
Commissions objection to the use of quotas which reinforce the central tendency.97

The difficulty with attempts to reform the performance appraisal system so that
reports can be linked to performance pay, dismissals and promotions has been that
insufficient account has been taken of the informal culture within the organisation.
Performance appraisal is a problem because attempts to introduce results-based systems
run into resistance from supervisors who often value a harmonious and productive
working culture above a more friction-laden, performance-based assessment process
which, in any event, is usually much less reliable and fair than its proponents maintain.98
In addition, reporting officers resent the time spent on performance appraisal and the
number of civil servants which they are required to assess. Some departments have made
efforts to improve their appraisal procedures, and the Civil Service Bureau keeps the
issue under review, but the larger problem of producing fair assessments that adequately
reflect performance remains unresolved.

One of the assumptions behind new public management, which is evident in the
reform proposals, is that rewards and sanctions will improve performance and that more
training will increase productivity and efficiency.99 From this perspective, training is
about acquiring a competency which is then expected to benefit the organisation by
cutting its operating costs. Training may be also be used as a means of imparting core
values to civil servants. The balance between competency training and imparting values
is indicative of the kind of approach that government takes to public management. In
the consultation document, for example, there is no mention of values; the stress is on
tailor-made plans which will enhance organisational and grade competence.100 Since
2006, however, there has been some shift of emphasis in imparting core values to civil
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servants which has been reflected in a larger number of China studies programmes,
increased training in the Basic Law, an important new integrity management programme
run by the Civil Service Bureau and the ICAC, and attempts to draft a civil service
code.101

Until 2004, training was provided through a relatively independent Civil Service
Training and Development Institute which ran courses in Chinese writing and English,
management development, general grades training, information technology, China
studies, training in support of the civil service reforms, a Leadership Enhancement
and Development programme and overseas visits for senior staff.102 Most training took
place in the departments with some, such as the Police Force, having well-established
and comprehensive programmes for all ranks. In December 2003, the Civil Service
Bureau announced plans for a radical re-structuring of the Institute. In future, it was to
concentrate on four areas: senior executive training and development; national studies
programmes; consultancy services to departments on human resource management
initiatives; and promotion of a continuous learning culture within the civil service. The
Institute was also subsumed within the Civil Service Bureau and 47 posts including the
post of the Director, 25 Training Officers and 21 other posts were deleted.103 This was
consistent with the tenor of the civil service reforms, with cost-cutting initiatives at the
time, and with continued stress on departmental training to provide the competencies
required of their officers.

The subsequent additional emphasis on imparting values to civil servants probably
derived from a number of sources. Both before and after 1997, leading Chinese officials
and some Hong Kong politicians had pressed for more education of civil servants
about Chinese history and economics and about the Basic Law. Programmes have been
developed whereby senior civil servants at the directorate level, above point 45 on
the Master Pay Scale and senior ranks of the disciplined services can attend dedicated
training courses at Beijing universities.104 At levels below point 45 on the Master Pay
Scale, civil servants are able to undertake one-week study tours at a Chinese university.105
There is also an exchange programme under which Hong Kong civil servants can be
seconded to Chinese government departments and vice versa. Some 45 departments have
so far participated in the programme.106 The immediate aim of these programmes is to
enhance civil servants understanding of the Chinese environment but the wider goal is
to try to ensure that they act in the national interest rather than simply in parochial terms.
Training in the Basic Law began in the 1990s and courses have gradually expanded
since then. The need for this kind of training is more symbolic than real since most
civil servants probably already have a very good knowledge of the Basic Law. With
the commitment in the Chief Executives 2007 policy address to enhance Basic Law
training for civil servants and the requirement in the following year that new recruits
should demonstrate some knowledge of it, programmes are set to expand at all levels
of the civil service.107

The integrity management programmes derive from changing problems relating to
the ethical behaviour of civil servants, some of which probably stem from the adoption of
new public management practices such as outsourcing. Historically, the ICAC prosecuted
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corrupt civil servants under the Prevention of Bribery Ordinance which involved
establishing that the offender had accepted an advantage.108 Over the years, the level
of corruption defined in this way declined markedly and the ICACs approach changed
with it. After 2005, as an alternative to prosecuting under the Prevention of Bribery
Ordinance,109 some prosecutions were based on the charge of misconduct in public
office, a vaguely-worded common law offence which was not restricted to accepting an
advantage and could cover other conflicts of interest. The ICACs training programmes
have traditionally been aimed at corruption prevention but, with declining complaints
and corruption prosecutions and the consequent difficulty of convincing departments
heads that there is a corruption problem, the focus has increasingly shifted to top-down
integrity management programmes. The ICAC and the Civil Service Bureau work with
department heads, who appoint a directorate level civil servant in each department as
an ethics officer with responsibility for devising an annual integrity management plan.
While corruption prevention and the definition of what it means to accept an advantage
remain important in ICAC programmes, training increasingly involves other conflicts of
interest.110 In addition, once the civil service code is promulgated, it will be necessary
for the Civil Service Bureau to explain through training what those values contained in
the code mean for civil servants in practice.

The vast majority of training programmes in the Hong Kong government are
competency-based. But the increase in the number of programmes that relate to the
inculcation and transmission of core values suggests that there has been some move
away from the notion that all that civil servants need are the skills required to perform
a job effectively. Rather than a greater interchange of personnel with the private sector,
which is central to new public management, the government is still in practice committed
to the idea that most civil servants should have a career for life. If that is so, then the
development of public service ethos is an important supplement to the acquisition of
particular skills.
Discipline and Conduct

Discipline and conduct encompass many different aspects of the standards and behaviour
of civil servants, ranging from positive attempts to motivate personnel and encourage
greater productivity to the penalties applied for breach of the civil service regulations
and gross misconduct. Discipline in the civil service under the colonial government
was covered under the Letters Patent and the Colonial Regulations (as distinct from
the Civil Service Regulations) which lapsed at the handover. After 1997, the Basic Law
(Article 48(7)) empowered the Chief Executive to take disciplinary action against civil
servants and The Public Service (Administration) Order further expanded upon those
powers, specifying the procedures to be followed when a civil servant is charged with
an offence warranting dismissal, suspension or compulsory retirement.111 Section 10,
for example, permits the Chief Executive to summarily dismiss an officer who is absent
from duty without leave for more than fourteen days and who cannot be traced or fails
to give a reasonable excuse for his or her absence. Further provisions, specifying the
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procedures to be followed in a disciplinary investigation and the punishments for those

convicted, are laid down in the Public Service (Disciplinary) Regulation, a regulation
made under the authority of the Order. For the period between 2000 and 2007, 1640
civil servants were disciplined under The Public Service (Administration) Order and
346 were dismissed.112

The Civil Service Bureau is central to the disciplinary process because it administers
the Civil Service Regulations which are binding on all civil servants. The regulations
cover such matters as conditions of service, standards of conduct and behaviour which
may compromise the integrity of the service.113 Since 2001, stemming from the proposals
for civil service reform, there has been a Secretariat for Civil Service Discipline within
the Civil Service Bureau which has a wide-ranging brief including the processing of
all disciplinary cases, advising departments on investigations, presenting evidence
and witnesses, liaising with departments on procedures, identifying areas which are
vulnerable to misconduct and improving staff management systems.114 As a result of
the reforms, departments were expected to play an increasing role in resolving cases of
minor infractions of the rules. In November 2002, they were given responsibility for all
disciplinary cases concerning civil servants on salaries up to the middle ranges of the
Master Pay Scale. It has been estimated that some 300 departmental and general grades
officers spend at least some of their time on disciplinary matters.115

The phrase bringing the service into disrepute occurs repeatedly throughout
the Civil Service Regulations which go into some detail about soliciting or accepting
advantages, entertainment, and investments which an officer must report within two
months of his first appointment and every two years after reaching the directorate
rank.116 These provisions are clearly aimed at preventing corruption. They are reinforced
by the Prevention of Bribery Ordinance which makes it an offence to have assets
disproportionate to ones income without a satisfactory explanation, a provision which
was aimed at securing the conviction of corrupt police officers in the 1970s. The ICAC,
consequently, plays an important role in maintaining standards of integrity in the public
service and monitoring the level of corruption in the civil service. Reports from the
public alleging corruption in the service have been declining gradually over the years
and dropped sharply between 2003 and 2007 when the number fell from 1541 to 975,
about one-third of which were concerned with the Police Force.117 The number of
prosecutions for alleged offences over the same period dropped from 50 to 25, of whom
13 were convicted.118 The ICAC also has the power to refer cases of misconduct to the
Secretary of the Civil Service or to bureaus and departments for disciplinary action; in
2007, 123 such cases were referred, a fall from the 234 referred in 2003.119

The Public Service Commission (PSC) also has a role in the disciplinary process,
advising on penalties that should apply to virtually all civil servants and on the principles
that should guide the process. Its stated aim is to ensure consistency in decision-making,
fairness, and a speedy resolution to cases.120 In 2007, 91 cases were referred by the
Civil Service Bureau to the PSC for advice, of which 84 concerned officers in the lower
ranks.121 In eight cases, the Commission recommended dismissal from the service and a
further twelve civil servants were compulsorily retired, all of whom were below point
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33 on the Master Pay Scale.122 Most misconduct cases warranting dismissal relate to
unauthorised absence from work while those dismissed for criminal offences have mostly
been found guilty of Prevention of Bribery Ordinance offences, attempts to defraud, or
theft.123 For more minor misdemeanours, offenders receive reprimands, warnings and
fines.

The Hong Kong civil service has a high level of integrity and disciplinary cases
are comparatively small considering the size of the service. Why, then, are so much
resources spent on ensuring compliance with the rules? First, the civil service is still a
traditional bureaucracy in which rules are important for the maintenance of the system
and the hierarchy. Second, there is the spectre of past corrupt practices and the intent to
ensure that they should never be allowed to emerge again. Third, there has been political
pressure on the government to improve its monitoring and disciplinary mechanisms. This
was particularly important at the time when the reform proposals were being considered
after some cases of shirking and poor performance were widely publicised.124 The reforms
introduced since then have worked well and have produced a speedier process without
compromising the principle of a fair hearing. But there is still a need for more simplified
civil service regulations that can easily be understood and which the departments can
administer without too much debate with the Bureau over their meaning.

Although changes to the disciplinary procedures represent one area where civil
service reform has been successful, there are other areas of conduct which remain
relatively poorly regulated and lacking in transparency. Several high-profile cases
have put pressure on the government to tighten its regulations. In 1996, the Director
of Immigration, Leung Ming-yin, was compulsorily retired from the civil service. A
Legislative Council Select Committee established that Leung had been investigated by
the ICAC but had been cleared and that the formal reasons for his compulsory retirement
were that he had violated civil service regulations and that the government had lost
confidence in his integrity.125 The government claimed that Leung had breached the
terms of the Housing Loan Scheme, had not declared the full details of his investments,
and had entered into a business relationship with a Legislative Councillor which might
have resulted in a conflict of interest. The substantive charge against Leung was that he
had engaged in conduct unbecoming of a senior civil servant and raised the issue of the
penalties for non-compliance with civil service regulations. The case also illustrates the
range of concerns that the government might have about the integrity of a civil servant
for it raised questions about loyalty, assets in excess of income, and the point at which
civil service regulations might require dismissals or compulsory retirements.

In the post-handover period, two other cases concerned with the post-retirement
employment of senior civil servants also caused public concern. Elaine Chung, who
had served as Director of Urban Services and Deputy Director of Housing, was given
permission to take up a position with the Hong Kong Ferry Company, a company
associated with the Henderson Land Development Company. Henderson was bidding
for multi-million dollar contracts for the governments West Kowloon Cultural District
project. In September 2004, the Secretary for the Civil Service wrote to Chung asking her
to clarify what role she had in Hendersons bid for the contracts and, two months later,
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specifically prohibited her from participating in any aspect of the bid.126 The Secretary
was clearly concerned that Chung was engaging in inappropriate lobbying. When the
matter was raised in the Legislative Council, Chung defended her activities vigorously.
She contended that there was no conflict of interest, noting that it was five years since
she had been involved in cultural activities which more than satisfied the sanitisation
period and that there had been no transfer of benefits because she had not made any
decisions on projects involving either the Hong Kong Ferry Company or Henderson
during her time in government.127 In March 2005, the Civil Service Bureau conceded
that Chung had not been involved in a conflict of interest but warned her that what she
had been doing fell outside the scope of approved work.

In August 2008, a former Director of Housing, Leung Chin-man, was alleged to
have been involved in a conflict of interest over a property development undertaken by
a company which he had subsequently been given permission to join. Although Leung
had served the two-year sanitisation period, he had apparently not informed the Civil
Service Bureau in his application of the potential conflict. In the face of public pressure,
Leung resigned from the property development company and the Chief Executive set up
a committee to examine once more the rules on post-retirement employment.128 Policy
had already been revised following the Chung case. However, the original strict rules
which the Legislative Council had called for were moderated by pressure from some
civil service staff associations who saw tighter regulations as a restriction on their future
right to work.

It is questionable whether tighter regulations can resolve this kind of problem. It
is generally agreed that the best means of avoiding potential conflicts of interest is to
ensure that civil servants have an appropriate set of values which will enable them to
steer clear of situations where their integrity is compromised and where the reputation
of the civil service may be damaged. There have been various attempts to enhance the
public service ethos in this way. In 1998, the Office of the Ombudsman issued guidelines
on ethical behaviour for civil servants which included a range of questions that sought
to enhance their sense of responsibility and accountability, to improve their decisionmaking in the public interest, and to promote their honesty, integrity, professionalism,
courtesy, loyalty and dedication, economy and environmental consciousness.129 In the
same year, the then Chief Secretary, Anson Chan, laid out six core values for the civil
service which, with slight modification, have remained in place. They are: commitment
to the rule of law; honesty and integrity above private interests; accountability and
openness in decision-making; political neutrality; impartiality in the execution of public
functions; and dedication and diligence in serving the community.130 It is fair to say that
most civil servants appear to show a high level of commitment to those values. Until
the ICACs integrity management programmes were introduced in 2006, however, core
values tended to be acquired more by osmosis than by training. The political appointment
of Deputy Directors and political assistants did raise questions about how they would
interact with the civil service. It was determined that they would not have a direct line
of command over the Permanent Secretary who would continue to report directly to
the Director of Bureau. Nonetheless, concerns about the status of the new appointees
ch.05(p.95-118).indd 116
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provided a stimulus for the drafting of a civil service code which may be expected to
provide more detail on how the government sees the way in which the core values should
affect the behaviour of civil servants.131

Attempts to reform the personnel system have had, at best, mixed success. The
original vision of a civil service along new public management lines in which there would
be many more appointments on contracts, where pay would be linked to performance,
and where appraisals would be conducted rigorously and would enable management
to identify and promote the competent and coach or punish under-performers, has not
been realised. The reform of the terms of employment was primarily aimed at new
recruits and created morale problems when similar jobs were being performed by civil
servants on very different conditions of service, violating the principle of equal pay
for equal work. Salary levels were reduced in 2003 and 2004 but the reform to the
pay determination system proved more elusive. Minor adjustments were made to the
methodology but the system originally created in 1979 is essentially still in place. There
has been more monitoring of the performance appraisal system and more attempts
to determine necessary competencies at the departmental level but the fundamental
problems of the central tendency and of the relationship between performance and
the grading system remain. The principal success of the reform process has been in
streamlining the disciplinary process. Even here, however, it might be argued that the
reform worked because it was consistent with the existing administrative culture of a
traditional bureaucracy, not because a new idea had won acceptance.

What explains the failure of the reform process? When it was introduced in 1999,
the conditions seemed suitable for change. The Chief Executive was anxious to introduce
more private sector practices into the civil service. Civil servants were seen to be overprivileged at a time when the economy was deteriorating and unemployment was rising.
There had been some major administrative mistakes and scandals and it seemed an
appropriate time for changes to the conditions of service of civil servants and the way
in which they were managed within the civil service. The types of reforms that were
proposed potentially implied a major re-structuring of the service along new public
management lines. In other countries, it has been possible to make that transformation.
Why was it not possible in Hong Kong?

First, economic conditions improved and the cost and performance of the civil
service became less of a public issue. Second, Donald Tsang, schooled in the traditional
civil service, was seemingly less committed to the notion of introducing major reforms
than his predecessor had been. Reforms may be disruptive and in his first two-year
term Tsang was principally interested in maintaining stability after the turbulence of
the Tung era. There were still attempts to involve the private sector and the Efficiency
Unit continued to draw attention to practices that might be usefully adopted. But the
changes were essentially within the framework of a traditional bureaucracy rather than
the radical changes that the 1999 proposals had anticipated. Finally, the civil service
itself was an obstacle to reform. The staff associations were suspicious of attempts to
introduce changes to the terms of service and to the pay determination system, especially
because, in their view, due process had been ignored in the reduction of civil service
ch.05(p.95-118).indd 117
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salaries. In a wider sense, the civil service is a political organisation with vested interests
which any government attempting reform has to ensure is supportive of change. With
the staff associations opposed to the reforms and the political leadership in disarray,
the reforms foundered, and, by default, personnel policies largely returned to their
traditional form.
ch.05(p.95-118).indd 118
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The Public Sector Beyond the Civil Service
lthough public sector reform in Hong Kong has focused principally on reducing the
size of the civil service, on the pay determination process and on cutting salaries,
senior officials have frequently expressed the view that the public sector can benefit
from greater entrepreneurialism, more private sector practices in the workplace, and
more devolution of government functions to statutory bodies or subvented organisations.
These are not new ideas. During the colonial administration, social policy outputs were
initially mainly provided by churches and by charitable and subvented organisations.
When the government became more involved in social policy, it created large statutory
organisations, the Housing Authority, the Hospital Authority and the Airport Authority,
to deliver services. The post-1997 administrations continuing commitment to small
government has also been based on the belief that the private sector can undertake many
public functions in more efficient ways than the civil service. But the measures that have
actually been taken have been relatively modest. There has not been a substantial increase
in the number of public enterprises, in the corporatisation of government activities, or
the sale of state assets. There are cross-cutting values at work. While the government
would like to devolve some of its responsibilities, it has in practice strengthened its
grip on public sector organisations because it wants to retain control of service delivery
and to ensure that their strategies are consistent with central policy objectives. Many
senior civil servants also believe that statutory bodies and subvented bodies are not run
as efficiently as they should be.

An equally important reason why greater privatisation and corporatisation of
government activities has not occurred is because of political opposition. However
much Tung Chee-hwa might have wanted to privatise or to devolve more government
functions, there were many other fronts on which his administration was battling to
win or retain support. To introduce further controversial measures would have aroused
the ire of the unions, members of the Legislative Council and perhaps civil servants.
For similar reasons, Donald Tsang declined to take on major new initiatives in his first
term for fear of creating more political turbulence. Aside from the political context,
there have also been specific objections to proposals to privatise or corporatise.
The Chinese government tends to favour centralised government and was opposed
ch.06(p.119-145).indd 119
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to both the corporatisation of government broadcasting and the privatisation of the

Airport Authority.1 Opposition to privatisation and corporatisation has also come from
politicians and academic commentators who have questioned whether such measures
are in fact more efficient and cost-effective than having services provided directly by
the government. There has also been criticism of the lack of accountability of statutory
bodies, public outcries over the large salaries paid to their senior executives, fears over
job losses in the civil service, and concern over the seemingly inevitable increase in
fees for public services that were once free or relatively inexpensive.

Many of these concerns were raised in a debate in the Legislative Council in 1999
on the privatisation of government departments. Lee Cheuk-yan, a leading figure in
the Hong Kong Confederation of Trade Unions, who introduced a motion urging the
government not to blindly believe in the effectiveness of privatisation,2 said that he
opposed
sacrificing the interests of the whole society for the sake of creating more
business opportunities. I oppose the blind belief in privatisation while
ignoring the five big evils accompanying the privatisation of government
services, namely a drop in service quality; heavier burden for the people
as a result of loss of control on the monitoring of charges; retrogression in
democracy due to dwindling accountability; adverse effects on the overall
effectiveness in society arising from piecemeal implementation of government
policies; and the smashing of the rice bowls of staff that might lead to
unemployment, social unrest and suppressed wages.3
Against the five big evils, the then Financial Secretary, Donald Tsang, posited what
perhaps might be considered as the four virtues. Corporatisation, he said, had distinct
commercial advantages. The service providers could develop a customer-oriented culture.
The cost-effectiveness of services could be more accurately assessed. Corporations
would no longer be subject to government rules and could adjust to changing market
conditions. Private sector organisations could take part in offering services previously
provided by government.4 If changes were to be made, Tsang noted that staff would
be consulted, redundancies would be avoided as far as possible, service quality would
be enhanced, and the level of charges would be monitored or included in the operating
agreement with the newly-created corporatised body.5

Which position does the evidence support? Is Lee Cheuk-yans criticism that statutory
and privatised bodies are less accountable than the traditional civil service justified? Is
quality compromised and are charges raised if services are privatised or delivered by
statutory bodies? Are the chief executives and directors of public corporations overpaid?
In this chapter, we examine, first, the evolution of the governments relationship with
service providers outside the traditional bureaucracy; second, the legal status and funding
of those providers; third, the control and accountability of non-government organisations;
and, finally, issues arising from their operations, particularly the payment and recruitment
of senior executives.
ch.06(p.119-145).indd 120
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The Public Sector Beyond the Civil Service 121
The Evolution of Governments Relationship with Service

Providers
The Hong Kong government has a long history of encouraging private organisations to
provide public services. Before the Second World War, education, health and welfare
were largely in the hands of not-for-profit organisations, mainly churches, missionaries
and Chinese charitable organisations, such as the Tung Wah and the Po Leung Kuk.6
Governments involvement in social policy was generally restricted to regulating
education and healthcare, making occasional benevolent donations and grants of land
to schools and hospitals, and providing very limited support for the destitute and for
refugees. There were two major reasons why the colonial government was strongly
disinclined to develop extensive, publicly funded, social policy programmes. First, and
most important, the prevailing philosophy was that government should be kept small and
that its functions should be limited. Business representatives in the Legislative Council
believed that any social policy programmes could only be funded by increased taxes
which they fiercely opposed. Secondly, there was pressure from the British government
to balance the budget and there was consequently little slack for expenditure on social
policy. Instead, the government concentrated on monitoring social policy providers to
prevent the schools from becoming hot beds of political dissent or health practices from
deteriorating to the point where epidemics broke out.

After the Second World War, regulatory social policies of this kind could no longer
adequately address the colonys problems. The influx of refugees from China created
major housing problems, led to communist activities in schools and labour unions, and
aggravated economic difficulties. The government began to re-consider its relationship
with service providers. In 1947, it set up a Social Welfare Office and supported the
creation of the Hong Kong Council of Social Service, which was incorporated in 1951
and was to serve as a mediator between the government and the welfare providers.
Initially, there was little funding support from government; its view of welfare was that
recipients should be helped to return to the workforce as soon as possible. In two other
areas, the government was more interventionist. The Shek Kip Mei fire in December
1953 led to government resumption of land occupied by squatters and the beginnings
of a public housing programme that was eventually to provide accommodation for
nearly half the population.7 In education, fear of communist activities in schools led to
a greatly expanded public primary education programme.8 By the 1960s, the government
had become a much larger provider of social policy, but it did so grudgingly under the
pressure of social and political forces that it could not entirely control.

After the riots of 19661967, there was a sea change in the governments attitude.
Policy outputs more housing, better education, better health facilities, more social
welfare provided the underpinnings for the administrations attempt to bolster
its legitimacy. Ancillary changes to devolve responsibilities to government-owned
public corporations occurred at the same time. In 1973, the government introduced
a new Housing Authority Ordinance which established the Housing Authority as a
public corporation, with responsibility for the construction and management of public
ch.06(p.119-145).indd 121
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housing estates. The government did not see this as a new form of organisation but
rather as a consolidation into a single body of the powers and functions of the existing
Housing Authority, the Housing Board, the Urban Council and the Commissioner for
Resettlement.9 The Housing Department, which was to serve as the executive arm of
the Authority, remained part of the civil service.

In 1975, the government believed that it was breaking new ground when it
established the Mass Transit Railway Corporation (MTRC), as a wholly owned public
corporation, to build and then run Hong Kongs underground railway system.10 The
principal reason for setting up the MTRC as a public corporation lay in its commercial
possibilities. If running a railway was seen as a commercial activity, it followed that
Hong Kongs other railway, the Kowloon-Canton Railway Corporation (KCRC),
which had been a government department since 1910, should also be set up as a
public corporation. An ordinance to make this change was passed by the Legislative
Council in 1982. Measures were also introduced to provide for government regulation
of the electricity companies and the bus companies which operated under schemes of
control which capped their charges and required that certain performance standards
should be met.11

The governments policy of increasing social policy outputs, such as housing and
education, had considerable political advantages.12 It enabled the government to claim
performance legitimacy, the notion that it deserved to rule because it was an efficient
and effective government and provided the kinds of collective goods that people wanted.
By the 1980s, this justification for colonial rule was becoming less persuasive. The
expansion of the education system produced more graduates who sought to influence
policy directly. Negotiations on the future of the territory politicised the entire population.
Popular demands were now not simply for more housing, education and social welfare
but for better quality housing, education and social welfare. Building more housing
estates, new towns, hospitals and schools did not in itself satisfy an increasingly critical
public.13 The growing demands of an ageing population also meant that healthcare and
welfare would both become more expensive. The governments response was to look
more favourably on other means of providing those services.

In 1985, the consultants, W.D. Scott and Company, were appointed to
investigate more efficient and cost-effective ways of delivering health services. Their
recommendation was to create a single authority because they believed that, unless
such action was taken, the current system of medical services delivery will become
increasinglycostly to maintain and less able to cope with the demands placed upon
it.14 When the Hospital Authority came into existence in 1990, the model adopted,
after some years of contentious debate, was similar in legal form to that of the Housing
Authority.15 The Authority was set up with overall responsibility for the management
of public hospitals but public health remained within government under departmental
control. In 1988, the government also made changes to its original arrangements with
the Housing Authority, allowing the Authority greater financial flexibility which was
intended to enable it to implement its long-term housing strategy more effectively.16
ch.06(p.119-145).indd 122
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There were good political reasons for strengthening the powers of the authorities.
The growing number of complaints about the quality of housing, healthcare, transport,
education and welfare added to the pressures on government. Demands for more
representative political institutions in the territory, fears about the consequences of the
transition to Chinese sovereignty, and eventually the Tiananmen Square massacre, all
meant declining legitimacy for the government. Anything that could be introduced to
deflect complaints about social policy to organisations outside government was clearly
politically desirable. In moving operational, but not policy, responsibilities for hospitals
and housing more distinctly beyond the governments orbit, the burden of responding to
complaints was removed from what was becoming an overloaded system. In addition,
the government also took other measures to reduce criticism of its own operations.
The Broadcasting Authority was set up as a statutory body in 1987 and had, among its
responsibilities, answering complaints about radio and television. To deal with complaints
more broadly, an ombudsman was established in 1989, predictably receiving the largest
number of complaints about housing.

In the 1990s, the government began to devolve more of its responsibilities to
statutory bodies and to charge for more of its services. These measures were driven by
both commercial considerations and wider political concerns. One of the fears expressed
during the transitional period was that a centralised bureaucracy with the kinds of
autocratic powers held by the colonial regime could be used to suppress civil liberties
after 1997. There was consequently some support in government for spreading more of
the public sector beyond the traditional civil service. The further expansion of the civil
service had, in any event, been halted by a freeze on recruitment which began to take
effect in the early 1990s. In line with the idea of devolving more power to statutory
bodies, the powers of the ombudsman were strengthened, an Equal Opportunities
Commission was established and an attempt was made to corporatise Radio Television
Hong Kong although this was eventually abandoned in the face of opposition from
the Chinese government.17 In similar vein, although without involving the creation of
statutory bodies, the government passed legislation to protect the privacy of individual
data and to provide access to information.

On the commercial side, the government began to experiment with changing the
way its departments did business. A Trading Funds Ordinance was passed in 1993
which enabled the Financial Secretary to allow government departments to operate in a
commercial manner provided that they were efficient and effective and had the capacity
to meet the expenses incurred in the provision of the government service.18 Six trading
funds were eventually established: the Lands Registry, the Companies Registry, the
Office of the Telecommunication Authority, the Post Office, Electrical and Mechanical
Services and Sewage Services. In 1998, the Sewage Services Fund was terminated after
members of Legislative Council criticised it for raising charges.19 The Funds were not
usually given the liberty to set their own prices and were not faced with any private
sector competition. In consequence, they continued to operate as monopolies and did
not entirely live up to the expectations of those who wanted to see more commercial
activity in government.20 Another major commercial venture was the building of the new
ch.06(p.119-145).indd 123
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airport at Chep Lap Kok. The government established an Airport Authority, drafting the
legislation along similar lines to that of the MTRC.21 This raised concerns that there
would be a lack of government control over the new public corporation, a fear that
was reiterated after the disastrous opening of the airport in 1998 when the Legislative
Councils investigation laid some of the blame at the door of inadequate monitoring of
the authority by senior officials.22

The Tung administration proved even more enthusiastic about privatisation,
corporatisation and private sector involvement in public affairs than its colonial
predecessor. In 2001, the Financial Secretary told government departments that:
Consideration should always be given to involving the private sector in
the provision of new services. And opportunities to improve private sector
involvement should be examined proactively.23
The Asian financial crisis and the subsequent recession increased the pressure on the
government to do more for business and to utilise its services to decrease the costs of
civil service expenditure. There were proposals to contract out welfare services and
water supplies and to privatise public corporations of which the MTRC was to be the
first example. In his 2003 budget, the Financial Secretary announced that the government
would sell $112 billion in assets over the following five years.24 In the following year,
his successor noted that about $21 billion had been realised through selling housing
loans to the Hong Kong Mortgage Corporation and the securitisation of revenues from
government toll tunnels and bridges.25 Future candidates for privatisation were thought
to include 2549% of the Airport Authority, car parking spaces and shopping centres
owned by the Housing Authority, the remaining shares in the MTRC, the Post Office,
the KCRC, the Water Services Department, the Environmental Protection Department
and the governments holding in Disneyland.26

By 2008, the only project that had been fully implemented was the sale of the
Housing Authoritys car parking and shopping centres and even that was delayed by
a court case brought by activists opposed to the move.27 The KCRC was merged with
the MTRC in December 2007 but not without opposition from the democratic parties
who voted against the merger bill and from minority shareholders in the MTRC who
were critical of the merger conditions which reduced the corporations autonomy to
decide on fares.28 There were many different reasons for the failure to divest other
government assets. The Chinese government was not supportive of the privatisation of
the Airport Authority. There would have been considerable political opposition to the
privatisation of government departments. And the governments venture with the Walt
Disney Company had yet to make a profit. The governments attitude to privatisation
also changed. It had less need to sell assets once its fiscal situation began to improve
and Tsang was less willing than his predecessor to court controversy by doing so.
Rather than divesting assets, the government seemed more interested in regulating the
commercial sector through the introduction of a competition law and by re-writing the
Companies Ordinance.29
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The Legal Status and Funding of Service Providers

The bewildering range of relationships that exist between central government and the
non-government public sector organisations is probably a product of the ad hoc way
in which those organisations have developed. To understand how this affects wider
issues of accountability, there is a need to try to classify these relationships. By nongovernment public sector organisations, we mean those bodies which perform public
service functions but which, either because of their legal status or primary roles as
private sector organisations, enjoy varying degrees of independence and autonomy
from the central government. In June 2005, the government calculated that there were
509 advisory and statutory bodies (see Table 6.1).30 They range in type from executive
agencies to statutory corporations to some private companies. They also include what
is sometimes regarded as the only type of non-government organisation, the voluntary
welfare organisation involved in community service. They do not include such
organisations as political parties or civic pressure groups which are not usually engaged
in a direct relationship with government over service provision. Because many advisory
and statutory bodies are involved in activities that are matters of continuing public
concern, such as transport, housing and healthcare, there is a need to ensure that they
are accountable to some institutions within the political system and that their actions
are consistent with community goals and other government policies.
Table 6.1 Number of Advisory and Statutory Bodies, June 2005
Type
Advisory boards and committees

Non-departmental public bodies
Regulatory boards and bodies
Appeal boards
Advisory and management boards of trusts/funds
Public corporations
Miscellaneous boards and committees
Total
Statutory
48
14
48
54
44
5
16
229
Non-statutory
239
1
0
5
30
0
5
280
Total
287
15
48
59
74
5
21
509
Source: Home Affairs Bureau, Legislative Council Panel on Home Affairs: Review of Advisory
and Statutory Bodies: Interim Report No. 14 Review of the Classification System of Advisory and
Statutory Bodies in the Public Sector (Hong Kong: The Bureau, 2005), Annex 1.
The governments classification of the advisory and statutory bodies shown in Table 6.1
is not entirely satisfactory because it includes the category non-departmental public
bodies which seems to be little more than a catchall for public bodies with financial
or organisational problems or with which the government has been in political conflict.
The classification which is used in this chapter instead relies on three variables which
seem to be particularly important:
ch.06(p.119-145).indd 125
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the extent to which the public sector organisation is funded by government;

the legal framework under which the public sector organisation has been established,
that is, whether the public body is established under statute or whether it has a less
formal relationship with the government; and
the extent to which specific circumstances influence attempts to ensure
accountability.
In this section, non-government public sector organisations are classified accordingly

by their legal status and their funding relationships with government; political and
accountability issues are considered in the next section of the chapter.

The non-government public sector organisations range from quite closely supervised
bodies, such as the executive agencies established by government under executive orders
or delegated legislation, to bodies such as the Hospital Authority, which have close
relations with government departments and policy-making bureaus, to public corporations
such as the MTRC which enjoy a much greater degree of independence. Between these
extremes, a number of organisations for example, voluntary welfare organisations, the
tertiary level educational institutions, the Trade Development Council, the Productivity
Commission and the Independent Commission Against Corruption (ICAC) receive
most, or all, of their funding from the public coffers and are held accountable, to a greater
or lesser extent, for the ways in which they use those funds. In addition, some of the
companies that operate monopolies or duopolies in areas of public interest, such as the
bus companies and the electricity companies, are subject to regulation under schemes
of control. Still other arrangements apply to property which the government owns but
chooses not to administer directly. For example, the government owns the Cross Harbour
Tunnel but has entered into a contract with a private company to manage it.31

Although there has been no coherent pattern to the Hong Kong governments
efforts to oversee these many different kinds of organisation, they do fall into certain
categories in terms of their funding arrangements and legal status. Table 6.2 presents
a classification based on these variables. The relationship between government and
the non-government organisations should nonetheless be conceived of as dynamic and
subject to change over comparatively short periods of time. For example, the government
can legislate changes in the status of non-government organisations, as it did with the
decision to merge the KCRC with the MTRC and with the unsuccessful proposal to
amend the Airport Authority Ordinance to allow for partial privatisation.32 There may
also be changes of function which might result in more autonomy from government.
The Housing Authority, for example, now has a role as a housing facilitator rather than
a provider, and has been brought under direct government control.33 Any organisations
position within the classification, therefore, is fluid and depends on the prevailing
circumstances and governments response to them. A further difficulty in classifying
non-government organisations is that the legal status of non-government organisations is
not wholly exclusive. Thus, a statutory body (that is, one established under an ordinance)
can also be a charitable trust for income tax purposes and a public corporation. The
classification, consequently, is based on a combination of the organisations funding
relationship with government as well as its legal status.
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With these caveats in mind, we can examine specific types of non-government

organisations and the reasons why government has established a particular kind of
relationship with them.
Core Government Functions

Core government functions are provided by the bureaus and departments which are
staffed by civil servants. The legal authority to establish such bureaus and departments
was derived from the Letters Patent and the Royal Instructions under colonial rule
and under the Basic Law after 1997. The authority to organise administrative affairs
is delegated to the Hong Kong government under Article 16 of the Basic Law which
states that the HKSAR shall be vested with executive power and that it may, on its
own, conduct the administrative affairs of the Region. Article 60 further provides that a
Department of Administration, a Department of Finance, a Department of Justice and
various bureaus, divisions and commissions shall be established in the Government of
the Hong Kong Special Administrative Region. Structural changes in government, such
as the introduction of the Principal Officials Accountability System, may involve the
presentation of the proposals to the Legislative Council and may require the approval
of the Council if new positions are introduced. But the authority to make changes to
the structure of government rests with the executive.

The funding of bureaus and departments usually comes from revenue raised by the
government. Some departments may have income from their activities which then
may trigger a debate about whether they should be operating commercially as trading
funds but most are reliant on the funding granted by the Legislative Council when it
approves the budget estimates. This enables the Council, through its Finance Committee
and the Panel on Public Service and other more specialised panels, to keep under review
the ways in which the government spends its money and, particularly, whether requests
for new positions are justified.
Quasi-Government Organisations
Quasi-government organisations may be created in a number of different ways: by
executive decree; under an ordinance passed by the Legislative Council; or by their
own private constitution under which they may provide functions which are seen to be
in the public interest and for which they may receive government funding. We consider
examples of each of these types of quasi-government organisations.
1. Executive body
In purely legal terms, the simplest way to create a relatively autonomous organisation to
perform specific functions is by government decree. This may be done either through an
executive order or under delegated legislation. The Hong Kong Monetary Authority, for
example, which serves as the equivalent of a Central Bank and administers the Banking
Ordinance and the governments investments in the stock market, was, prior to 1993, the
Monetary Affairs Branch of the Hong Kong government. It was not established under its
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Table 6.2 The Organisation of the Public Sector
Type
Legal Foundation
A. Core Government Organisations
Funding
Examples
1. Policy Bureau Recognised under

Fully funded by

the Basic Law but
Government

established by an

executive order or

decision
Health and Welfare;

Environmental
Hygiene and Food;
Constitutional Affairs
2. Government Recognised under

Department
the Basic Law but

established by an

executive order or

decision

Education Department;
Social Welfare
Department. The Post
Office operates as a
Trading Fund
B. Quasi-government Organisations
Mostly fully-funded
by government.
Some departments
providing commercial
services may operate
as Trading Funds
3. Executive body Established by

Usually fully funded

executive order or
by government

directive

Hong Kong Monetary

Authority;
University Grants
Committee; Womens
Commission
4. Not-for-
Established by
Fully or nearly fully
profit subvented ordinance
subvented by
statutory body
government

Independent
Commission against
Corruption; Hong
Kong Trade
Development Council
5. Not-for-
profit non-
subvented body
Hong Kong Council

of Academic
Accreditation
May or may not be

established by
ordinance
6. Partially
Established by an
commercial entity ordinance as an
underwritten by incorporated
government
statutory body

Organization charges
fees and is self-
financing
May charge fees or

Hospital Authority;
rents or sell property Airport Authority
but may be dependent
on government
backing for capital
expenditure
7. Commercially Established by an
Wholly self-financing
viable entity
ordinance as an
but government may

incorporated
forego dividends to

statutory body
support further capital

expenditure

Kowloon-Canton
Railway Corporation.
(After its merger with
the MTRC in 2007,
the KCRC remained a
statutory corporation
but with very few
staff)
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8. Company
Established by its
in which
own constitution,
government holds pursuant to the
all or a majority Companies
of shares
Ordinance and

sometimes also

subject to a special

ordinance
Wholly self-financing Mass Transit Railway

but government may Corporation
waive or defer
dividends in the
interest of further
capital expenditure
9. Not-for-
profit private
(voluntary)
welfare
organization

Established by its
own constitution or
deed of trust
pursuant to an
ordinance such as
the Societies
Ordinance and
sometimes
incorporated under
an ordinance
Regularly or partially
subvented by
government grants
with supplementation
from organizations
such as the
Community Chest
and the Jockey Club
Hong Kong Aids

Foundation; Hong
Kong Council on
Smoking and Health;
Community Advisory
Drug Council; Po
Leung Kuk
10. Publicly-
Established by its
listed company own constitution,
or private
pursuant to the
company with
Companies
public functions Ordinance,

operating under a

contract, franchise,

build-own-operate

agreement, or the

like with

government

Company contracts
with government to
manage a public
function at a profit to
the company but with
controls over prices
and standards.
Government may also
legislate or issue
directives in regard
to franchise or
build-own-operate
arrangements
Bus companies; tunnel

companies;
outsourcing
information
technology
C. Private Organizations with Public Functions
Sources: Adapted from Ian Scott, Organisations in the Public Sector in Hong Kong: Core
Government, Quasi-Government and Private Bodies with Public Functions, Public Organisation
Review 3(3), (2003), 250251. This table is based on the legislation and annual reports of the
government departments and organisations mentioned in this chapter. I am grateful to Ian Thynne
for his help in clarifying many of these relationships and for his suggestions on the wording of
the categories.
ch.06(p.119-145).indd 129
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own ordinance but its functions are clearly laid down in the Banking Ordinance.34 The
relationship between the Authority and the government is very close.35 The government
funds the authority, the Financial Secretary retains the chair of its major committees,
and many of its senior officials are former civil servants.

Fully funding an executive agency is quite common in Hong Kong but there is
no reason why such agencies should not be set up as self-financing bodies. This will
depend on their ability to generate revenue and the government may decide that it needs
to ensure the viability of the organisation by providing for its entire budget. Despite this
relationship of dependency and the ease with these executive agencies can be created,
there is no guarantee that friction with the government will be avoided. Specific funding
and political issues may arise and the relationship between the responsible official in the
government and the head of the agency can be a source of conflict if powers and duties
are not carefully defined. In addition, the government, in setting up such agencies, does
not always provide much legislative oversight into their work. If relationships between
the statutory body and the Legislative Council do develop, it may be because both sides
see value in communication and expand their contact informally to the point where they
become conventions. The Monetary Authority, for example, has worked hard to keep
legislative committees apprised of what it is doing; the Authoritys Chief Executive
meets with the Legislative Council Panel on Financial Affairs three times a year and
other members of the Authority appear before the Panel if required.36
2. Not-for-profit subvented statutory body
The difference between an executive agency and a subvented statutory body is that
the latter is established under ordinance. The public body has been given powers and
duties which may be the subject of scrutiny by the Legislative Council. In addition, for
the government to propose such an arrangement there must be some function that it
believes can be performed better by an independent or autonomous agency. The ICAC
is a classic example of this type of organisation. Its principal purpose is to prevent
corruption and pursue and prosecute those who are corrupt which cannot easily be
undertaken by the government; if it were, there would be no certainty that cases would
be dealt with independently and fairly. The nature of its function means that the ICAC
could scarcely be expected to raise money to fund its own activities. It is, therefore,
necessarily a fully subvented statutory body whose officers are employed on contract,
often on secondment from the civil service itself.
3. Not-for-profit non-subvented body
Unlike the ICAC, there are some organisations, which may or may not be established
under ordinance, that perform public functions but which are permitted to charge for their
services. Since the function is in the public interest, the organisation is not allowed to
charge fees with the intention of making a profit although it will seek to cover its costs.
The Hong Kong Council of Academic Accreditation which validates degrees and also
assesses non-Hong Kong degrees for government recruitment purposes is an example
of this type of organisation. The government pays the Council for its services.
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4. Partially-commercial entity underwritten by government
Some organisations have been set up outside the central government to better implement
policy without the constraints of normal bureaucratic practice. The Housing Authority
(until 2002), the Hospital Authority and the Airport Authority have several significant
features which they share in common. First, they were established as public corporations
under ordinances passed by the Legislative Council. This means that in some respects
they may act in a similar manner to private companies; they may sue and be sued, for
example. They may have other legal entitlements that private companies do not have;
they may be charitable trusts, for example, which would give them favourable income
tax benefits. Second, they have large capital expenditures which may be provided or
underwritten by government or may be financed from their own activities. By 2001,
for example, the Housing Authority had evolved to the point where it was financially
autonomous and had $20.8 billion available for investment.37 With the review of public
housing in 2002, however, and the decision to bring the Housing Authority back directly
under government control, its role was radically changed from bricks and mortar
provision of public housing to advising government on a housing strategy which would
encourage more private sector provision.38 Third, the Authorities have the capacity
to make money themselves through charging rent and selling flats, in the case of the
Housing Authority, and through charging fees in the case of the Hospital and Airport
Authorities. Fourth, they are each involved in the difficult task of establishing a proper
balance between the public need for the service and the economic cost of providing it.
For the Housing Authority, this is complicated further by the fact that there are private
developers who may view the Authority as unfair competition if it provided too many
flats at too low a rent or sold too many flats at what the developers regard as uneconomic
prices. The difficulty for the Authorities is that they are not purely commercial operations;
they provide services subsidised by government. While they have the ability to charge
economic prices, if they were to do so, the political cost to the government would be
unacceptable.
5. Commercially-viable public entity
Until 2007, when it was merged with the MTRC, the government did wholly own one
public enterprise which could charge the full economic price for its service and make
a profit. The Kowloon-Canton Railway Corporation (KCRC), which was then a public
corporation, made consistent profits although in some years the corporation claimed a
loss for tax purposes.39 The government as its only shareholder was entitled to dividends
from these profits but often waived the dividend to assist further capital expenditure.
6. Company in which government holds all or a majority of shares
Prior to 1999, the Mass Transit Railway Corporation (MTRC) was a public corporation
and had the same legal status as other public corporations such as the Housing, Hospital
and Airport Authorities and the KCRC. Since 1999, the MTRC has been a public
company, quoted on the Hong Kong Stock Exchange, in which the government has a
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majority (77%) stake. The decision to create a public company began a new phase in
the development of public sector bodies. The changed status of the MTRC raised issues
about the relationship between commercial practice and the public interest which had
previously been treated as an internal negotiating matter between the government and
the corporation. When the MTRC was created in 1975, the government stressed that
the corporation could only operate having regard to the reasonable requirements of
the public transport system of Hong Kong and that it was highly important that it
took into account the governments transport policies.40 The MTRC was permitted to
determine fare levels, the number of trains purchased, and the frequency of operations
but required government approval for its routes.41 The merger with the KCRC raised a
number of issues, not the least of which was the politically sensitive question of control
over fares. The government, which initiated the merger, expected that the synergies that
it would produce would actually reduce fares.42 To ensure that the merged company did
not use its dominant market position to raise fares unjustifiably, the government wanted to
ensure that there was an objective and transparent fare adjustment mechanism and that
the company would not engage in cut-throat competition with other transport providers.43
The government was clearly acting in the public interest. As a public company, however,
MTRC directors also have to consider minority shareholders interests as well as their
responsibility to explain company policies to the market.
Private Organisations with Public Functions

The government has permitted voluntary welfare organisations and the private sector
to provide necessary public functions, such as community care, electricity supplies and
bus services, while retaining some control over pricing and standards through funding
and licensing arrangements. The division between those functions that are directly
provided by the government and those that are supplied by welfare organisations or a
private company are often determined by historical circumstances. In the case of welfare,
the government has traditionally preferred services to be provided by non-government
organisations. In cases involving private companies taking on public functions, the
government has tended to be sympathetic if it believed that the service could be provided
more efficiently by the private sector. Occasionally, however, political considerations
have meant that the government has had to provide services which it would have probably
preferred to see delivered by the private companies. For example, for many years, water
was a political issue because much of the supply came from China and was subject to
negotiations over price and quantity. In 1994, Sewage Services were established as a
trading fund but concerns over increased charges eventually led the government to close
it down and return responsibility for water to departmental control.44 In other areas,
such as the supply of electricity and gas and in some aspects of transport provision, the
government has been less interested in playing a direct role.

Where there are multiple providers of services, the appropriate mix between
government, subvented bodies and the private sector is often an issue. There is a danger
of duplication, of varying quality for the same service, and of pricing differentials. The
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governments answer to these problems has been to try to introduce more uniformity
in standards through such management methods as schemes of control over the power
and bus companies, the school management system, and the Lump Sum Grant scheme
for welfare agencies or to permit an element of user-pays, as in the hospital system,
where private providers are entitled to charge higher fees than the Hospital Authority.
In some areas, such as school management and the Lump Sum Grant scheme, the
governments methods have caused considerable friction with providers. Achieving the
balance between different providers and between cost-effectiveness and an equitable
provision of services is difficult and requires constant adjustment and review to ensure
that the system works well.
1. Voluntary welfare organisations
Legally, voluntary welfare organisations are private bodies although most receive a high
percentage of their revenue from the government, the Community Chest or the Jockey
Club, or from more than one of these sources. In 2008, the Social Welfare Department
paid out $7.342 billion to 173 subvented agencies of which 162 came under the Lump
Sum Grant subvention mode.45 The Community Chest disbursed a further $138 million to
125 of its 143 member agencies and the Jockey Club made grants totalling almost $354
million to 54 community services groups.46 Most voluntary welfare agencies are members
of the peak organisation, the Hong Kong Council of Social Service, which negotiates
with government on their behalf, conducts research, and serves as a planning body for
the provision of services.47 In 2005, the government set up a Commission on Poverty,
chaired by the Financial Secretary, which proposed policies for poverty alleviation but
which was criticised for a lack of direction, for recommending policies that were already
in place, and for inefficacy in a time of rising income inequalities.48

The considerable extent to which voluntary agencies are subvented means that they
are highly dependent on government; one observer has described them as camouflaged
quasi-government agencies.49 Government directs their policies and attempts to ensure
that there is no overlap in the services provided. The introduction of a Lump Sum
Grant scheme in 1999 was designed to give them some discretion in spending their
subvention. Whether that outcome was achieved is questionable; government control
was probably strengthened by greater scrutiny of the funds provided for salaries (rather
than a replication of government salary scales) and by the inclusion of a representative
of the Social Welfare Department on the boards of the subvented voluntary agencies.
By 2008, there were signs that the government was prepared to relax some of these
control measures by establishing an independent review committee to advise on the way
in which the Lump Sum Grant scheme was working and how it might be improved.50

Subvented organisations may be incorporated under an ordinance. In some cases, the
government has chosen to recognise private welfare organisations by passing legislation
governing their operations through the Legislative Council. The reasons for recognition
may vary. In the case of the two charitable organisations, the Tung Wah and the Po Leung
Kuk, the original reasons for incorporating them under ordinance reflected governments
desire for greater control over their activities. In general, incorporation does imply a
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stronger relationship between the private organisations and government, but other than
a purely commercial relationship between government and a private company, it still
represents the loosest form of contact; the incorporated body is responsible for its own
funding although it may also hope to receive some government largesse.
2. Publicly-listed company or private company with public functions
The bus companies, the tunnel companies and certain utilities in Hong Kong are in some
respects controlled by the government. In their day-to-day operations, they function as
any other private company would. However, under their schemes of control, they are
required to submit increases in charges and fares to government and are also required
to meet performance standards laid down by the government.51 Since the companies
cannot operate without government approval, they are in effect dependent upon it. Until
1993, there were only two franchised bus companies. Although it would appear that the
companies would be able to negotiate from a strong position since they held monopolies
over their routes, this did not prove to be the case. In 1998, the government put out
tenders for a new bus franchise with the result that the New World First Bus Company
was awarded much of the China Motor Bus Companys network which then ceased to
be a franchised operator.52 There are now five franchised bus companies.

The construction and operation of Hong Kongs tunnels involve equally complex
relationships between government and private companies. Five of the tunnels have
been constructed under build, operate and transfer provisions. The government
owns a further seven tunnels that are managed and operated under contract by private
companies.53 There have been problems of congestion in some cases and under-utilisation
in others. Other difficulties have arisen from the tolls charged. If tolls are too high, as
some consumers believe, the government may be called upon to put pressure on the
company to reduce them. The relationship of the government to the bus companies
and the tunnel operators may be appropriately described as a public/private partnership
in which government regulates and coordinates and the private company provides the
service.

Greater private sector involvement in the work of government has also taken other
forms. In October 2000, the Housing Department contracted out estate management
and maintenance in the public housing estates and 7,100 staff were offered buy-outs
and voluntary departures despite strikes supported by the Hong Kong Chinese Civil
Servants Association.54 There was a greater emphasis on outsourcing and a requirement
that government departments should consider it as an alternative to providing services
themselves (see Chapter 4).55 In addition, the government supported multi-million dollar
construction projects such as Cyberport, which was expected to attract foreign investment
in information technology, Disneyland, and the West Kowloon Cultural District project,
an arts and cultural venue.

In each of these cases, public money was spent on the project and, in each case,
the project proved to be politically controversial. The Cyberport contract was awarded,
seemingly without a proper tendering process, to a son of the business tycoon, Li Kashing.56 Disneyland required the government to make an initial contribution to a joint
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company of $3.25 billion dollars in equity together with a loan of $5.6 billion.57 There
were also various planning and infrastructure costs but nothing to date by way of positive
financial returns.58 The long-running saga of the West Kowloon Cultural District project,
which the government hoped to fund on the build-operate-transfer model, became
bogged down in tendering problems, court cases, capital costs spiralling to $21.6 billion,
and allegations that the project had more to do with property development than with
the arts.59 If these experiences with the difficulties of partnering the private sector were
not enough, one of the government agencies, Invest Hong Kong, contracted out a rock
concert, meant to celebrate the revitalisation of Hong Kong after SARS, to a private
company which had little experience in the field. The government lost its sponsorship
money of $100 million and the subsequent investigation revealed inter alia shortcomings
in financial controls and in the briefing of the Legislative Council.60

In the light of that track record, the Tsang administration has been rather more
wary of grandiose projects. It has continued to support outsourcing initiatives although
they tend to be mainly limited to capital works which accounted for 73% of annual
expenditure in 2006. Eight departments accounted for almost all of the money spent.61
The government continues to stress that it is in favour of private sector involvement
but its taste for taking up public/private sector partnerships may have been tempered
by the political controversies of the past. The decision to build a cruise terminal, for
example, was originally conceived of as a public/private partnership but was abandoned
when private sector bids were deemed unsuitable. Eventually, the government decided
to finance the project itself.62

In its dealings with public bodies, the government possesses very considerable
powers over the funding and legal status of public sector organisations. It may decide, for
example, to increase or reduce subventions or capital expenditure. It may slow or speed
up the pace with which housing estates or railway lines come into operation. It may even
affect the fortunes of private companies by awarding or failing to award franchises and
contracts. In addition to the control of the purse, the government also has the ability to
change the legal status of non-government organisations through its executive powers
or through the introduction in the Legislative Council of new ordinances or amendments
to existing ordinances. A non-government organisation could have its powers shorn, or
its autonomy expanded, depending on whether the government believes that its aims
would be better achieved by a change in legal status.

Yet, despite these formidable powers, it would be wrong to assume that the
government always gets its own way and that non-government organisations do not
exercise some control and direction over their own affairs. Points of friction do emerge
between the government and the non-government organisations over funding and legal
authority. It is also true that many political issues arise because of disputes over whether
the non-government organisation has fulfilled its side of the bargain to deliver services or
infrastructure in the manner which was originally agreed. Many of these concerns are not
with funding or legal status but with the commercial operations, project implementation
or service provision of the public bodies. Since public money is likely to be involved in
one way or another, this becomes an accountability issue: how are these organisations to
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be held accountable when they were intended to be semi- or nearly wholly autonomous?
In the following section, we examine this issue in greater detail.
Accountability and Public Bodies

When the government and public are satisfied with the performance of non-government
organisations, they are left largely to their own devices. But once major issues or
scandals emerge the government often serves as a proxy for the wrath of the public or
their representatives. It may be accused of failing to ensure that there was sufficient
legislative oversight over the organisation or it may be held to be negligent in fulfilling
its duties on the boards of public corporations or it may even be judged to have made
a mistake in removing the agency from the government in the first place. Whatever the
charge, accountability relationships between the government and these organisations,
not only in Hong Kong but also in many other parts of the world, have generally been
very weak.

In the Hong Kong case, three major scandals concerning public bodies raised very
serious questions about the extent to which the organisations were accountable either to
government or the legislature. The first concerned the opening of the new international
airport at Chep Lap Kok in July 1998. The airports computer, cargo-handling and
baggage systems failed to work properly causing considerable inconvenience to
passengers and had a significant detrimental effect on the economy as many perishable
goods rotted.63 The second instance, a year later, involved inadequate construction of
two housing blocks which had to be demolished, resulting in a loss of $258 million.64
The third case involved the decision of the KCRC to overpay contractors some $321.8
million as a result of initial planning mistakes.65 Since then, there have been many other,
relatively minor, instances where public sector organisations have failed to live up to
the expectations of the government or the public.66

Would these problems have arisen if tighter accountability systems had been in
place? To try to answer that question, we have to look at the accountability system that
is presently in place to see whether the weaknesses can be remedied. There are four
major institutional checks on the work of public bodies. The first is through the powers
of direction vested in the Chief Executive or in the Principal Officials. The second is
through the power of the Chief Executive to appoint representatives who sit on the
boards of the statutory bodies and public corporations. The third is legislative scrutiny,
usually through committees or tabled reports or testimony from the executives of public
bodies in the Legislative Council. The final method is through the audit process which
serves to identify shortcomings in the financial or other dealings of the public bodies.
Powers of Direction
The Chief Executive has the power to direct the work of statutory bodies both generally
through the Interpretation and General Clauses Ordinance and, more specifically,
through the individual ordinances governing the work of the statutory bodies. He may
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appoint the members of statutory bodies and may also dismiss the board and re-constitute
it as he sees fit.67 There are also powers that may be exercised under the ordinances that
govern the boards of the statutory bodies. The Urban Renewal Authority Ordinance,
for example, provides that:
The Chief Executive may, if he considers the public interest so requires,
give directions in writing to the Authority in relation to the exercise of its
powers or the performance of its duties and the authority shall comply with
those directions.68
These are very broad powers, sufficient to ensure that the government could, if it
so wished, shape the statutory bodies in any way it wanted. In 2001, the then Chief
Secretary said that although statutory bodies are entrusted with certain executive powers,
policy responsibility remains firmly with the relevant Policy Bureaux.69 In 2007, the
government sought through judicial review to re-affirm its right to make policy over other
considerations, such as academic autonomy, in the Hong Kong Institute of Education
case.70 Normally, though, its powers to overrule the boards on policy grounds (as distinct
from appointments to boards or perceived administrative incompetence) appear to have
been used quite sparingly. Only when major strategic issues are involved, such as the
future of rail transport, has the government unequivocally asserted its policy-making
authority over the statutory bodies. On day-to-day issues, the statutory bodies are largely
left to their own devices.
Boards and Government Representation

The most important means by which the government ensures that the public body is
accountable is through the power, usually exercised by the Chief Executive, to appoint
members of the board. These often include the relevant senior government officials. The
actual role that these representatives may play is dependent on the type of organisation.
In simple voluntary organisations, for example, the board may only play an advisory
role. In more commercial organisations, by contrast, the board may, as a body corporate,
have the power to sue and be sued and it may assume a collective responsibility for the
actions and direction of the organisation. In the most commercial operations of all, the
government may have no representation on the board at all.

The different types of board mean that membership tends to reflect what government
perceives their function to be. The representational board is an attempt to replicate
community concerns. In 2007, the Housing Authority and Hospital Authority, for
example, had memberships of 30 and 24 respectively drawn from government officials,
politicians, academics and professionals.71 The Hong Kong Tourism Board is a similar,
more curious, form of the representational board. Its ordinance requires that the board
consist of twenty members of whom two shall be passenger carriers, two hotel operators,
one licensed travel agent, one tour operator, one retailer and one restaurant operator.72
This functional representation is probably not the best way to ensure unity of action from
a board; members are likely to have different views on the way forward for the industry.
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In general, the larger boards would appear more to resemble class reunions rather than
groups focused on clear policy objectives. It is difficult to see how they would be able
to hold executives accountable for administrative or policy failures.

The technical board is usually much smaller and draws on the specific expertise of
its members. The MTRC, for example, has thirteen members on its board, including three
senior civil servants, and draws on a wealth of governmental, financial and engineering
expertise.73 The concerns of the technical boards are much more focused on the business
of making money and of meeting governmental objectives rather than on the demands
of their customers which, given their composition, might be more of a concern for the
representational boards. The MTRC board does, however, include the chairman of the
Hong Kong Council of Social Service as one of its members. The holding company of
the Kowloon Motor Bus Company, by contrast, has no government representatives on
its board although it does include two former senior civil servants.74 Its relationships
with government are dependent on informal contacts with the Transport Department, the
terms of its franchise and its critical role in implementing future transport strategy.

How exactly does the ex officio board member express governments interests? The
senior civil servants who sit on the boards are in a delicate position. The public sector
organisation has generally been created to allow it to exercise a degree of autonomy
from government and to compete in the marketplace. If the government representatives
assert the official position to the exclusion of commercial considerations, they fall into
the danger of rescinding the powers they gave to the public sector organisation in the
first place.75 The government appears to believe that it can use membership on the boards
as a way both of liaising with the key players in service provision and as a means of
exercising some control. In introducing the Lump Sum Grant scheme for subvented
welfare organisations, for example, the Social Welfare Department proposed that a
government official should sit on each of the boards of the subvented bodies, which
had not previously been the case, and which, in combination with other new monitoring
and control mechanisms over social welfare expenditure, could be taken to mean that
the government wanted to ensure that its money was being spent properly.76

Since the government has not specified exactly what role its officials should play
on the boards of public sector bodies, it can probably be safely assumed that those
roles vary, from passive receipt of information to active participation, depending on
the personalities, circumstances and the degree of government funding. That does not
mean that the presence of senior public servants on the boards can prevent public sector
organisations from making mistakes or ensuring that those who make mistakes are
accountable for them. In the case of the defective public housing blocks, it is unlikely
that the members of the Housing Authority, without appropriate technical advice, would
have been able to detect what was in fact corrupt practice. The Chairman of the Housing
Authority, who was not a civil servant, did resign following the incident, but the extent
to which she could be held accountable given the complex lines of decision-making
within the Authority is questionable. The Director of Housing, who was the subject of
a no confidence vote in the legislature, did not resign. In the case of the opening of
the airport, Legislative Councillors argued that the then Chief Secretary, Anson Chan,
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who chaired a key committee, should have delayed the opening of the airport and was
therefore accountable for the mistake. The difficulty in ensuring accountability in cases
such as this is, first, establishing the difference between decisions taken as a matter
of judgement in good faith, with as much relevant information as possible, repeated
poor judgements where the calibre of the official may be in question, and reckless,
irresponsible decisions made without due process. Second, disentangling the many
hands involved in these decisions to ensure that responsibility is located in the right
place is a difficult process. Boards are given the authority to act and must certainly bear
responsibility for the way public bodies function. Yet, until the government spells out
in more precise detail what it expects of the senior civil servants on these boards, it is
not likely that their presence alone will ensure more accountable public bodies.
Legislative Scrutiny
Legislative Councillors have repeatedly asserted their wish to monitor public corporations
rather better but have also graphically described their difficulties in doing so. One
member described their role as rats trying to pull a tortoise, not knowing where to
start; another spoke of the Legislative Council as a man dressed in black trying to
catch a crow on a dark night.77 As a legislature which has relatively weak powers,
the Council is distant from the work and activities of public bodies and suffers from
the disadvantage that most of the problems that come before it have occurred in the
relatively distant past.

The Legislative Council, through its Public Accounts Committee, does have a
role in determining responsibility for poor practice and misspent public funds but
its recommendations usually come so long after the actual events that remedies (or
justifications) are already in place. The Council has powers under some ordinances
to call the chairmen and executive directors of statutory bodies to account. Under the
Urban Renewal Authority Ordinance, for example,
The committees and subcommittees of the Legislative Council may request
the Chairman and the executive directors to attend its meetings and they
shall comply.78
The Legislative Councils main powers in reviewing the work of public bodies lies in
questioning their activities in the chamber, discussing the Director of Audits findings
on their performance, reviewing their annual reports and, rarely, in investigating their
activities and in censuring their executives for inappropriate behaviour. Although all
these activities have the advantage that they bring greater transparency and publicity to
the work of public bodies, they suffer from the limitations that the Legislative Council
is over-worked and under-staffed and does not have sufficient powers. Questions in the
chamber raise issues temporarily, debates in the Public Accounts Committee dissect
past events, annual reports often gather dust, and high-level investigations and votes of
no confidence make transitory headlines. Public bodies do not always see themselves
as accountable to the legislature and they seldom appear to concern themselves with its
powers of review and sanctions.
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To illustrate the process by which potential malpractice in public bodies reaches
the attention of the Legislative Council, we may consider two cases in which the Audit
Commission conducted investigations of statutory bodies. In mid-2000, the Commission
audited the Hong Kong Sports Development Board and found room for improvement
in many of its practices. Over 80% of the Boards revenue came from a government
subvention with the balance largely provided by the Jockey Club. Contrary to government
guidelines, remuneration at some levels exceeded comparable civil service levels,
sports facilities were not fully utilised, grants were not properly handled and there were
weaknesses in the inspection of facilities, in administration and in contracting out.79 The
Audit Commission released its report in March 2001 by which stage the Secretary for
Home Affairs and the Chief Executive of the Board had both agreed to all its findings
and to remedy the defects that had been identified.

Two points are of interest. First, the Audit Commission recommended that the
Secretary for Home Affairs, as the controlling officer for the governments subvention,
should pay more attention to the way in which the Board had spent its money. Since
the Secretary was also a member of the Board which was responsible for the mistakes,
the possibility of a conflict of interest in that he was also the officer to whom it was
accountable is clearly evident. Second, the matter did not reach the Legislative Councils
Public Accounts Committee until the Audit Commission had secured agreement to
its recommendations from the Secretary of Home Affairs and Chief Executive. The
Committee did interview the relevant officials but did not release its transcript until
February 2002 and did not make its recommendations until more than two years after
the initial investigation.80 With the best will in the world, the Committee had been frozen
out of the process before it had a chance to participate.

In 2007, the Audit Commission investigated the affairs of the Tourism Board
(HKTB), 94% of whose income of $725 million was subvented by the government.81
The Commission found irregularities in corporate governance and questioned the absence
of long-term planning, spending priorities, marketing strategies, and some financial
irregularities.82 In this case, the Public Accounts Committee was able to respond almost
immediately. It found inter alia that:
The top management of the HKTB should be held directly responsible for
the deficiencies in corporate governance. It had failed to ensure that
the HKTB adopted high standards of corporate governance, effective

operations, compliance and administration systems In particular, the
Committee condemns the former E(xecutive) D(irector) who has failed
in her duties83
Although the Committee responded promptly, the resignation of the Chair and the
Executive Director effectively took the steam out of its recommendations. As the former
Chair explained, many of the recommendations had already been implemented and the
rest were in train.84 It was the Audit Commission not the Legislative Council that
held the Tourism Board accountable.
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The Legislative Council has shown some interest in developing a more direct
relationship with statutory bodies but there are no set rules on how the accountability
mechanisms should work. In practice, relationships appear to have evolved and have
not represented a deliberate effort to put checks in place. When the Urban Renewal
Authority was established, a legislator asked whether the government and the Authority
would report on progress to the Council. The Secretary for Planning and Lands, in reply,
although noting that members of the Authority had met with the Legislative Councils
Planning, Lands and Works Panel, left open the possibility that future meetings would
take place between the Authority and the administration who would then keep the
Council informed of the work of the Authority.85 If the Legislative Council is to play a
more effective monitoring role in future it will need to ensure that the rules are spelled
out more clearly.
Auditing Public Bodies

Under the Audit Ordinance, the Director of Audit has the power to investigate more
than 60 statutory and non-statutory funds.86 For the Audit Commission to audit a public
body other than a government department was until recently a relatively rare event. Its
focus has been primarily on the government accounts, value-for-money studies and
improving the execution of particular programmes. These are critical functions and ones
which legislators would expect to be performed without fear or favour. Its reviews of
the finances and practices of government departments and bureaus, and its subsequent
reports to the Public Accounts Committee, constitute an important element in the
accountability process. Legislators have steadfastly supported the independence of the
Audit Commission, questioning, for example, the appointment of a senior administrative
officer as Director of Audit in November 2003, on the grounds that there might be a
conflict of interest.87

Although the Audit Commission has taken a more proactive role in auditing
statutory bodies in recent years, the auditors of public corporations and companies also
have important responsibilities. Instead of reporting to shareholders and the market as
they would in the case of private companies, their responsibilities extend to a much
larger audience: taxpayers, government and the Legislative Council. This implies an
independent approach and transparency and publicity for their findings. In the case of
the overpayments by the KCRC to contractors, the problem was uncovered in a report
from the independent auditors.88 This kind of monitoring role is as necessary for public
corporations and companies as it is for government and the private sector. If resource
constrictions prevent the Audit Commission from extending its remit to audit public
bodies on a regular basis, government or the Legislative Council may wish to exercise
the right not only to appoint such auditors but also to provide specific instructions on
what it is that they want to find out about what is, after all, public property.

Many of these concerns about accountability and statutory organisations came
together in a motion which was passed by the Legislative Council in December
2001. The motion was principally concerned with pay and fringe benefits of senior
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executives in the largest of the public bodies89 but it also drew attention to the
accountability issues that have been raised previously in this chapter. Specifically, it
urged the government to:
review the effectiveness of appointing policy secretaries to the managing
boards of these bodies to play a monitoring role; to put these bodies under
the scrutiny of the Director of Audit so as to enhance their accountability
in their operation; and to require the senior management of these bodies to
regularly report to the Legislative Council.90
Although there are clearly major accountability problems in the relationship between
government and the public bodies in each of these respects, it was the high salaries of
senior officials, lack of transparency and political appointments to boards that caught
the attention of both legislators and the public. Those issues are considered separately
in the following section.
Public Sector Appointments and Salaries

Appointments to senior positions in public bodies and the salaries that such executives
can command are also accountability issues. If opaque committees within the organisation
determine these matters, then there is likely to be a loss of public confidence in the
recruitment and wage determination process. By December 2001, the feeling that senior
executives in statutory bodies were indeed overpaying themselves was running high.
Government data showed that 91 senior executives of five major public corporations
were being paid three to five times as much as senior civil servants with comparable
levels of responsibility.91 The government came under attack in the Legislative Council
and eventually agreed to appoint the Hay Management consultants to investigate the
comparability of the salaries of the top 100 executives in nine statutory bodies with
equivalents in the private sector. There were conditions attached to the review. The civil
service was explicitly excluded for purposes of comparison; the consultant was to make
some recommendations for salary packages but not existing contracts; there should be
reasonable guidelines for boards to determine salaries; and there should be an effective
adjustment mechanism to enable the community to monitor the long-term comparability
between remuneration packages and their private sector counterparts.92

Perhaps predictably, when the consultants reported, they found that 70% of the
Chief Executive positions had their current remunerations within a range of 15% of
the market medians. They did recommend a net downward adjustment of 10% for
prestige identified with two chief executive positions and suggested that committees
be established which would disclose to the public the full remuneration packages for
chief executives and the aggregate or average remuneration for second and third tier
executives.93 The constraints on the consultants meant that the report did not address
the fundamental issues raised by Legislative Councillors who argued that executives in
statutory bodies were public employees and that they should be paid accordingly. To
use the private sector benchmark as the standard for remuneration meant instead that
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government accepted that there should be a substantial difference between salaries for
senior civil servants and those paid to executives in other public sector organisations.
Even though some senior executives voluntarily accepted salary reductions, their
remuneration remained high in comparison to the civil service. Legislative Council
members and the media continue to raise the issue periodically94 and the government
has sought to regularise its position by introducing an annual review and reporting
mechanism between the statutory bodies and the relevant bureaus.

The governments relatively benign view of the salaries of senior public sector
executives is sometimes linked to criticism of the recruitment system and the seemingly
disproportionate number of senior civil servants appointed to high office in the statutory
bodies.95 In some instances, it is not surprising that former senior civil servants have
been employed in the statutory bodies. Where those bodies take on functions previously
performed by government, such as, for example, the Monetary Authority and Urban
Renewal Authority, the need for continuity suggests that it would be desirable to employ
former civil servants who had worked in that area. In the case of the Urban Renewal
Authority, the appointment of the managing director, who happened to be a former
senior public servant, was undertaken by a selection panel composed of the Chief
Secretary, the Financial Secretary, the Secretary for Planning and Lands, the Chairman
of the Urban Renewal Authority Board and an Executive Council member.96 Although
candidates from both the public and private sectors were considered for the position,
the heavy representation of senior civil servants gives pause for thought. In particular,
the absence of Legislative Councillors from the panel is striking.

In public corporations where the activities of the organisation are largely commercial,
it is more difficult to see why so many senior public servants have been appointed to
executive positions. There is a danger that a patronage system could develop and that
senior civil servants could begin to make decisions with one eye to lucrative future
positions in either the public bodies or the private sector. There has been considerable
concern within government about conflict of interest when senior civil servants join
the private sector and there is a prospect of unfair lobbying or the use of sensitive
information to obtain an unfair advantage. This concern does not seem to extend to
statutory bodies and the rest of the public sector which the government often seems to
regard as an extended version of its own operations. The assumption is that the qualities
of generalist administrators will be equally prized in statutory bodies whatever their
complexion. Yet one of the assumptions on which the more commercial organisations
have been established and separated from government is that they will benefit from the
application of private sector rather than public sector skills.

There has also been continuing concern that the government has used its power of
appointment to boards to reward its political supporters and to exclude opponents of the
regime.97 From 1996 onwards, Legislative Councillors repeatedly sought a review of
the role and functions of the advisory and statutory bodies in an effort to improve their
transparency and appointment procedures. In April 2002, perhaps as a sop to Council
members when the government was introducing the Principal Officials Accountability
System, the Secretary for Constitutional Affairs finally announced that a review would
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take place.98 The Home Affairs Bureau, which took charge of the process, decided on
a two-stage approach. During the first stage, the aim was to determine the guiding
principles; the second stage was to conduct in-depth reviews of particular problems or
individual advisory or statutory bodies. A consultation paper, released in April 2003,
laid out the governments view of what the guiding principles should be. Principal
Officials should be ultimately accountable for the advisory and statutory bodies
under their purview and those organisations were to do nothing to detract from
that.99 They should be structured to ensure that there was no duplication in their
work; appointment criteria should be set out before the appointment process was
under way; appointments should be on merit; the service of non-official members
should be unpaid; there should be equal opportunities for individuals from all sectors
of the community to participate in their affairs; steps should be taken to promote the
participation of women; members should declare their interests; their work should
be open and transparent; and members should not serve for more than six years or
on more than six boards (the 6 plus 6 rule).100

When the Home Affairs Bureau began to release its individual reports, it soon
became clear that, despite the governments powers of appointment, it had no intention
of enforcing its own rules. Its 2005 report on the 6 plus 6 rule showed that the numbers
of those who had been on boards for more than ten years had actually increased.101 In
his first election manifesto, Donald Tsang claimed that he would strictly enforce the rule
but, by January 2008, there were still 137 statutory board members who had served for
more than six years.102 There still appeared to be little monitoring of the performance of
board members. The Audit Commissions investigation of the Tourism Board in 2007
revealed that one member had missed fifteen consecutive meetings and had still been reappointed twice to the board.103 Others had failed to sign declaration of interest forms.104
There was very little progress either on the transparency of board meetings or on the
extent to which board members had to declare their interests. The number of women
did increase but Legislative Councillors suspected that they were disproportionately
appointed to the less important advisory and statutory bodies.105

What the government was interested in pursuing through the review was its dealings
with those organisations with which it had problems. In its classification of all advisory
and statutory bodies in June 2005 (see Table 6.1), the Home Affairs Bureau lumped into
the category non-departmental public bodies all public sector organisations with which
the government had financial, organisational or political problems.106 These included the
Hong Kong Applied Science and Technology Company, the Hong Kong Examinations
and Assessment Authority, the Prince Philip Dental Hospital, the Sports Development
Board, which was re-structured and later removed from the list, the Vocational Council,
the Hospital Authority, and the Equal Opportunities Commission which had won a
ruling from the courts that the governments secondary school allocation system was
discriminatory and had subsequently been embroiled in a political scandal over the
government-appointed chair.107 In each case, the government asserted greater control
over the operations and organisation of the non-departmental public bodies. Little was
done to address the concerns of legislators about transparency and political appointments
to boards.
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In contrast to its laissez-faire approach to recruitment and the salaries of senior
executives in the statutory bodies, the government has shown considerable interest in
trying to reduce the wage bill at middle and lower levels of subvented organisations.
The Finance Branchs guidelines on comparability with the civil service date from
1987 and have been re-affirmed from time to time. They state that salaries in subvented
bodies should not exceed equivalent salaries in the civil service. In practice, salaries
in subvented organisations have tended to be benchmarked against their civil service
counterparts although there has been some upward creep in some statutory bodies
such as the Tourism Board. The government has been intent on ensuring that this does
not happen, moving towards de-linking salaries in the subvented bodies from those in
government. For those with top-heavy organisations, the temptation might be to pay
less and dissolve the parity link with civil service salaries.

The recruitment and appointment of executives and board members, salary structures
and the accountability of public bodies have all been highly contentious matters and have
been exacerbated by the suspicion that the post-1997 government would have liked to
devolve even more government business to the private sector or to statutory bodies. To
date, not many efficiency benefits, other than outsourcing, appear to have been derived
from devolution to the private sector or public organisations beyond the civil service.
The private sector is not necessarily always more efficient than the traditional civil
service. If salary structures outside the civil service are higher than the previous cost of
delivering services, the only case that can be made for greater private sector efficiency
is that some productivity benefits will be generated by the skills of the managers or the
freedoms offered by a less rule-bound environment. Yet that itself is in doubt and has
been a source of tension with the press, the public and legislators who have all questioned
both the extent of the benefits of devolution to these bodies and the weak accountability
mechanisms that are presently in place.

That the worst fears of unionists, such as Lee Cheuk-yan, of job losses through
privatisation, of price rises, and of drops in service quality and accountability have not
been fully realised may relate partly to the strength of the political opposition to greater
devolution, the failure of some public/private partnerships, and contradictions in the
governments own position. The governments historical tendency to centralise functions
has been evident when it has been faced with political criticism of the way in which the
statutory bodies are operating. Thus, the Housing Authority was brought under closer
government control and the review of statutory bodies became an exercise in identifying
problem cases and tightening the regulatory mechanisms. Policy changes, such as the
introduction of the Lump Sum Grant mode and the school management system, have
also meant some reduction in the autonomy of subvented organisations. Since Tsang
came to office, however, there has been some retreat from the desirability of devolving
public functions to the private sector and statutory bodies and rather more emphasis on
improving the performance of existing functions within the civil service.
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Part III
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Policy and the Budgetary Cycle
ne criterion that can be used to evaluate the performance of governments is their

ability to formulate and implement sound policies which will deliver collective
benefits as efficiently, effectively and economically as possible. Our definition of public
policy as:
A set of inter-related decisions taken by a political actor or group of actors
concerning the selection of goals and the means of achieving them within a
specified situation when these should, in principle, be within the power of
these actors to achieve1
suggests that it is possible to meet that criterion. But it is also quite possible that the
government will fall far short of its goals or that those elusive objectives efficiency,
effectiveness and economy will prove to be contradictory or that one will be
maximised at the expense of the others. Our definition of policy is perhaps a little
optimistic. It assumes a logical and rational sequence of events from formulation of
goals, through consideration of the most beneficial means of achieving those ends, to
actual strategies of implementation. It is considerably easier for policy-makers when
this does occur or when they can structure their decisions so that stages follow logically,
one from another. But circumstances may not always allow a careful assessment of
the problem and its optimal solution. The need for action may be so immediate that
policy-makers do not have time to reflect on the most rational strategy or politics may
influence outcomes to the extent that the resulting policy is neither efficient nor effective
nor economic.

In the following three chapters, the overarching argument is that two policy-making
systems co-exist uneasily in Hong Kong. Until the last two decades, the policy-making
system was closed and well insulated from political pressures. It was based on a
budgetary system which so effectively controlled resources that the government was
able to build up large fiscal reserves. On the back of a buoyant economy, it had ample
means to fund its policies. Under such circumstances, it is relatively easy to fend off
political pressures and, in Ambrose Kings phrase, to co-opt potentially dissident elites
by the administrative absorption of politics.2 Civil servants, not politicians, decided
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what the policy problems were and how they should be addressed. Once the problem
was identified and under active consideration, advice could be sought from advisory
committees or from the community and could be accepted or rejected as senior civil
servants saw fit. Policy could be formulated in what appeared to be a rational and logical
way. Options could be considered, the relative benefits of different public investments
discussed, and final policies put before a public, which was often prepared well in
advance for the measures that the government intended to introduce. There were, of
course, crises which the government could not foresee and events which did not always
allow slow and considered progress towards a particular conclusion. The system itself
was modified by the rise of pressure groups and political parties and the realisation that
successful policy formulation did not always lead to successful implementation. When
such circumstances arose, the government usually chose to act first and then engaged
in subsequent remedial action if it proved to be necessary.

After 1997, another system, very different from the traditional way in which
policy had been made, gradually began to make an appearance. Here, as Kingdon
observes, policy-making processes do not always proceed chronologically but may
unfold independently and simultaneously rather than in neat, logical stages.3 After the
retrocession, three important changes affected the way in which policy was formulated
and implemented, and created the conditions which encouraged the development of a
different policy-making style. First, the political executive wanted to put its imprint on
policy. Colonial government policy-making, with the exception of the MacLehose period,
had tended to be reactive rather than proactive. The Chief Executive, the Executive
Council and, after 2002, the Principal Officials attempted to initiate changes which
would both reduce the backlog of policy problems left over from the transitional period
and establish the governments credentials, as its predecessor had done, on the basis of
performance legitimacy. The political executive expected its ideas to be translated into
action quickly through the civil service. The consequence was that some of the new
initiatives were not always as carefully assessed as they had been in the past and were
less subject to the moderating influence of the budgetary system. The policy agenda,
within a system which was becoming more disarticulated and which was characterised
by friction between the legislature, executive, judiciary and bureaucracy, was increasingly
less under the control of senior civil servants.

A second factor that changed after 1997 was that political parties, pressure
groups and civil society organisations gradually became more able to obstruct the
implementation of policy. They had relatively little influence on policy formulation
within the formal political institutions but they had enough support in the community
to make policy implementation difficult. Although the government was still able to
implement most of its policies, in an increasing number of cases it was forced to retreat
or to revise its proposals, especially after the July 2003 demonstrations confirmed the
extent of popular discontent with the existing state of affairs. The fragmented nature
of the political system, which hindered communication and consultation, did not assist
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Policy and the Budgetary Cycle 151
effective policy implementation and led to many instances of community opposition to

policies that the political executive and sometimes the legislature had approved.

The third factor that changed the nature of policy-making was a persistent structural
budgetary deficit. When the economy provided the government with sufficient revenue to
obviate the need to make hard choices, policy-making was a relatively relaxed exercise.
When real tensions arose over which services would be funded and which would not,
and when politicians needed to make authoritative decisions about the allocation of
resources, there was less time for economic rationality. More explicitly political agendas
had to be met.

After Tsang assumed office, both budgetary pressures and proactive policy-making
diminished. Tsang did not seek to take major new initiatives in his first term and
improvements in the economy meant that existing policy commitments could easily be
funded. Yet it remained difficult to introduce new policies. Civil society organisations
continued to act as a brake on what could be successfully formulated and implemented,
the pan-democrats in the legislature still had the numbers to block constitutional
changes, and the memory of the July 2003 demonstrations was sufficient to persuade
the government that it should proceed cautiously.

These increasing political and societal pressures mean that the post-1997 system is
more porous than its colonial predecessor with the consequence that policy formulation
and implementation is less easily controlled and outcomes are more difficult to predict.
That said, policy in some areas, particularly well-established policies which require
fine-tuning rather than radical change and those which are of little immediate political
interest, remain rationally driven from within the civil service rather than by the political
executive. The attempt to exert political control over the civil service is uneven; old
ways of doing things persist and the imperative that the costs and benefits of public
policies should be properly assessed continues to be important.

We will explore this argument over the next three chapters. In this chapter, we
describe and analyse the system used to allocate resources which has been the bedrock
of the traditional policy-making system. We look at the principles underlying the
budget, constraints on budget-making, the budgetary cycle and what we can learn from
the budget about patterns of expenditure and policy priorities. Although the budgetary
system remained based on the same principles as it had been before 1997, some of
the principal actors were transformed from civil servants into politicians and a new
way of allocating resources to bureaus was introduced. In Chapter 8, we consider the
political factors influencing policy more directly, the ways in which issues reach the
agenda, the extent to which the system itself is open or closed to demands from the
community, and the results of the two different policy-making styles. In Chapter 9, we
will analyse the means of achieving policy objectives and how these have changed over
time, the role played by pressure groups and parties in the implementation process, and
the contrasting features of civil-service driven policy from that of policy driven by the
political executive.
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Budgetary Principles
The budgetary process has been described as a mechanism for making choices among
competing claims for resources under conditions of scarcity.4 The scarcity arises
because there are never enough resources to meet demands; an authoritative decision
which the budget represents is needed on which policy areas will be funded
and how revenue will be raised to meet that expenditure. What principles guide the
government in determining how much money it will make available to meet demands?
Is the government willing to go into deficit, if necessary, to fund critical policy areas?
How does the budgetary process assist in establishing what should be funded and what
should not? To answer these questions requires an examination of the evolution of
budgetary principles.

The budget is based on principles which date to the origins of Hong Kong as a
colony. The British government wanted to keep the cost of running its empire as low
as possible and regarded a balanced budget as a highly desirable feature of colonial
administration. Since the Hong Kong government benefited from greater autonomy from
London when the budget was balanced, and because it was constantly being criticised by
local businessmen for spending too much, and perhaps also because senior officials were
themselves believers in fiscal frugality, Financial Secretaries put a great deal of effort into
ensuring that the government remained small and that it did not spend beyond its means.
This was particularly true after the Second World War when the colony was devastated
and had to rely on financial support from the British government to re-establish itself.
A condition of its subsequent financial autonomy, or so it was perceived, was that the
colonial government should establish a budgetary surplus. A series of long-serving
Financial Secretaries made value for money and the balanced budget the central tenets
of their fiscal credo.5 This implied certain assumptions about revenue and expenditure:
that revenue would be sufficient for the needs of a small government if the colony
continued to prosper economically and that expenditure was to be kept to a minimum
by stringent financial controls. The result was that the government accumulated large
fiscal reserves and had virtually no debt.

These principles came under pressure in the 1970s when MacLehose vastly
expanded social policy outputs, putting the budget under strain even though the economy
was prospering. In the end, however, fiscal discipline was maintained. MacLehoses
ambitious public housing targets could not be entirely met because the Finance Branch
was adamant that there were no funds available. By the end of the 1970s, Financial
Secretaries had refined their budgetary principles to the point where rules were prescribed
to guide best practice.6 In 1982, the Financial Secretary laid down four principles which
were to serve as the basis of the budgetary system:
the growth rate of public expenditure should have regard for the growth rate of the
economy;
the pattern of public sector expenditure should reflect the governments conscious
view of its priorities;
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there should be a balance between direct and indirect taxation, and between taxation
and other recurrent revenue, and the taxation system should be simple to administer,
equitable and generate enough revenue for policy priorities to be met;
guidelines should be borne in mind in preparing the annual estimates of revenue
and expenditure so that recurrent expenditure did not consume such a proportion
of the budget that capital expenditure suffered.7

In 1995, a Finance Branch publication put these principles in the context of the
continuing importance of the historical constraints of business interests and small
government:
in Hong Kong, it is the private sector, not the public sector which largely
generates the wealth on which all else depends. Disproportionately large
public sectors not only reduce the real resources available to the private sector
but may also impose a burden on the community through higher taxation.8
The Basic Law essentially endorsed all the stringent fiscal practices that the colonial
administration had adopted. During the drafting process, there were those who wanted
to include the mandatory requirement of a balanced budget in the constitutional
arrangements on the assumption that revenue would usually be sufficient to meet
expenditure. In the event, a slightly milder form of that principle was adopted. Article
107 provides that:
The Hong Kong Special Administrative Region shall follow the principle of
keeping expenditure within the limits of revenue in drawing up its budget,
and strive to achieve a fiscal balance, avoid deficits and keep the budget
commensurate with the growth rate of its gross domestic product.
If these conditions cannot be met, for how long can the government be in breach of the
Basic Law and what happens to its existing programmes if keeping expenditure within
the limits of revenue in drawing up its budget cannot be maintained? The phrase strive
to achieve a fiscal balance has been interpreted to mean that it would be possible to have
a deficit in any particular year, or perhaps for a few years, but that a balanced budget
would soon be re-established. It was not anticipated that a deficit might be structural
and that a balanced budget might become a difficult goal to achieve.

By 2004, there had been six consecutive years of budgetary deficits on the operating
account, which comprises only recurrent revenue and expenditure, and deficits on five
out of six years on the consolidated account, which includes both recurrent and capital
revenue and expenditure.9 In his 2003 budget address, the Financial Secretary, Antony
Leung, noted that the causes lay in the consolidation of the property market and the
bursting of the bubble economy, economic re-structuring with the majority of Hong
Kongs industrial production processes moving to China, an ageing population, and
increases in recurrent expenditure as a result of a rigid pay adjustment mechanism for
civil servants and subvented organisations.10 Other than reducing civil servants pay,
there was little that could be done immediately to resolve Hong Kongs other economic
ch.07(p.149-173).indd 153
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difficulties. Leungs plans for balancing the budget assumed that it could not be achieved
until 2007 and, although his successor, Henry Tang Ying-yen, was rather more optimistic
about the improving state of the economy and the positive effects of Closer Economic
Partnership Arrangement (CEPA), he revised the date for achieving a balanced budget
to 2008.11 In fact, it proved possible to balance the budget by the 20052006 financial
year, an achievement which the Financial Secretary attributed to the governments
sound policies but which might equally be taken to illustrate the difficulties of fiscal
management and forecasting in an open economy.12

In 2004, the government published its first accrual-based accounts (although it still
retained a cash-based financial management system) which it believed would better
reflect its position by showing public funds in statutory bodies and business enterprises
such as the MTRC.13 Although the accrual-based accounts did show a lower budgetary
deficit, they did not resolve the fundamental structural problem. The government also
re-affirmed the traditional principle that public expenditure should remain below 20%
of Gross Domestic Product (GDP).14 Total public expenditure in 2004 as a percentage
of GDP had been well above the 20% target (see Figure 7.1) but thereafter it fell
rapidly. This probably had more to do with improvements in the economy than with the
governments cost-cutting measures. Similarly, its estimates of its fiscal reserves proved
to be inaccurate because it could not predict the impact of the economic recovery on its
revenues. By 2004, fiscal reserves had declined to $266.4 billion and the longer term
forecast was for still further falls to the point where in 2007 they would decline to $158.4
million and there would be support for between seven and ten months of government
expenditure.15 In fact, by 2007, fiscal reserves had climbed to $369.3 million, well over
double what the government had forecast, representing 25 months of expenditure.16

The budgetary principles are important because they embody the governments
fiscal strategy and because, as such, they constitute the macro-economic background
against which policy is constructed. The formulation of the budget, however, is also
constrained by more immediate and pressing factors to which we now turn.
Constraints on Fiscal Policy

An important constraint that Financial Secretaries face when drafting the budget is the
imprecision of the economic growth figures from which are derived estimated revenue
and expenditure figures for the next financial year. Figure 7.2 shows Gross Domestic
Product (GDP) in real terms between 1988 and 2007. GDP has fluctuated wildly since
1997. It was initially adversely affected by the Asian financial crisis, the subsequent
economic malaise and the SARS epidemic, but grew strongly between 2004 and 2008
when the global financial crisis caused it to plunge once more. GDP is the starting point
for the calculation of the Medium Range Forecast (MRF) which determines the size of the
expenditure for the following year. There is a slight bias towards an optimistic forecast
because the Financial Secretary has to cover existing expenditure commitments. If the
forecast of the rate of growth is too pessimistic, expenditure will exceed revenue, even at
the formulation stage, and the budget will then be in breach of the provisions of Article
ch.07(p.149-173).indd 154
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%
24
22
20
18
16
14
12
96-97
98-99
00-01
02-03
04-05
06-07
08-09
10-11
12-13
Forecast
Figure 7.1 Public Government Expenditure as a Percentage of GDP

Source: Financial Secretary, The 200809 Budget (Hong Kong: Government Logistics Department,
March 2008), Appendix B.
Note: The government draws a distinction between public and government expenditure. Public
expenditure includes both government expenditure and expenditure on public bodies outside
government. Government expenditure is expenditure directly attributable to government
departments.
107 of the Basic Law. The projections of growth have as a result sometimes been more
optimistic than the actual rate of growth. For example, GDP actually declined in 1998,
1999 and 2001 despite positive prognoses from the government. If growth forecasts are
not met, however, the Financial Secretary will eventually be required to explain why the
deficit is so great and why the fiscal reserves are being consumed at such a rapid pace
or, conversely, why the government has accumulated such a large surplus.

The inability to predict economic growth figures accurately has a direct impact on
the determination of revenue and expenditure levels. The government is never entirely
sure how much revenue it will collect and therefore how much it will have to spend. In
prosperous times, the government will usually receive more than it expects; in difficult
economic conditions, it will need to rely on its fiscal reserves to meet its commitments.
Many factors result in volatile, short-term changes to the governments revenue base. In
particular, the land premium, stamp duties, and profit tax vary considerably depending
on the state of the economy. As Figure 7.3 shows, approximately 39% of revenue in
2007/2008 was derived from profits and salaries tax. The companies are obviously
dependent on economic circumstances for their profits which determine the amount of
tax that they pay. Tax is low at 16.5% in 2008.17 For individuals, the maximum standard
ch.07(p.149-173).indd 155
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20
18
16
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
1988
1989
1990 1991 1992 1993 1994 1995 1996 1997 1998
1999 2000
2001 2002
2003
2004 2005
2006 2007
Figure 7.2 Rate of Growth of Gross Domestic Product by Percentage Change in Real Terms
Source: Adapted from Financial Secretary, The 200809 Budget (Hong Kong: Government
Logistics Department, 2008), 2.
Profits and Salaries Taxes (39.2%)

$107.5 billion
Other Non-tax Revenue (11.3%)
$31.1 billion
Investment Income (9.5%)

$26 billion
Stamp Duties (8.3%)
$22.6 billion
Land Premium (14.1%)
$38.5 billion
Tax revenue
(65.1%) $178.2 billion
Other Tax Revenue (17.6%)

$48.1 billion
Government Revenue
Total: $273.8 billion
Non-tax revenue
(34.9%) $95.6 billion
Figure 7.3 Revenue Profile, 20072008

Source: Adapted from Financial Secretary, The 20082009 Budget: Information Pack for the
Financial Secretarys Consultations, www.legco.gov.hk, CB (1)145/0708(03) (November
2007).
ch.07(p.149-173).indd 156
11/4/09 4:18:39 PM
rate of salaries tax is 15% with an initial threshold of $216,000 in 2008 for married
people. There are substantial deductions for children, education allowances and home
loans. The tax base for both companies and individuals is consequently very narrow.
In 2007/2008, 800 companies contributed over 64% of profits tax.18 Of an estimated
working population of 3.5 million, some 2.2 million did not pay tax at all.19

The government has long been conscious of the need to broaden the tax base. In
March 2000, the Financial Secretary appointed a Task Force to review public finances
and to determine whether the operating deficits were a short-term, cyclical problem or
whether there was a longer term structural problem. An Advisory Committee was also
established to make recommendations on new broad-based taxes. When the reports were
delivered in early 2002, it was clear that members believed that there was an urgent
need for public financial reforms. The Task Force concluded that there were
unequivocal signs that even when the economy returns to normal growth,
the budget deficits will remain and indeed worsen. To continue the current
fiscal lifestyle is therefore not an option.20
It recommended that government should give priority to controlling the growth of

public expenditure and that it should consider means of making the tax base more
broad-based.21 The Advisory Committee, after a wide review of the available options,
recommended that, rather than raising salaries taxes, a consumption tax should be
considered instead.22

The government was supportive of the need for reform and believed that in principle
a goods and services tax (GST) was the best way to broaden the tax base. But it was
politically difficult and economically undesirable to bring in a new tax at a time when
unemployment was running at over 7%. The government froze most fees and charges in
1998 when it sought to alleviate the financial burden on the poor in a time of economic
hardship and it has had difficulty recovering ground since then. Only about 60% of the
proposed measures to increase taxes in 2001, for example, were eventually approved
by the Legislative Council.23 In 2003, legislators persuaded the government to withdraw
a proposal to levy a Boundaries Facilities Improvement tax which it was estimated
would raise $1 billion and which was to be charged to departing passengers to improve
services.24 The GST was a much more significant measure and attracted widespread
opposition both from within the legislature and from retailers and service businesses who,
in 2004, formed a Coalition Against Sales Tax chaired by a Liberal Party Legislative
Councillor.25

The government introduced its proposals for a GST in the form of a consultation
document in July 2006. By that stage, the budget was in surplus and unemployment
had dropped. The governments rationale for the tax was simply to broaden the revenue
base to even out the wide fluctuations of the previous decade and to provide additional
funding support for an ageing population.26 The Financial Secretary gave assurances that
there would be no threat to Hong Kongs low tax regime, that the GST would be low at
about 5% and would be expected to generate $30 billion annually, and that there would
be a high threshold for registration which would exclude many small and medium-sized
ch.07(p.149-173).indd 157
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businesses.27 Opposition to the GST continued to mount. In October 2006, a Democratic

Party Legislative Councillor, Yeung Sum, lodged a motion opposing its introduction,
claiming that 70% of the public were against it.28 During the debate, there was cross-party
support for the motion with many legislators questioning the governments assumption
that the tax base was too narrow and raising concerns about its impact on the poor and
on Hong Kongs economic competitiveness. The motion passed with 40 legislators
voting for it, four voting against, and five abstaining.29 Without support in the Legislative
Council, the government had no chance of realising its proposals. In December 2006,
the Financial Services and Treasury Bureau conceded that it is clear that the public is
strongly against GST nor are the conditions right for the introduction of GST.30

Despite its defeat on the GST, the government has continued to study options for
creating a more stable revenue base. One way in which it might raise revenue and reduce
costs is to charge for services that it now offers at highly subsidised rates. The difficulty
in doing so has been public objections to user charges although it remains government
policy to try to introduce more realistic fees even in the face of likely opposition from
legislators. The problem, as the former Financial Secretary, Henry Tang, has pointed
out, is that:
While many people agree with the User Pays principle, strong objections
have arisen when the Government has put forward specific proposals for
fee revisions based thereon. As a result, taxpayers have increasingly had to
subsidise individual users We are duty-bound to reduce the amount of
subsidies given for various fees and charges 31
A critical area in which the governments resolve will be tested is healthcare financing.
Hong Kong people currently enjoy a healthcare system which is heavily subsidised by
government and is becoming increasingly expensive.32 The governments proposals for
reforming the system all entail larger personal contributions to healthcare financing33
and are being challenged by political parties and civil society groups.
Other than raising charges for government services, the governments options for

raising revenue appear to be limited. It does not want to raise salaries or companies
tax because it fears that this might affect foreign investment and Hong Kongs
competitiveness. It could sell government-owned assets but there would be political
opposition and, in any event, it does not want to cover recurrent expenditure by this
means. Similarly, while it could issue government bonds, it does not believe that this
would resolve the fundamental structural problems of the public financial system; it
continues to support the principle that operating expenditure should be covered by
operating revenue rather than by borrowing.

Expenditure patterns are less liable to rapid fluctuation than revenue. As in many
governments, a large proportion of services continue to be funded from year to year.
The expansion of social policy programmes means that a large percentage of the budget
some 57% in 2007/ 2008 is spent on education, health and social welfare (see
Figure 7.4). When revenue is higher than expected, as it was in 2008, this does not
create any problems; the surplus simply goes into the fiscal reserves and legislators
ch.07(p.149-173).indd 158
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Housing (0.1%)
$0.2 billion
Education (24.4%)
$50.1 billion
Community and External

Affairs (3.5%)
$7.3 billion
Economic (3.9%)
$8 billion
Social Welfare - Social

Security Assistance (12.5%)
$25.7 billion
Environment and Food

(4.3%) $8.7 billion
Social Welfare - Other
Welfare Expenditure (5%)
$10.3 billion
Infrastructure (5.5%)
$11.4 billion
Health (14.8%)
$30.5 billion
Support (14.3%)
$29.4 billion
Security (11.7%)
$24 billion
Recurrent government expenditure

Total: $205.6 billion
Figure 7.4 Expenditure Profile, 200708

Source: Adapted from Financial Secretary, The 20082009 Budget: Information Pack for the
Financial Secretarys Consultations, www.legco.gov.hk, CB (1)145/0708(03) (November 2007).
complain that more services should have been funded. It is when revenue is below
expectation and the government still needs to fund existing services that it may need to
tap the fiscal reserves to meet its commitments. In 2002, for example, funding existing
services amounted to over 94% of expenditure and left the Financial Secretary with
relatively little leeway.34 In 2003, he listed some of the programmes which could not
easily be reduced or abolished. The government, he said, was providing nine years of free
education, subsidies to 86% of senior secondary students, free maternal and healthcare
services, subsidies of 82% to 97% for various medical services, and 680,000 low-cost
housing units.35 Another way of considering the rigidity of government expenditure is to
calculate the proportion of the budget which goes towards personnel or social securityrelated expenditure items. In October 2003, the Financial Secretary noted that 78% of
governments operating expenditure and 66% of total expenditure went on these items,
a fact which partly explains the governments aggressive role in cutting civil service
salaries and those of staff in subvented organisations.36

The Financial Secretary has few options other than to continue to budget for most
of the vast range of services that the government presently funds. The sunk political
and economic costs of existing programmes mean that room for manoeuvre in any
particular budget may be quite limited. The best chance of changing the direction of
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11/4/09 4:18:39 PM
fiscal policy is to make gradual reductions and to look for savings in delivering services.
In the 2003 budget, for example, the Financial Secretary set a target of a 9% reduction
in expenditure by 2007 even while expenditure in the 2003/2004 budget was projected
to rise.37 In 2008, although revenues were buoyant, the Financial Secretary, John Tsang
Chun-wah, drew attention to expenditure on the health and social welfare systems
which, if they were to remain unchanged, were expected to lead to increases of 400%
and 140% respectively in real terms by 2033.38 He argued that a central principle of
public financial management should be sustainability and that the government should
avoid measures either to raise revenue or increase expenditure that the community
will find hard to bear in the long run.39

The political environment has become a more important constraint on the Financial
Secretary than it was during much of the colonial period. The budget is now an overtly
political exercise in which the Legislative Council, political parties, civil society
organisations and the public play an active role. This is especially true in election years
when unpopular tax increases might have an impact at the polls on parties supporting
the government in the Council. There are also cleavages between business groups and
the more populist parties which annually fuel the debate on how money will be raised
and spent. The Democratic Party, for example, has challenged the basic principle that
the budget should be balanced, maintaining that expenditure on welfare, education,
housing and healthcare is indispensable and should be accorded higher priority than
mechanical attempts to balance the books.40 In times of surplus, the pan-democrats, the
DAB and unionists argue that not enough is being spent on social policy and condemn
the government for hoarding funds which could be put to better use. Business groups
have different agendas.41 They have consistently argued that the cost of the civil service is
too high, that taxes should be lowered and that the government is not showing sufficient
concern about Hong Kongs regional economic competitiveness.42

Despite their reservations about policy on particular issues, business groups generally
support the government which, for its part, has remained committed to their aims. This
is important because the Legislative Councils most potent powers over the executive
lie in the approval, modification or rejection of the governments budgetary plans which
in recent years the Council has been inclined to use to a much greater extent than in
the past. It is a traditional function of legislatures to hold governments accountable by
voting for supply and it is conceivable, although unlikely, that the governments budget
proposals could be defeated in the legislature. After the 2008 elections, the demise of
the pro-business Liberal Party in the directly-elected seats gave groups in favour of
greater social policy expenditure a small majority in the Legislative Council. To defeat
the government would require an alliance of the pan-democrats and the pro-government
DAB. While the parties have taken similar positions on particular issues such as the
governments decision to cut social security assistance, it is improbable that they would
find common ground to vote down the entire budget. Nonetheless, a Financial Secretary
without a mandate or sufficient support from parties or individuals who seek to restrain
social policy expenditure needs to tread carefully.
ch.07(p.149-173).indd 160
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The Budgetary Cycle

The Financial Secretary may have greater room for manoeuvre in the committees that
determine whether proposals will be funded and whether existing programmes continue
to be funded at the same level. Senior policy-makers take these decisions formally in
such bodies as the Executive Council, the Policy Committee and the Star Chamber,
to establish how the following years expenditure will be allocated to bureaus. Many
different values come to the fore in this process; pressure groups, political parties,
legislators, the individual departments themselves, all have an interest in seeing that their
proposals are funded and that existing programmes do not have their budgets cut. Since
resources are scarce, some will inevitably be disappointed and other will have to make
do with less than they wanted. The Financial Secretary and the Secretary for Financial
Services and the Treasury are central to the process of deciding who gets what. If the
decisions are not to be contradictory or wasteful, they must have a clear understanding
of how those decisions relate to broader questions of policy: what those policies are, in
what directions revenue and expenditure plans will take the government, and how fiscal
policy is to be co-ordinated with the policy objectives of the Chief Executive and his
senior policy-making colleagues.

The process of deciding on the new budget begins soon after the last one has been
agreed (see Table 7.1). In June, the Financial Services and Treasury Bureau updates the
Medium Range Forecast (MRF) which is the backdrop to the budget. The MRF is based
on assumptions about the future macro-economic picture particularly, the GDP and
the rate of inflation and of government fiscal intentions over the period. It is designed
to provide a perspective on the direction of government revenue and expenditure beyond
that of the annual resource allocation exercise. Table 7.2 shows the changing nature of
the governments future expectations of expenditure and revenue under the MRF. The
MRF is unreliable because, as we have seen, revenue is difficult to predict and the level
of fiscal reserves can change quite rapidly. Despite this, it represents a critical stage
in the budgetary cycle because it provides the basis for establishing the amount that
bureaus and departments will be able to spend in the coming financial year. In addition,
it is a quantification of fiscal strategy, the target which the government aspires to meet.
Budgeting in a time of surplus is obviously much easier than in a time of deficit for, even
if expenditure overruns, the impact on the governments finances can be comfortably
absorbed. When the government is running a deficit, the MRF becomes both a forecast
of future growth and an indication of the ways in which the government expects to
overcome it.

After the MRF is determined, the next step in the budgetary process is for the
Financial Services and Treasury Bureau to provide a sum, in an envelop, for each of
the Directors of Bureaus. Prior to 2002 and the introduction of the POAS, the Financial
Secretary dealt directly with departments and any changes to the estimates had to be
approved by him. The Director of Bureau was not permitted to move money from one
department to another even if the departments all came under the same bureau. Since
2002, the Financial Secretary has dealt only with Directors of Bureaus who then decide
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Table 7.1 The Budgetary Cycle

Date
1 April
June/July
July/September
October/December
February/March
March
31 March
Activity
Financial year begins.

The Financial Services and the Treasury Bureau (FSTB) updates the
Medium Range Forecast and advises the Financial Secretary on the
amount of new money for which bureaus and departments may bid.
The Financial Secretary issues envelops of funding to Directors of
Bureaus advising each of them of the amount of funding that will
be available in the coming year. Allocations for the following four
years are also given for indicative, planning purposes. Each Director
of Bureau is required to confirm acceptance of the figures and to
advise FSTB on the allocation of resources to his/her bureau and
departments.
The Resource Allocation Exercise (RAE) begins. All Controlling
Officers are invited to bid for resources for new initiatives in the
coming year. All bids have to be submitted through the Director of
Bureau who has to support the proposal and rank the bids in order
of priority. In a parallel exercise, Directors of Bureaus submit new
initiatives for inclusion in the Policy Address. Those initiatives which
have financial implications are only included in the Policy Address
if they secure RAE funding. The Star Chamber meets to consider
all bids and advises Directors of Bureaus of the results. Controlling
Officers proceed to finalise their heads of expenditure for inclusion
in the estimates.
The Chief Executive delivers his Policy Address in October.
The Financial Secretary discusses with Legislative Councillors
and invites public submissions on the shape of the future budget
and the constraints which the government faces. He produces an
information pack which is intended to set the parameters for those
discussions.
The Financial Secretary delivers his budget speech to the Legislative
Council. At the same time, he introduces the draft estimates of
expenditure and the Appropriation Bill to raise the revenue to
meet expenditure. He moves that the Appropriations Bill be read
a second time. The debate is then adjourned to allow the Finance
Committee, which is a committee of the whole Legislative Council,
to examine the draft estimates of expenditure. The Chair of the
Finance Committee reports to the Legislative Council.
Debate in the Legislative Council on the budget. The Financial
Secretary sums up the budget debate. The Appropriations Bill is
amended, if required, and passed by the Legislative Council.
Financial year ends.
Sources: I am grateful to Alan N. Lai, former Permanent Secretary for the Financial Services
and Treasury Bureau, for his comments and wording of some of the sections of this table. See
also Financial Secretary, The 200708 Budget (Hong Kong: Government Logistics Department,
2008).
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Table 7.2 The Medium Range Forecast

Operating revenue
200708
$m
200809
$m
200910
$m
201011
$m
201112 20122013
$m
$m
248,296 212,269 254,140 272,196 289,200 306,575
Operating expenditure 206,243 255,700 237,300 251,500 267,800 286,500
Operating surplus
63,715
after investment income
Fiscal reserves
Fiscal reserves as
number of months
of government
expenditure
(6,340)
55,672
57,729
61,236
67,255
369,264 484,939 477,396 526,603 581,525 648,280

25
18
21
22
24
25
Source: Adapted from Financial Secretary, The 200809 Budget Supplement and Appendices
(Hong Kong: Government Logistics Department), Appendix A, 7.
on the allocation to departments under their control and inform the Financial Secretary
of their decision. The new system gives Directors of Bureau much greater flexibility
and is consistent with the intention to allow them to take greater responsibility for their
decisions.43

Budgets are normally incremental documents and the Directors of Bureaus will
usually have a general idea of the amount they might expect to receive from the previous
years exercise because the envelop comes with projections for expenditure for the
following four years. The process nonetheless does involve two important political
decisions. The first is the determination of the governments agenda and whether the
envelop will reflect relatively greater or less emphasis on the activities of the bureau
and its departments. Since the envelop is to fund existing activities, it may be assumed
that it reflects funding for everything that has already been approved. In times of
economic difficulty, however, a bureau or some of its departments might well be expected
to do more with less; the issue of where the Financial Services and Treasury Bureau
thinks it can save money and where it reduces or does not proportionately increase the
funding relative to other bureaus is a sensitive matter which is nonetheless cushioned
by the parameters recognised for the bureaus future expected expenditure.

A second political decision rests in the Director of Bureaus allocation of funding
to the departments. The departments themselves may accept the Directors decision and
make appropriate adjustments to their own budgets but the allocation may also have to
be defended publicly in the Legislative Council and, possibly, in the press. Here again
the pressure is towards an incremental solution. Departments will be relatively happier
with an allocation which is similar to the previous year with any appropriate increases
for new projects or inflation. They, and their clients, are less likely to be happy with
radical changes to their budgets. In considering their proposals, departments will have
ch.07(p.149-173).indd 163
11/4/09 4:18:40 PM
regard for long term as well as shorter run considerations. Policies may not fit neatly
into the annual budgetary time-frame and the department may be required to devise
programmes that run over several years. Departments will also be asked by their bureaus
to account for their progress on existing programmes and to explain any shortcomings.
If they are proposing new policy initiatives, they will be subject to particular scrutiny
on the recurrent expenditure side. Additional recurrent expenditure means new posts
which will need to be justified to the Star Chamber and the Legislative Councils Finance
Committee.

By July, the Financial Services and Treasury Bureau knows how much new money
will be available for expenditure on new programmes. The Directors of Bureaus are then
asked to rank bids from their departments for new money in order of priority. The bids
are then considered by the Star Chamber which is a body composed of high-ranking
Principal Officials: the Chief Secretary for Administration, the Financial Secretary, the
Secretary for Financial Services and the Treasury and the Secretary for the Civil Service.
It is the gate-keeper for what will proceed as a funded proposal and what will be rejected
or deferred for future consideration. The Star Chamber interviews Directors of Bureaus
on their spending plans. It may also interview the heads of departments although it does
not normally do so. When it reaches a final decision on what will be funded, the new
proposals are included in the Chief Executives Policy Address.

Since most expenditure is already committed in the form of civil service salaries,
there is relatively little leeway when the budget is under pressure. For the 2002 budget,
for example, only $4.3 billion new money, which could be used to fund new or
improved services, was available.44 For the 2003 budget, the process of determining how
new money would be spent was not even necessary because the Financial Secretary
decreed that expenditure would be frozen at its 2002 levels less a levy of 1.8% on
each department. In consequence, the Star Chamber met only to consider appeals from
departments and bureaus for critical expenditure which could not be delayed. In 2008,
with a healthy budget surplus, the government was more inclined to loosen the pursestrings with planned new expenditure on airport runways and a container port, various
community-building projects, more small class teaching, investments in new markets
and environmental improvements.45 Despite its more limited role in deficit years, the
Star Chamber does have the power to make significant changes in resource allocation
by deciding on policy priorities and of how government funds should be spent.

Table 7.3 and 7.4 illustrate the final outcome of expenditure proposals for the
Environmental Protection Department and the Social Welfare Department in 2007. We
do not know what proposals the department may have put up which were rejected either
by its bureau or by the Star Chamber but the tables do illustrate which programme areas
were funded, how the allocation between programme areas was decided and where the
bureau and the department were looking to place their emphasis in the future. Each
policy programme falls within a general policy objective that provides the basis for the
more specific components contained in the policy programme. For the Environmental
Protection Department, for example, the waste facilities policy aim is to develop and
implement a sustainable waste management strategy for Hong Kong to reduce waste and
ch.07(p.149-173).indd 164
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to safeguard the health and welfare of the community from any adverse environmental
effects associated with the improper handling and disposal of waste.46 Similarly, the
aim of the Social Welfare Departments social security policy is to provide a noncontributory social security system to meet the basic and essential needs of the financially
vulnerable and the special needs of the severely disabled and elders.47 Expressed in
this way, the policy represents a continuous commitment rather than a programme that
can be completed within a specific time frame.

If we look further into the estimates of expenditure, we can discover the reasons
why particular programmes exist and why the allocation has been made in a particular
way. In the Environmental Protection Department, two programmes, waste management
and air quality, consume over 85% of expenditure.48 The emphasis on the provision of
waste facilities, relative to expenditure on other programmes, reflects a chronic shortage
of such facilities in Hong Kong and the near-exhaustion of landfill sites. The increase in
expenditure on air quality is a consequence of the decision to install emission reduction
devices on heavy-duty diesel vehicles, the maintenance of monitoring networks, and the
investigation of possible sources of indoor and toxic air pollution.49 On the one hand,
the department will be looking to meet public demand for environmental improvements
by undertaking new initiatives. On the other hand, under pressure from its bureau, and
indirectly from the Financial Services and Treasury Bureau, to reduce expenditure, it will
be seeking to complete programmes and to re-deploy staff. This constant re-evaluation
of policy programmes is a necessary step in maintaining efficient resource allocation.
Table 7.3 Environmental Protection Department: Analysis of Financial Provision
Programme Area
Waste Facilities
Air
Noise
Water
Environmental Assessment and Planning
Nature Conservation
Total
200607 (Revised)
200708 (Estimate)
1381.4
241.9
89.8
207.6
74.9
7.0
2002.6
1398.9
966.0
93.0
217.5
76.8
5.7
2,757.9 (+37.7%)
($m)
($m)
Source: Adapted from Government of the HKSAR, Estimates for the Year ending 31 March 2008
Volume 1a-General Revenue Account (Hong Kong: Printing Department, 2007), 217.

In measuring its needs for personnel for particular programmes, departments will
have to take into account not only new policy initiatives but also public demand for
existing services and speedier decision-making. To assess these factors, the departments
look at indicators (to determine demand) and targets (to attempt to improve the speed
with which the service is delivered). Thus, the Environmental Protection Department
considers, inter alia, as indicators, under its waste management programme, the number
of marine dumping permits issued, the number of prosecutions for various offences,
ch.07(p.149-173).indd 165
11/4/09 4:18:40 PM
the amount of livestock waste produced, and the number of complaints handled.50 Its
key performance measures (targets) are how quickly it can process clinical and marine
dumping disposal permits and how long it takes to respond to complaints.51 In the
Social Welfare Department, indicators for its major programme, social security, relate
particularly to the increase in the number of cases requesting social security support
and the numbers eligible for benefits under the Comprehensive Social Security Scheme
(CSSA). Cases served by the department under CSSA were expected to increase slightly
in 2008 to 356,200 while cases served under the Social Security Allowance Scheme
for the elderly were also estimated to rise by some 18,500 cases to 649,400.52 As Table
7.4 shows, actual financial provision did increase to meet the number of new cases.
However, there is a continuing problem with funding social security partly because of
an ageing population but also because many new migrants from China are dependent
on social security. Perhaps significantly, the department does not list key performance
measures or targets for this programme.
Table 7.4 Social Welfare Department: Analysis of Financial Provision
Programme Area

Family and Child Welfare

Social Security
Services for Elders
Rehabilitation and Medical Social Services
Services for Offenders
Community Development
Young People
Total
200607 (Revised)
$m
1301.6
24,158.1
3,087.2
2,607.6
280.9
133.5
1269.2
32,838.1
200708 (Estimate)
$m
1431.6
24,904.7
3,267.4
2,797.4
268.1
132.6
1,287.3
34,089.4 (+3.8%)
Source: Adapted from Government of the HKSAR, Estimates for the Year ending 31 March 2008
Volume 1b-General Revenue Account (Hong Kong: Printing Department, 2007), 339.

Although the leeway for the development of new initiatives may be limited in
times of budgetary austerity, new policies provide important recognition that the
government is responding to community need. There is keen competition for new
money within government and from many groups outside government who would
like to see expenditure on their favoured projects. The acceptance or rejection of a
proposal will have much to do with the politics of the issue. Yet while it will depend
on political factors, acceptance or rejection will also be affected by the contribution that
the proposal makes to the governments general policy direction, the perception that it
addresses an important problem, pressure in the community for its adoption, and the
vigour with which the Director of Bureau makes the case for funding. If it is accepted
as part of the policy address or is contained as a newly-funded initiative in the Principal
Officials post-policy address briefing, it has received de facto recognition as part of the
institutional agenda, a sign that its implementation is to be taken seriously.
ch.07(p.149-173).indd 166
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The Chief Executives policy address is produced by the Central Policy Unit (CPU)
which collates the approved new proposals. Despite its name, the CPU does not have
any say in deciding which policies will proceed. Before 1997, it did produce papers
on policy problems for the information and attention of senior policy-makers, some of
which were acted upon. After 1997, apart from its role in preparing the policy address,
it appears to have focused mainly on research into policy issues which appear to have
only a marginal influence on the formulation process.53 Until 2002, the Governor or the
Chief Executive traditionally delivered the policy address to the Legislative Council in
the first week of October. In 2002, the Chief Executive moved the date of the policy
address to January 2003 in order to allow the new Principal Officials more time to prepare
their plans and establish their priorities but, under Tsang, the date has again been moved
back to October. The policy address contains both a review of current progress and an
indication of future directions. In his 2008 address, for example, the Chief Executive
began with an account of the problems resulting from the global financial crisis. He
went on to outline measures that would be taken to address those problems and policy
initiatives that would be taken to improve the environment and to introduce increased
social security benefits, competition laws and healthcare reform. There was mention of
further constitutional development and regulatory measures to ensure food safety and
protection for flat buyers.54 Accompanying the policy address is a booklet entitled Policy
Agenda which, in 2008, reported progress on previous and continuing initiatives on the
infrastructure, the quality of life, advances towards achieving a more caring society,
attracting new talent to the city and developing democracy and enhancing governance.55
The governments initiatives are expressed very broadly and contain no details about the
problems encountered in implementation or about their funding. It appears to be aimed
primarily at describing in a favourable light what the government is actually doing.

The debate following the policy address gives members of the Legislative
Council the chance to praise the government for its foresight and to castigate it for its
shortcomings. Since members may not propose additional expenditure in the budget
itself, the debate on the address is a convenient opportunity to bring alternative views on
policy to the governments attention. The government cannot entirely ignore legislators
views because it needs the Councils support to pass the budget when it is presented
in March of the following year. Consequently, it consults with legislators and drafts
proposals which are likely to gain the support of a majority of the Council.

The debate on the address is a formal occasion. In addition, the Financial Secretary
meets with political parties and groups of legislators less formally to ascertain their
views.56 In 1992, the then Financial Secretary, Sir Hamish MacLeod, was forced
to withdraw a measure to increase rates in the face of opposition from Legislative
Councillors. As a result of this experience, the Financial Secretary now seems to be bound
by convention to consult with legislators in advance of the budget in order that they can
make their contributions in good time. 57 More recently, the process has become even
more institutionalised with the Financial Secretary putting out an information pack
which contains information on the state of the economy, present expenditure and revenue
patterns and the direction that the government thinks that policy should take. He then
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invites comments from legislators as well as the public on the forthcoming budget.58 In
2006, for example, the Financial Secretary met with groups in favour of, and opposed
to, the goods and services tax, and with organisations, such as the Hong Kong Council
for Social Service, Oxfam and the Society for Community Organisations, who were
seeking to increase expenditure on welfare.59 There is some scepticism whether the
governments apparent receptivity to new ideas is any more than good public relations.
As one commentator remarked, it is mostly a cosmetic exercise, with the government
seeking and listening to the views of the community and then going off and doing exactly
what it wanted to do before the start of the so-called consultation.60 The Financial
Services and Treasury Bureau does, however, write to all those who made unsuccessful
submissions to explain why their proposals were not accepted. By the time the Financial
Secretary meets legislators, the main features of the following years budget are in place
although small concessions with little financial impact may still be made.

The Financial Secretary presents the budget to the Legislative Council at the end of
February or in the first or second week of March. The first reading of the Appropriations
Bill, which is the budget, is a purely formal exercise to table the bill. On the same day
that it is read, the estimates of expenditure are tabled. The budget speech itself is actually
the Financial Secretarys speech in support of a motion to read the Appropriations Bill
for a second time. In his speech, the Financial Secretary will normally range widely
over the state of the economy and the governments financial position, explaining how
the budget takes account of these factors. In 2008, for example, the Financial Secretary
spoke of the problems of an ageing population, the need for new financing arrangements
for healthcare services, and the funding for new infrastructural projects which had
been foreshadowed in the Chief Executives policy address.61 There are rarely major
economic changes announced in the budget. Taxes may be adjusted slightly upwards
or downwards, special provisions may be announced for particular groups, such as the
elderly or charities, and mention will be made of the projects which will be funded by
new money. But, for the most part, the changes are likely to be incremental and relatively
innocuous reflecting the kinds of constraints under which the budget is made.

The President of the Council then refers the estimates to the Finance Committee.
The Finance Committee is a committee composed of all members of the Council with
the exception of the President. The Committee has a continuous role in the budgetary
process. It is required to approve any supplementary expenditure during the course of
the year and its two sub-committees, on establishment and public works, meet frequently
to consider new posts and capital expenditure respectively. The most important task of
the Finance Committee is to ensure that the estimates of expenditure requested in the
budget are no more than necessary for the execution of the approved policies.62 The
members may raise questions in writing about the plans of bureaus and departments with
the Principal Officials and may ask supplementary questions at the special meetings of
the Committee which are held in public three weeks after the budget speech has been
read. The Directors of Bureaus are given 45 minutes each to explain their proposals
and to answer written and supplementary questions. After these special meetings have
concluded, the Chair presents a report on the proceedings to the full Council.
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After the resumption of the debate on the second reading of the Appropriations
Bill, members of the Legislative Council are free to express their views on the general
direction of the budget, on what it will achieve and the areas in which it has failed to
bring about improvements. This is an opportunity for Legislative Council members to
voice their particular concerns. Each member is given fifteen minutes to elaborate on
what they feel are the pressing issues facing Hong Kong. The debate always ranges
widely. In the 2007 debate, for example, members raised the problems of traffic
congestion, youth unemployment, the need for environmental improvements, domestic
violence, the underspending of some government departments, and problems with waste
and sewage treatment as well as many other issues.63 Members of the Council speak
for and to their constituents in the budget debate so that it is not surprising that they
cover many different subjects and sometimes recommend completely contrary courses
of action to that proposed by the Financial Secretary. The Financial Secretary, closing
the discussion on the second reading, dwells again on the general direction to which
the budget is pointing, notes the points raised by members, and seeks to move away
from the specifics to the larger picture. In recent years, members have been calling for
a division at this stage although the government has always had a comfortable majority
in the ensuing vote.

Once the second reading is concluded, the Legislative Council moves into committee
to consider specific heads of expenditure, most of which are passed without opposition.
Members are permitted to move amendments provided that they reduce rather than
increase expenditure. In 2003, two amendments were proposed which, had they passed,
would have had the effect of abolishing the Complaints Against the Police Office and
the Constitutional Affairs Bureau on the grounds, members argued, that they were not
properly fulfilling their functions.64 The Secretary for Security and the Secretary for
Constitutional Affairs responded to the amendments which were defeated and the budget
then moved on to its third reading. The final stage is the consent of the Chief Executive
which is a formality provided that the budget has not been so substantially amended
that it no longer reflects governments original intentions.
Policy and the Budget

Our definition of public policy starts with the notion that it is comprised of a set of
inter-related decisions. Ideally, the budget should reflect a series of coherent decisions
that eventually come together as integrated policy. They are expected to be coherent in
at least two different senses. First, the decisions themselves should not be contradictory.
With the many thousands of individual decisions that make up a budget, it is quite
conceivable that individual departments or policy bureaus will formulate or implement
policies that either cancel each other out or make the desired outcome more difficult to
achieve. In the 1980s, for example, an area that had been designated as a marine park
by one department was being used as a landfill site by another. In such cases, the swift
intervention of senior officials can probably resolve the problem quite quickly. In other
cases, it may be the values on which the policies themselves are based that may be in
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total or partial conflict. The policy to provide public housing for those below a certain
income level, for example, will be more difficult to achieve since the government has
also committed itself to refrain from building more home ownership flats, and thus
generating revenue, in the interests of raising property prices.65 Values, such as equity,
often break down in the face of the political reality that policies sometimes benefit some
groups at the expense of others. Traditionally, the structure of government has not been
designed to minimise such problems which require both extensive lateral co-ordination
between departments and strong leadership to resolve value differences reflected in
policy. The best that can perhaps be hoped for is that the government is aware of the
possibility of such conflicts and attempts to resolve them before policies are actually
introduced and implemented.

The second, related sense in which governments policies should be coherent is
that, as the 1982 budget guidelines maintain, they should represent conscious policy
choices.66 The extent to which there is a match between stated policy objectives and
the way in which the government spends money provides one indication of how well
the many decisions involved in the budget process come together in broad policy
streams. In assessing how successful the government has been in this respect, we need
to consider the total public expenditure because, in the social policy field, in particular,
implementation is often undertaken by subvented bodies. We may analyse the relationship
between aggregated expenditure decisions and intended policy objectives from a shortterm perspective, examining year-on-year changes in budget allocation, and a longer
term perspective to determine how allocation has been made to different sectors over
the last decade. If the budget is consciously used by policy-makers, as it should be, to
facilitate the achievement of goals, this should provide an important indication of the
issues that have priority on the policy agenda.

Table 7.5 shows the budget allocation by sector in 2007 and 2008. In such a
short time span, the budget should usually reflect incremental policies because a
large proportion of expenditure is already committed to existing programmes which
are regarded as essential. Crises and one-off programmes may sometimes disrupt the
short-term incremental pattern of resource allocation. In 2003, for example, the SARS
outbreak meant that actual expenditure on health was $1 billion over budget in the
revised estimates. In 2008, expenditure on education, community and external affairs
and economic sectors showed large percentage increases which reflected specific new
projects such as the establishment of an $18 billion research endowment fund and
funding for the West Kowloon Cultural District project and a new cruise terminal (see
Table 7.6). Such increases are exceptional and deviate from the underlying trend of most
policy sectors which show only marginal changes to funding in the short term.

If there is to be increased expenditure as a result of a new policy initiative, there
should be a match between the statement of priorities in the policy address and increased
expenditure in that area in the budget. This has generally been true of education, for
example, which was identified as a priority in a number of policy addresses and where
there has been considerable increases in government expenditure both in absolute terms
and as a percentage of the share of the total budget (see Tables 7.5 and 7.6). Once policy
ch.07(p.149-173).indd 170
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Table 7.5 Total Public Expenditure: Year-on-Year Change 20072008 and 20082009
Sector

200708
Revised Estimate ($m)
Education
Social Welfare
Health
Community and External Affairs
Security
Economic
Infrastructure
Housing
Environment and Food
Support
Total
55,066
34,896
33,533
8,304
28,120
14,020
22,905
15,604
12,115
31,885
255,858
200809
Estimate ($m)
77,275
39,448
35,828
32,582
28,368
26,552
24,974
16,968
12,440
37,647
332,082
Increase/decrease
in real terms (%)
30.5
2.2
5.3
290.5
-5.7
73.6
2.5
3.7
0.3
1.9
20.7
Source: Adapted from Financial Secretary, The 200809 Budget (Hong Kong: Government
Logistics Department, 2008), Appendix B, 22.
Notes: 1. Economic covers air and sea communication, commerce and industry, employment,
financial services, information technology and broadcasting, posts, power, competition
policy and consumer protection, public safety and travel and tourism.

2. Support covers the central management of the civil service, complaints against
maladministration, constitutional affairs, intra-governmental services, revenue collection
and financial control and support for members of the Legislative Council.
priorities are established, it may be more difficult to turn off the funding tap, mainly
because programmes may need some years to complete and because adverse reactions
to budget cuts may result in political difficulties. If there is no likelihood of additional
funding for new programmes and bureaus and departments have to make do with what
they have or with less than they presently have, expenditure debates will probably
revolve around the programmes which are regarded as essential. Bureaucratic battles
for new resources are more likely to be fought within departments and bureaus rather
than in competition with other parts of the civil service.

Table 7.6 shows the allocation of resources within policy sectors over a lengthier
period of time. The figures for the 1992/1993 budget have been included to show
that there has been comparatively little difference over time between the sectoral
budget allocations before and after 1997. Spending on education and social welfare
programmes are notable exceptions and have increased considerably. Increased
expenditure on education reflects one of the policy priorities of the administration but
the growth of social welfare spending is a function of an ageing population and uncertain
economic conditions; the post-1997 government is no more sympathetic to the idea
of comprehensive social security than its colonial predecessor. There have been some
changes in housing over the period indicating the policy shift in the Tung administration
which began its term in office with promises of increased public housing supply. There
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Table 7.6 Total Public Expenditure by Percentage by Policy Area Group

Policy Area Groups
199293
200405
200506
200607

200708
(revised
estimate)
200809
(estimate)
21.5
12.5
13.1
13.6
5.9
11.0
9.0
5.5
4.7
3.2
23.3
11.3
10.8
11.9
5.1
8.5
7.5
8.0
3.8
9.8
Total Public
Expenditure
($million)
255,858
332,082
Education
18.7
Support
11.6
Health
11.8
Social Welfare
10.2
Housing
17.0
Security
9.6
Infrastructure
8.5
Economic
4.6
Environment and Food 4.6
Community and
3.4
External Affairs
123,490
21.2
12.5
12.5
12.9
7.0
9.9
12.0
4.9
4.0
3.1
22.2
11.7
12.9
13.6
6.3
10.1
11.0
5.1
3.9
3.2
21.5
12.3
13.3
13.9
6.1
10.4
9.7
5.3
4.7
3.2
257,137
244,982
241,744
Sources: Adapted from Financial Secretary, The 200809 Budget (Hong Kong; Government
Logistics Department, 2008), Appendix B, 29; Financial Secretary, The 19971998 Budget (Hong
Kong: Government Printer, 1997), Appendix B.
Note: For an explanation of the categories of Support and Economic, see Table 7.5, notes 1
and 2.
is a relative decrease in spending on infrastructure but that can be explained by the

capital expenditure on the new airport in the 1990s.

Other than education and social welfare, there has been some movement in a few
sectoral categories, which would help to explain the remaining differences between
the 1992 budget and the 2008/2009 budget. Expenditure on the environment has risen
but may be explained partly by the abolition of the Urban and Regional Councils and
the inclusion of environmental hygiene as expenditure on environment and food rather
than on community and external affairs. Generally, the ways in which the Hong Kong
government has allocated funding to the various sectors over the last decade has been
relatively consistent. Social policies continue to consume the bulk of expenditure and
present the major challenge for any Financial Secretary seeking to obtain value for
money from the budget.

We began this chapter by suggesting that the policy-making system in Hong Kong
was undergoing significant change, from a decision-making process that was largely
closed and controlled by the bureaucracy to one that was more open, fractious and
subject to direction from the political executive. The budgetary process provides some
illustration of how this change is occurring. Although policy outputs are largely similar
in terms of the proportion of the budget devoted to each sector, the means of reaching
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agreement on the allocation of resources has gradually evolved into a more public
exercise than was previously the case. Financial Secretaries now consult with legislators,
political parties and pressure groups on the shape of the budget; the political executive,
rather than the senior civil service alone, is charged with the responsibility for coming
up with new ideas and projects; and there is a continuous public debate on whether
government proposals are appropriate. This does not mean that decisions are necessarily
taken in a more rational or logical way. Conflicting pressures may result in decisions
that are less than optimal, particularly when resources are scarce. The constraints on
the decision-makers have increased and their room for manoeuvre has correspondingly
declined because the political environment has changed. In the following chapter on the
policy process and the political system, we examine some of the wider ramifications of
the superimposition of one policy-making system on another.
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The Policy Process
efinitions of policy are often recognised to be inadequate to cover the range of

practical and analytical difficulties that the term encompasses.1 Policy may involve
debates over values, establishing an agenda to determine priorities, consultation with the
public, negotiations between politicians and stakeholders, and deciding authoritatively
on which course of action should be followed. It will also involve the use of state
power, interactions between institutions and organisations, both inside and outside the
governmental structure, strategies to ensure successful implementation, assessments
of the impact of the policy on citizens and much more besides. It is difficult to find
a definition which will cover this complex interaction between values, agendas,
institutions, groups, and the impact that policy has on people. Some analysts seek
to avoid the complexity by defining policy simply as the output or decisions of any
public sector organisation. The difficulty with this approach is that it may miss the
substantively important political issues in the process of arriving at decisions. It also
fails to distinguish between different types of policies: a decision to raise the fines for
illegal parking, for example, would fall into the same category as government policy on
education. Our definition of public policy takes it to be a broad course of action, a set of
related decisions rather than random choices, involving the selection of goals and the
means of achieving them within a specified situation when these should, in principle,
be within the power of these actors to achieve.2 Even with this definition we have
some conceptual problems. Not all elements of the process can easily be incorporated
within the dynamics of policy-making and there are, moreover, important debates among
scholars about the degree of rationality in policy formulation and the extent to which
goals can be realised by employing rational means.

It would be helpful if we could escape from some of these conceptual difficulties by
analysing policy-making as a sequence. We might begin with the observation that policy
is, first, a debate about values. There has been a continuing debate over values in Hong
Kong, for example, between the government and schools and education pressure groups
over the extent to which the medium of instruction should be Cantonese or English.
Government officials, pressure groups, political parties and anyone else who chooses to
join the public debate are all policy actors in this process although clearly not everyone
ch.08(p.175-200).indd 175
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has the same degree of influence on the final decision.3 The debate may be about whether
the value is of such importance that it should reach the policy agenda or, if it is agreed
that action should be taken, about the means to be used to ensure that it is achieved. The
government itself will also have goals which may require some discussion to ascertain
whether they have sufficient public support. Relatively few values reach the institutional
agenda which is composed of those items up for active and serious consideration by the
policy-makers.4 Policy-makers usually come from inside the political and administrative
system. In Hong Kong, they would consist of the Chief Executive, the Chief Secretary
for Administration, the Financial Secretary, Directors of Bureaus, senior civil servants
and members of the Executive Council. Legislative Councillors and advisory committees
may also be involved. The next stage is for policy to be implemented, a process fraught
with problems and unrealised expectations. In seeking to realise their values to
translate words into action policy implementers use public institutions, principally
government departments and quasi-governmental agencies, but also groups, voluntary
organisations and people outside the government framework, to achieve their goals. If
these stages are completed successfully, we should be able to arrive at some judgment
on the type of output, the policy content. Finally, the success or failure of the action
must be evaluated to see whether its objectives have been realised and whether public
funds have been properly spent.

The idea that policy might begin as a debate over values, proceed through agendasetting to formulation, and emerge as a tangible policy, which is then implemented and
evaluated, provides a convenient analytical map from which we can follow the stream of
policy from its formulative stages to its final conclusion. Unfortunately, it may also be an
idealised, unrealistic and misleading view of policy. As Kingdon remarks, while there
are indeed different processes, they do not necessarily follow one another through time
in any regular pattern.5 This is a matter of degree, however. Under some circumstances,
policy might move forward in steps or stages provided that the decision-making system
is insulated from politics and that it enjoys relative autonomy from business and other
influential elites. Such conditions applied in Hong Kong, for example, under the colonial
system where the government controlled the policy process, where there were no political
parties or pressure groups and where the policy-making process, for the most part,
took place behind closed doors. The political system is a key variable determining the
dominant mode of policy-making. It is unlikely that all policy will be made in exactly
the same way. Within any system, policy will be formulated in different ways depending
on the political circumstances, particularly whether the issue is controversial.

Kingdons model of three streams of action problems, politics and policy is
perhaps better suited to an explanation of the policy-making system that emerged in
the later transitional period and in post-colonial Hong Kong where the factors that
often make success unpredictable, such as parties, pressure groups and public opinion,
had greater influence over the process.6 In this model, values are debated up to, and
sometimes after, implementation. Policies may be re-formulated at the point of delivery
and may have to be re-visited to take account of spectacular failures or unexpected
problems. Resources may dry up; governments may change their minds; success may
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The Policy Process 177
owe more to accidental fortune than to planned, rational calculation. Policy-making,

in this conception, is a messy, political business whose outcomes may be fortuitous or
disastrous, and often unintended. For Kingdon, the chances of achieving policy goals
are greater when there is a window of opportunity in which the three streams of action
come together to enable policy to be made authoritatively. Yet while this resolves the
debate over values, it does not in itself guarantee successful implementation.

In the Hong Kong context, bearing in mind the caveat that policy-making might
not always occur as a logical sequence of events, it may still be helpful to try to clarify
the policy process by distinguishing the different processes involved in policy-making
the role of values and policy actors, the role of public institutions, the location of
power within the system, and so on. We should note that the dominant mode of policymaking in the colonial period has persisted beyond 1997. However, the government now
operates in a more turbulent political environment, especially in its relationship with
civil society organisations, and seeks to deal with policy issues in rather different ways
from its predecessor. In consequence, there are at least two styles of policy-making.
One mode, which we characterise as rational, has its origins in the policy formulation
style of colonial times. The other, which is much closer to the situation which Kingdon
describes, reflects the politics of policy-making in the post-1997 period.

The four stages outlined below cannot always be assumed to follow each other
sequentially but, in whatever context or order they occur, they are central to the nature
of the policy process and are used as a framework for this chapter:
the predominant values represented in the policy formulation process (values and
the policy agenda);
the location of power within the system and the role of institutions in formulating
specific policies (power and the institutional framework);
the nature of consultation and participation, that is, the extent to which the policymaking system is open or closed (consultation and participation); and
the types of policies that are actually produced (content and outputs).

For much of the colonial period, policy-making gives the impression of a rational
sequence in the order listed above. The administration was insulated from popular
pressures and debates over values and the policy agenda were decided with minimal
public consultation. Policy decisions were reached after careful consideration within the
government and were usually incremental adjustments to long-established practices which
eventually proved insufficient to meet the demands of the community. In the 1970s, the
MacLehose administration introduced more distributive policies and more attention was
given to the provision of collective goods, such as education and housing.

After the Sino-British Agreement in 1984, the character of policy-making changed
again. Values were often agreed but implementation sometimes faltered in the face
of opposition from political and social groups; policy initiatives were often largely
symbolic. In the post-1997 era, lack of institutional co-ordination in a disarticulated
system contributed to the emergence of disjointed policies which were sometimes poorly
implemented. Policy became much more contentious and seemingly less rational and
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ordered and the process became more fragmented and less authoritative. Yet there is
historical continuity in policy-making so that values, institutions and processes may all
be incorporated in the new mix. Some policies, even in post-1997 Hong Kong, continue
to be made in largely the same way as before the retrocession.

The most significant new factor affecting policy-making in post-1997 Hong Kong
has been the rise of civil society. Under the Tung administration, the inclination initially
was to try to implement policy whether or not this brought the government into conflict
with civil society organisations. While policy could still be formulated by an executiveled government, its implementation gradually became more difficult. Civil society
groups grew in strength7 and, even more problematic for the government, sometimes
emerged following formal legislative approval of a policy. After the watershed July
2003 demonstrations against the introduction of national security laws, the ability of
the government to introduce new policies was severely constrained by the fear that
they would provoke similar reactions from the public. Under Tsang, although there
was some improvement in policy co-ordination and consultation with the public, the
governments policy capacity remained in doubt.8 Unpopular policies, such as the goods
and services tax, were abandoned at the process stage when it became clear that there
would be substantial organised opposition to their implementation.

In the remainder of this chapter, we analyse why these changes have taken place,
why some features of the system remain and others do not, why policy capacity and
the ability to introduce new policies is low, and what consequences have resulted from
problems with formulation and implementation.
Policy-Making under Colonial Rule

In the following section, we consider the political underpinnings of the colonial style
of policy-making and how it related to rationality.
Values and the Policy Agenda

Values impinge on the policy process in many different ways. At the most general level,
they are implicit in regime values, which are an underlying component of the political
system and which may have a determining influence on the way in which concrete
policies are devised.9 Regime values provide a polity with its legitimacy. They provide
the justification for the use of coercive action and the persuasive reference point when
a government needs popular support. They may relate closely to more specific policy
values, in the sense that there is congruence between what a regime stands for and what
its specific policies represent, or there may be a vast distance between the ideals on
which the polity is founded and the concrete policies that the government is actually
formulating and implementing. What were those regime values in colonial Hong Kong?
How did they translate into specific policies?

The dominant form of policy-making is determined largely by political factors.
Under colonialism, the regime was concerned with maintaining its rule and with the
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associated problems of political stability and legitimacy. It wanted to encourage economic

growth and believed that this could be achieved by keeping government small and by
allowing business to have free rein, unrestricted by regulation. The fundamental concerns
with political stability inevitably placed some constraints on government. Policy-making
tended to be incremental because the functions of government were limited and did not
change much and because they had usually been devised with the intent of maintaining
stability or encouraging enterprise through free trade and a free port. To get new policies
on the agenda was difficult. The government could not raise tax revenue for social
policies without encountering fierce opposition. A low tax regime was a fundamental
premise on which Hong Kongs fiscal policies were based.

Although this was essentially a system of colonial control, it was also one that
was governed by well-respected conventions. The colonial administration would not
tolerate threats to its rule. It did not normally intervene in the market and was often
accused by business people of doing little to help them. But it also did little to regulate
business and benign neglect served the interests of commerce well. The governments
relationship with the people was distant. It legitimised its rule by arguing that the colonial
administration provided good government and order and security which, implicitly, were
not to be found across the border in China.

After the 1966-1967 riots, the government sought to address mounting social
problems and to establish a better relationship with society. This meant that the values
underlying policy also had to change. In contrast to the distance that had characterised
relationships between government and people prior to the riots, the government now
tried to bridge the gap and to move towards meeting more of their needs. The difference
in the values underlying the policy-making system can be identified from a keynote
speech by MacLehose to the Legislative Council in October 1972. Speaking of the need
to improve housing conditions, he said:
the inadequacy and scarcity of housing and all this implies is one of
the major and most constant sources of friction and unhappiness between
the Government and the population. It offends alike our humanity, our civic
pride and our political good sense.10
Governors, prior to MacLehose, would have been reluctant to make speeches which so
clearly acknowledged governments moral responsibility to improve the social conditions
of the population.

MacLehoses initiatives resulted in vastly increased, publicly-funded, social
policy outputs. More housing units were built, new towns were constructed in the New
Territories, social welfare and healthcare provision was increased and education was
eventually extended to three years of compulsory secondary school. The government
quickly learned that distributing social policy outputs in greater quantity could positively
lift its political support. But there were costs, both to the long-standing value of small
government and to the regimes traditional distant relationship with society. To provide
more collective goods required a more interventionist approach. Of necessity, the civil
service began to grow rapidly and the Hong Kong government began to take on the
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characteristics of a major service provider, a role that it had previously tried to avoid.
At the outset of MacLehoses decade-long tenure, the administration probably believed
that it could control the process of building a more prosperous, better-housed, healthier
and better-educated population.

But social policy outputs have their own dynamics. The society that had emerged
by the end of MacLehoses tenure in 1982 was markedly different from the immediate
post-1967 period. Its members, particularly its educated members, wanted much more
active participation in the affairs of the colony (now known as a territory). Pressure
groups had become more critical of deficiencies in social policy and labour was more
belligerent, particularly within the civil service where the staff associations had grown
in number and strength. The professionals who provided the new services teachers
and social workers, for example had their own views about how those services should
be provided and what they should be paid for providing them. New values began to
infiltrate the policy process. Consultation with the people became the leitmotif of the
administration although government still claimed the right to make the final decision.

While the economy prospered and government had the ability to deliver desired
collective goods, the values on which policy was based continued to receive widespread
support. The governments control over the policy process, however, gradually declined.
The decision to return the territory to China politicised the population, creating
uncertainty and reducing confidence in the established order. The government came
under siege from those who wanted to see a more democratic system in place before
1997, from an increasingly influential Chinese government, and from a variety of
pressure groups seeking guarantees that their own positions would be safeguarded after
the resumption of sovereignty. The government stuck to its previous commitments to
distributive social policies but it was not able to implement them as forcefully as before
and it had to develop policies with an eye to maintaining confidence in the system. In
consequence, policy-making often had symbolic aims in which the articulation of the
value sometimes seemed more important than its actual implementation.

By 1997, a much more dynamic, and sometimes contradictory, mix of values was
influencing policy-making. There was pressure for a more active government that would
address enduring social problems and which would set in place policies which could not
be subverted by the Chinese government. For its part, the Chinese government seemed
to want to inherit a system unchanged from unreformed colonial days; they sought to
exclude the democratic parties from power. The British governments principal aim was
to leave the territory with the minimal possible disruption and with its dignity intact.
Until Patten became Governor in 1992, it tried to do as little as possible to offend
the Chinese government. Policy became a hostage to these forces. In some cases, the
government did take active measures to address concerns, to improve social conditions
and to protect civil liberties. In others, policy remained largely symbolic because the
government preferred to let sleeping dogs lie rather than risk more confrontational
politics.11
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Power and the Institutional Framework

Where does power reside in a system? Who has the authoritative right to decide which
policies should be pursued and implemented and which should not? The location of
power in a policy-making system is important because it is a critical factor influencing
the way in which policy is made. If power is centralised, civil society relatively weak,
and decisions can be effectively implemented, then the chances of following a sequential,
planned policy process from formulation to implementation are greater. If power is
diffuse, scattered among various institutions and groups within society, then policymaking becomes more difficult as different influential institutions or groups affect both
policy formulation and implementation.

Power in classical colonial systems was invariably centralised and exercised through
a hierarchically organised civil service. No institution challenged the authority of the
Governor and the Secretariat. The government spoke with one voice and whatever
disagreements existed between civil servants over policy were kept behind closed
doors. The only occasional constraint on the local administrations ability to make
policy autonomously was pressure from the British government to ensure that social
and labour conditions in Hong Kong met basic standards.12 Apart from these sporadic
concerns, the colonial administration was usually left to its own devices. The Colonial
Secretariat was the principal source of policy advice for the Governor and policy
ideas were either generated within the Secretariat or from departmental proposals. The
functions of government were very limited. Once policies were established, the changes
that were required were largely incremental, mainly changing or tightening a regulation
here or there. The Secretariat was not particularly responsive to attempts by government
departments to change policies and vetted new proposals carefully. It saw itself as
holding a monopoly over decision-making. To arrive at the point where policy was to be
changed or initiated required the approval of the senior officials, the Governor, the Chief
Secretary and the Financial Secretary. Without their support, nothing could be achieved;
even with their support, a period of bargaining over resources usually followed.13 When
policy papers were finally agreed internally, they went to the Executive Council and the
Finance Committee of the Legislative Council for further discussion and approval.

The changes introduced in the 1970s from a basically incremental to a more
distributive system had important repercussions for the way in which policy was
made. In 1973, the McKinsey consultants recommended the establishment of policy
branches, staffed almost entirely by administrative officers, who would make policy,
and departments which would implement it.14 The division was never quite so clearcut because the separation between politics and administration implicit in the concept
is not how policy-making is usually made. The departments had long experience
of implementing policies and often firm ideas on what would or would not work.
Administrative officers in the branches were liable to transfer every three years or so
and had little specialist knowledge of the matters on which they were expected to make
policy. There were other important shortcomings in the reforms. The consultants called
for more programme and resource plans.15 But there was some opposition within the
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civil service, especially from the Finance Branch and from the administrative grade.
The Finance Branch was concerned that it might lose some control over resources. The
administrative grade preferred the generalist policy-making system of the past and was
reluctant to concede power to specialists.16

Power was more diffused after the reforms than under the old colonial system.
The Secretariat still remained the central policy-making body and the administrative
grade was still the dominant force in the formulation of policy. However, after 1984,
the British and Chinese governments were informally able to exercise vetos on policy
proposals in some areas. As the government itself became larger, the control exercised
by the Secretariat over departments was slightly diminished simply because the thin layer
of senior administrators was no longer able to supervise every aspect of government.
Power remained centralised but there were many more actors in the policy-making
process both within the civil service and outside it.

The institutional framework could not incorporate the emerging civil society
groups. Business people and professionals continued to be over-represented on the
Legislative Council; they dominated the advisory committees; and they were already
playing a significant role on the Executive Council. New pressure groups were underrepresented and it was difficult to include them because many were focused on the
political arrangements for the future, which were beyond the control of the Hong Kong
government. Policy-making, by default, remained in the hands of the civil servants
although they had difficulty, as 1997 approached, in persuading the Legislative Council
that their policies were the best solutions to the territorys problems.
Consultation and Participation

During the colonial era, consultation and participation in policy-making were restricted
and controlled in various ways. Until the 1970s, the location of power in an administration
supported by the most powerful figures in the business world and in Chinese society
meant that other elements of society were starved of access to the policy-making
process. There were no political parties and pressure groups were slow to develop.
When pressure groups did emerge, they tended to lobby departments, which did not have
final decision-making power. The Legislative Council was also largely excluded from
the policy-making process. Its members were sometimes influential behind the scenes
in advisory committees but their role was essentially to validate policy rather than to
formulate or criticise it. The Council was also entirely appointed by the Governor and
was consequently composed of supporters of the government rather than its critics.

Because expectations were limited, popular protests were not concentrated on the
governments policy shortcomings. Until the 1966 riots, demonstrations were seen as
aberrations from the normal condition of social stability and were dealt with by tighter
regulations. After MacLehose introduced his social policy reforms, political participation
increased considerably. This was encouraged by the government to the extent that it
sought to build its policies around consultation and consent. New policy initiatives
were often presented as green papers which were put to the public for comment. After
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a period of consultation, the government would issue a white paper which, it would
argue, reflected the views of the community. The system fell into some disrepute as it
gradually became clear that the government tended to ignore those views that did not
correspond with its own. The most significant case in which this happened was over
the issue of increasing the number of elected representatives in the Legislative Council
in 1987, but it was also true of other areas of policy-making, such as education and the
system for redressing grievances.17 The government did make more effort to consult with
groups affected by policy, but there were still institutional gaps in the ways in which
policy-making was conducted.

The government also had relatively little control over the new pressure groups that
began to emerge in the 1970s. Policy towards groups was based on regulation under the
Societies Ordinance and attempts to fragment the labour movement. One consequence
was the emergence of many small and fragmented groups and unions. There were
exceptions, such as the Professional Teachers Union, which was able to build a more
comprehensive organisation on the back of confrontations with the government over
the status of certified teachers and the closure of the Precious Blood Jubilee School.18
Although the government might have wished to include groups in the policy process in
a more meaningful way, it was increasingly constrained by the politics of the transition.
Neither the British nor the Chinese governments favoured more democracy for Hong
Kong in the 1980s. The Governors of the period, Youde and Wilson, tended to rely
upon traditional elites and the emerging democratic groups were excluded from the
process.

During the Patten years, consultation took rather different forms. Patten came
to office with a commitment to more open government and spent much more time in
discussions with legislators. As a result of the introduction of direct elections for some
seats in 1991, there was also much more bargaining between government and Legislative
Councillors. Yet political constraints on greater consultation and participation still
remained. The government wanted to include pressure groups in the policy process but
it could not afford protracted conflict with them at a time when relations with China
were tense and when public confidence in the future of the system was low. Its strategy
was to try to establish a value consensus for example, that the education system
needed to be reformed or that the quality of public housing needed to be improved
and formulated policies to meet those ends. But at points where it might be involved
in conflict with pressure groups, it tended not to force the issue. Policy-making in that
sense was symbolic; it could only be implemented provided that there were no groups
likely to engage in political or industrial action.
Policy Content
By content, we mean the nature of the policy outputs that are representative of the period.
Thus, following Lowi, we might describe the policies of the old colonial period as mainly
regulatory, those of the later colonial period as largely distributive and symbolic, and
those of the post-colonial period as largely unfocused but with elements of some of the
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policy-making concerns of the preceding systems.19 It should not be assumed that these
descriptions of policy-making encompass all policies made within a particular historical
period. There has been nonetheless a dominant form of policy-making in each period
which was determined by the factors that we have already considered, namely values,
the location of power and the institutional framework, and the nature of consultation
and participation.

Under colonialism, regulatory policy was seen to be the appropriate way to maintain
the stability of the regime. The Societies Ordinance, the Education Ordinance and various
labour regulations were used to control organisations, intervene in the school system, and
fragment trade unions.20 After the Second World War, regulatory policy was no longer
sufficient and the administration began to make grudging accommodations in health,
welfare, housing and education.21 The MacLehose reforms brought collective goods in
larger quantities: more school places, more hospital beds, increased social welfare, and
a greater likelihood of securing a public housing flat. This expansion of social policy
was a means of re-legitimating a regime that had singularly failed to provide adequately
in these respects in the 1950s and 1960s. It had the effect of heightening expectations
for even more, qualitatively better, collective goods.

After the 1984 agreement, policy remained largely distributive in terms of its overall
emphasis but also took on more symbolic aspects. Regulation changed from a concern
with control in the interests of maintaining stability to an attempt to ensure that standards
were met in the provision of services. A more sophisticated economy required different
types of regulation and important reforms were made, for example, in the banking
sector. The government also sought to build confidence in the future by other means:
by providing for a Bill of Rights and various forms of safeguards for civil liberties, by
creating new universities and by constructing a new airport. Policy was used symbolically
to persuade the people that post-1997 Hong Kong would be at least as prosperous and
pleasant as in the past. In addition, the government tried to avoid becoming embroiled in
contentious policy issues. In areas where it could not avoid making policy, the process
of implementation was designed to minimise conflict and to allow the government to
retreat if its proposed measures proved to be too controversial.22
The Rational Policy-Maker

The political pre-conditions which aid rational policy-making include: government
monopoly of the policy agenda; restrictions on the influence of the population on the
way that decisions are made and the insulation of decision-makers from the political
process; centralising the decision-making system to control resources and to attempt
to avoid the development of potentially conflicting policies; acting authoritatively to
reinforce the image of a government in command; and trying to match policy outputs to
the prevailing political circumstances. How did these political pre-conditions translate
into rational policy-making? Did the policy-makers hold a set of beliefs about the best
way to make policy? If so, what were those beliefs?
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In the course of the research for this book, interviews were conducted with 32
senior officials from seven different policy bureaus and sixteen different departments and
statutory bodies.23 All had held high office in the final years of the colonial administration
and continued in senior positions after 1997. Seventeen of the 32 were administrative
officers and had been transferred between bureaus, departments and statutory bodies
in the course of their careers. What follows is a distillation of their beliefs about how
policy should and should not be made.

A critical feature of successful policy-making, although few of the interviewees
used the word, was that it should be rational, that is, that the governments response to
a problem should be appropriate to provide a solution to present or future difficulties.
The respondents drew attention to the need to ensure that there were adequate financial
resources, that alternatives had been considered, that the problem had been properly
discussed with all the relevant stakeholders, and that proper homework had been
undertaken to stave off criticism and to defend the policy proposal against charges that
there were better ways to proceed. The means to achieve these conditions for successful
policy-making varied according to the nature of the problem. In some cases, the policymakers sought expert advice; in others, they surveyed public opinion; in still others,
they undertook pilot schemes or conducted experiments. In each case, however, the aim
was to construct a case for change as watertight as possible or, alternatively, to put the
issue before the public in such a way that the problem was canvassed and the options
presented, usually with the government making its preferred position clear.

A second element that was heavily stressed was the need for flexibility. One
respondent quoted with approval the words of a long-standing Executive Councillor who
advised policy secretaries that they should always give themselves room to wriggle.
In fact, in the last years of the colonial administration and after the handover, policy
secretaries found it difficult to take unequivocal positions because the nature of the
political process meant that criticism of their role was more intense than it had ever
been before. The view of some respondents was that there should initially be a preferred
government stance but that fall-back positions and contingency plans for changing
circumstances were a necessary part of the process.

A third element was that the policy-maker should keep his or her distance from the
politics of the policy process. Dont eat with your chin said one highly experienced
official, meaning that the policy-maker should avoid becoming part of the public debate
until an authoritative decision was required. This was, of course, part of the colonial
culture of maintaining distance from the population. No government likes to back
down on policy but there was always the suspicion that, if a colonial government did
so, the legitimacy of its rule might be called into question. Decisions were generally
not negotiable once the government had put its prestige on the line. The notion of
distance from politics was also related to decision-making within the government. Most
respondents believed that they should be politically neutral in the sense that they should
give the best policy advice that they could. But there were concerns that this was
being undermined in the post-1997 period. Many noted that politics were determining
decision-making to a greater degree than in the past and that, implicitly, the best
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decision was not always reached because of considerations of political expediency. The
ideal administrator was one who could distance himself or herself from the process and
arrive at rational decisions after appropriate consultation with other policy actors.

In the following case study, we consider the application of rational decision-making
to a volatile political issue. The methods used to deal with the problem are largely derived
from long-standing beliefs in the value of rationality, flexibility and distance in dealing
with policy problems.
Rational Policy-Making: Reducing Social Security Assistance Scheme

The Comprehensive Social Security Assistance Scheme (CSSA) was introduced in 1993,
replacing a public assistance scheme which had provided only the most basic of social
security benefits. The new scheme was rather more generous although it was constructed
on a philosophy that was very similar to the one which had preceded it. Social security
would be given to those who were needy in order to raise their incomes to meet essential
requirements. The benefits were means-tested and all able unemployed people between
15 and 59 years of age were required to register with the Labour Department for job
placement. The scheme provided for a range of standard rates for different categories
of applicants, for rent and to meet special needs. At the end of 1993, there were 92,000
CSSA cases compared with 79,700 public assistance cases in the previous year and
expenditure on the scheme was $2,073.8 million, an increase of 54.9 % over the previous
year.24 CSSA cases rose from 92,000 in 1993 to 195,645 in 1997.25 The most significant
increase in the number of new cases was in the unemployed whose numbers rose from
3,876 in 19931994 to 14,964 in 199697.26 The increase came at a time of almost full
employment in Hong Kong and suggested that those who were claiming unemployment
benefits might be doing so because the payments were more attractive than working.27

In Tungs first policy address, he announced that there would be a review of the
CSSA system and stressed that we should not remove the incentive to work.28 From
the outset, the agenda for change was controlled by the civil service. The Steering
Group which conducted the review was chaired by the Director of Social Welfare and
its membership, with the exception of one member from the Employees Retraining
Board, a statutory body, was composed entirely of civil servants.29 There was no outside
representation from those who might be affected by its decisions or from organisations,
such as the Hong Kong Council of Social Service, which might have been expected to
speak on behalf of the disadvantaged. Controlling the agenda meant that the Steering
Group could define the problem. There was, it said,
growing public concern about the rapid growth in the CSSA caseload
and its expenditure, the high level of CSSA benefit for larger families as
compared with market wages, and sharp increases in the number of people
of working age turning to CSSA. There is also an increasing perception that
some people are abusing the system and as a result of this, increasing calls
for the Government to take more measures to prevent such abuses.30
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The identification of the problem was accompanied by supporting statistics: the number
of CSSA cases had increased by 146% between September 1993 and September 1998;
expenditure had grown three-fold and was certain to rise still further; benefits were
becoming more attractive because of the slow growth in wages; and CSSA payments
for a family of four or more were considerably higher than low-end wages.31

The definition of the problem in this way rested on some assumptions about the
motives of the recipients and pointed to possible solutions. The Group felt that there was
a tendency for some employable adults to consider reliance on welfare assistance as
a preferred option even when there is employment available.32 Clearly, this conflicted
with the long-standing value that welfare would be provided only for so long as it
took to return the able-bodied to the workforce. The solutions offered by the Steering
Group, therefore, took aim at the unemployed and at benefits enjoyed by families which
exceeded the wages of low-end workers. The proposals included slashing benefits, new
programmes under which the unemployed CSSA beneficiaries would engage in unpaid
community work, re-assessment of the asset limits for the unemployed, provisions
to terminate CSSA benefits if the recipient refused reasonable employment, and
strengthening existing arrangements to prevent fraud.33 Even these measures, the Steering
Group warned, would not prevent the growth in CSSA expenditure from increasing to
the point where it was unsustainable.34

Their predictions proved to be correct. With the subsequent economic downturn,
more poor migrants from China and growing number of elderly recipients of CSSA, the
number of applicants and government expenditure rose dramatically. The number of cases
increased from 195,645 in 1997 to 288,648 in October 2003.35 The budget increased
from $2.4 billion in 1993 to $9.4 billion in 1998 to $16 billion in 2002.36 In the years
immediately following the implementation of the Steering Groups recommendations,
it appeared that the measures had some effect in discouraging new applicants for
unemployment benefits. The number of new cases rose to 31,942 in 199899 but
stabilised thereafter and even dropped in 2000.37 But the number of low-earnings
cases, whose incomes were supplemented by CSSA, continued to rise, suggesting that
the slowing growth in wages and the benefits provided under CSSA were beginning
to come closer than the government wished. As economic conditions worsened, the
number of unemployed CSSA cases rose sharply. By September 2003, there were 51,372
unemployed cases, nearly double the number in March 2000.38

The government faced a potentially explosive situation. Any move to cut benefits
further might have resulted in an even greater loss of political support and the growth of
protest movements. On the other hand, expenditure on the CSSA was clearly spiralling
out of control. In October 2002, the Director of Social Welfare, Carrie Lam, put the
governments case in an article in the South China Morning Post.39 The tone was
coolly rational. The problem was presented as one which was not simply a matter for
the government but for the society, a concern with how welfare provision should best
reflect the values of the community. The community, wrote Lam, is compassionate
towards the vulnerable when the economy is good and public finances permit [but]
expects vigilance by the administration in guarding CSSA from becoming a preferred
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alternative to work.40 She then presented figures which showed that, as a result of
negative growth in the economy the actual purchasing power of the CSSA was 12.4 %
higher than at the time it was set in 1996. She concluded:
The issue now is whether CSSA rates should be reduced to restore purchasing
power to the intended level, freeing up existing resources to help an
anticipated increase in applicants. On a broader front, with the growing
number of elderly, and an increasing number of low-income families, what
should be done to ensure CSSA will continue to provide a strong financial
safety net for the most vulnerable? These are questions on which we welcome
public views.41
In fact, of course, the government had firm views on the direction in which it should
proceed; it had framed the agenda and established what it perceived to be the principal
problem that required attention; it wanted to reduce CSSA benefits by 11.1%. The
invitation to the public to comment was not because the government was uncertain of
its preferred policy direction but rather because it had to gauge whether the political
effects of the reduction might potentially spill beyond the confines of the particular
issue to a wholesale indictment of an unpopular regime.

Over the next few weeks, the debate intensified. On 11 November, the Director of
Social Welfare met with the Legislative Council Panel on Welfare Services, some invited
individuals and representatives of ten pressure groups and the Hong Kong Council of
Social Service to discuss the CSSA issue.42 She stressed that the administration had
not yet come to a view on whether the CSSA should be adjusted downwards by 11.1%
although she explained how that figure had been calculated. The pressure groups and
many legislators were, as might be expected, mainly opposed to any reduction. In
her concluding remarks, the Director sought to address some of their concerns. She
emphasised that the effects of deflation on wages and the CSSA benefits had been
calculated in a methodical manner, that the government had always drawn a distinction
between the able-bodied who could work and those who could not, and that the reduction
was not about the budget deficit and saving money but about distributing benefits more
equitably.43

A few days after the meeting, Christine Fang, the Director of the Hong Kong
Council of Social Service, a government-funded statutory body that acts on behalf
of subvented welfare organisations, challenged many of the governments central
assumptions.44 She noted that almost 80% of CSSA recipients were elderly, disabled or
infirm or single parent families, few of whom had chances of finding work, and that the
unemployed had been unfairly maligned. People who lost their jobs did not immediately
turn to the Social Welfare Department; only 14.3% of the unemployed received CSSA
benefits.45 She also cast doubt on the central plank of the governments argument that
CSSA benefits were too high, claiming instead that wages were too low and would be
pushed lower if the CSSA was cut. In place of reduced benefits, Fang suggested that
there was a need for a comprehensive review of the CSSA system and that reductions
in benefits should not be treated simply as a budget deficit issue.
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The Democratic Party and the major unions, who regarded CSSA recipients as their
constituents, were also highly critical of the proposed course of action. The government,
however, remained steadfast. The changes, which reduced the standard rate allowances
for the able-bodied by 11.1% from June 2003 and the benefits for the elderly, disabled,
and infirm by the same amount in two phases, starting in October 2003, were approved
by the Executive Council in February 2003.46 The day following the announcement, a
motion without legislative effect was introduced into the Legislative Council opposing
the cutbacks in welfare benefits for the elderly, the vulnerable and the disabled.47

There were some differences between the parties on the proposed measures. The
Democratic Party argued that it was wrong in principle to cut benefits again when they
had already been cut following the 1998 review.48 The DAB, while supporting the
adjustment downwards, argued that it should not apply to the elderly and the disabled.49
The Liberal Party, which supported the provision of CSSA benefits for the elderly and
the disabled although not for the unemployed, favoured the course of action proposed by
the government.50 Frontier was opposed to the cuts on the moral ground that they would
detrimentally affect the quality of lives of the recipients.51 The government remained
unmoved. The Secretary for Health, Welfare and Food noted that the measures should
not be regarded as welfare cuts but rather an effort to return rates to their original
intended buying power so as to ensure the financial sustainability of our social security
system.52 The motion condemning the cutbacks was passed without dissent and 90
pressure groups later demonstrated against the governments action.53 But the planned
reductions went ahead and were given legislative effect with the passage of the budget
in April 2003.

The reduction in CSSA rates stands as an example of successful policy formulation
and implementation in difficult times. Why did the government succeed in this instance
when it failed in so many others? Each of the characteristics of rational policy-making,
identified earlier in interviews with senior officials, was present in the process. First, the
government controlled the agenda and focused its energies on a specific change. The
Director of Social Welfare did not allow herself to be deflected into other conceptions
of the problem or even to enter the political fray to debate them. She defended the
proposal with an array of statistics and with such vigour that she became known, to
her annoyance, as the figures lady. Figures, she said, have helped me to convince
others when implementing some policies. We could not solve problems with emotions
alone.54 The proposal was carefully explained, placed in the context of the governments
overall welfare policy, and always defended in terms of the greater equity that would
ensue from a re-distribution of benefits to new, deserving applicants. It was not only
presented as a logical and rational course of action; it was presented as the only logical
and rational course of action.

A second characteristic of rational policy-making identified in the interviews with
senior officials was flexibility. The government made its views known on its preferred
proposal from a very early stage. It did not, however, finally commit itself to a course
of action until the final inclusion of the reductions in the budget. Even in the motion
debate in February 2003, the Secretary for Health, Welfare and Food still spoke of the
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reductions as a proposal. Flexibility also meant listening to the proposals from interested
individuals and pressure groups although the government made few concessions. It
delayed the cuts to non-able-bodied recipients to October 2003 and October 2004, a
similar strategy to that employed over civil service pay reductions. But there were no
other substantive concessions to any particular group of CSSA recipients.

Finally, the Director of Social Welfare was careful to keep her distance from the
political process. She did meet with pressure groups and representatives of the political
parties but she did not bargain with them. Rather, she saw her role as listening to their
proposals and arguments, perhaps with a view to developing contingency plans should
they have proven necessary. In the event, the reductions to the CSSA came when the
government was considering implementing Article 23 and when SARS was becoming
a serious problem and these developments soon took centre stage. The success of the
governments proposals was also aided by the division within the parties and pressure
groups. In comparison with the range of other options available, the governments
proposal had the advantage of clarity, political appeal to the values of hard work and to
the development of programmes returning recipients to gainful employment, sensitivity
to equity and future requirements of the welfare system, and a continuing emphasis on
the traditional virtue of fiscal frugality.
Politics and Policy-Making after 1997

Although rational policy-making has persisted in the post-handover system, particularly
in areas less controversial than reductions to welfare benefits, it is better suited to
systems where policy-makers can remain aloof from the politics of the process and
retain control of the agenda. In the post-handover system, with the difficulties inherent
in the institutional framework and the increased politicisation of the policy process,
a new mode of making policy, rather closer to the conditions underlying Kingdons
three streams approach, began to emerge. In the following sections, we examine the
characteristics of the approach and compare it, using the example of the governments
attempt to merge universities, with the rational approach.
The Post-1997 Policy Agenda

What values does the post-1997 government seek to realise through policy? And how do
these differ from those that it inherited? In his first policy address in October 1997, the
Chief Executive stressed many of the values that we have already identified: government
was to be even more proactive in meeting the needs of the business community; the
new political system would promote political stability; government would look after the
interests of the population by making policy in many different areas; law and order would
be maintained; and the administration would continue to deliver policy outputs efficiently,
effectively and economically.55 Aside from stressing that Hong Kong was now part of
China, the 1997 policy address might have been delivered by a British Governor.
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Within a few years, the tone had changed. In his re-election speech, Tung claimed
that the government had successfully taken a different direction since the handover
although he conceded that some of the policy initiatives might have been handled
differently.56 There was more stress on the need for economic re-structuring, of enhancing
relations with China and of re-vamping the structure of government.57 The problem was
that the administration faced an economic crisis virtually from the moment it assumed
office and this placed many of the traditional regime values to which the political
executive subscribed under threat. Thus, for example, the Chief Executive, most members
of the Executive Council and many members of the Legislative Council were in favour
of more de-regulation and small government. But the economic crises led to calls for
more government intervention and help in times of hardship. There were signs that the
government itself was not adverse to intervention under some circumstances.58 But this
left the basis on which policy was to be made somewhat ad hoc and without the more
consistent regime value parameters that had characterised the colonial government.

Similar problems arose with establishing values authoritatively on the agenda.
Because the government was under challenge from many different quarters and lacked
support from the public, it found the process of introducing policy changes much
more difficult than it had anticipated. Alternative policies were being canvassed in the
legislature and often enjoyed the support of the voting public. One former legislator,
Christine Loh, for example, through the think tank, Civic Exchange, produced an annual
alternative policy address which picked up many of the issues that democrats wanted
to see on the agenda.59 The disarticulated political system of post-1997 Hong Kong
enabled such values not only to be expressed but also to gain support and to act as an
impediment to the realisation of the governments own goals.60 The government was
not entirely in control of its own agenda.
The Institutional Framework

The institutional framework inherited by the new political executive after 1997 was
deficient in a number of important respects. The Basic Law did not specify sufficiently
how institutions would co-ordinate policy. Rather, it was assumed that they would
co-operate. In the event, there was considerable friction between them. Under Tung,
the executive was not unified and there were major differences in approach and values
between the business and professional appointees on the Executive Council and senior
civil servants. The businessmen wanted change within the civil service which would
improve efficiencies and reduce costs and they saw the civil service as an obstruction to
rapid change. They wanted new policies that would aid business, including government
initiatives with the private sector, and more cost-effective delivery of social policy
outputs. Senior civil servants may not have been directly opposed to those aims but
they wanted policy to continue to be driven by the civil service with careful attention
to rationality, costs and strategies for implementation. This resulted in a struggle on
some issues between Executive Council members and senior civil servants over policymaking style with the Councillors favouring new, sometimes uncosted, ideas, and the
civil servants preferring to rely on well-established procedures.
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One of the consequences of a disarticulated system is that power is diffused rather
than centralised. As Kingdon remarks, under such circumstances, policy ideas may come
from anywhere but may still have some prospect of reaching the agenda.61 Whereas
under colonialism, the senior civil service held a monopoly over which proposals would
succeed and which would fail, in post-1997 Hong Kong, ideas could be picked up
from any one of a number of sources: pressure groups, political parties, the Legislative
Council, the political executive or the Chinese government. The prospects for their
formulation into tangible policies could be increased by endorsement from either the
civil service or the political executive where they might then follow either one of two
routes. The first would see the proposal move through the civil service and eventually
be presented for public discussion with the agreement of the political executive.
Alternatively, policy might be generated from the top down by the political executive.
The latter route appeared to become more prevalent after the introduction of the Principal
Officials Accountability System in July 2002. The problem was that top-down policy
announcements tended to unravel in the process of turning them into a concrete set of
proposals for implementation.

The disarticulated system meant that institutions were poorly co-ordinated and
did not work together to formulate coherent policy. After Donald Tsang became Chief
Executive, there was some attempt to improve policy co-ordination by defining lines of
command and lateral communication more precisely. But while the government began
to act more as a team than it had done under Tung, its policy capacity did not greatly
increase. The problem lay at the interface between government and civil society. The
governments proposals were generally better thought through under Tsang, and it
remained highly competent and efficient in administering existing policies, but gaining
public acceptance for new policies remained as difficult as ever.62
Consultation and Participation after 1997

The post-1997 government did not initially believe that it faced the same constraints
as the transitional colonial administration and it soon sought to address some of the
policy issues that had been swept under the carpet. Its problem, as gradually became
apparent, was that it did not have a mandate. In a disarticulated system, groups could
claim that their policies were more sensible than, and just as authoritative as, those
of the government. In education, for example, the government was faced with a
shifting coalition of opposition, depending on the issues at stake. On benchmarking
the curriculum, the school-based management system and mother tongue teaching, the
Professional Teachers Union, individual teachers, churches, parents and even students
were in conflict with some aspects of government policy.63 Moreover, because the
governments policy intentions were less ambivalently stated than during the transitional
period, there was an opportunity for pressure groups to make their case to the general
public rather than agree to a government-engineered consensus. The situation was
further exacerbated by the tension between the government and the Legislative Council,
particularly immediately after the handover when Councillors felt that they were not
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being adequately informed by the government. The Council became a sounding board
for those who had policy positions opposed to the government. Other pressure groups
took to the streets to articulate their demands.

The government did not attempt to ram its policies through without consultation.
The formal aspects of the consultation process remained in place. The green papers
of colonial days were replaced by consultation documents on many different aspects
of government policy. These included, for example, the decision to abolish the Urban
and Regional Councils, the decision to introduce anti-subversion and anti-secession
legislation under Article 23, matters relating to executive and advisory bodies in
education, the development of traditional Chinese medicine, the goods and services tax
and healthcare financing.64 Despite its commitment to the formal consultative process,
the Tung administration was also prone to making announcements from the top which
arrived on the agenda without prior consultation or notice. In the decision to provide
85,000 flats a year, which was later abandoned, in its educational policies, in the
decision to create a cyberport and to provide government funding for the construction
of a Disneyland, in the bid for the Asian games, and in the announcement of proposals
to merge the Chinese University, the Hong Kong University of Science and Technology
and the Hong Kong Institute of Education, the government simply laid out its proposals
and ultimately bore the wrath of a highly critical public.65 In a remarkable mea culpa
in 2005, Tung admitted the shortcomings of this approach. He said:
In formulating policies, we fell short of thinking what the people think and
addressing peoples needs...we were not sufficiently mindful of the impact
of some policies on the community... and the potentially controversial nature
of those policies. We introduced too many reform measures too hastily...
We also lacked a sense of crisis, political sensitivity as well the necessary
experience and capability to cope with political and economic changes. We
were indecisive when dealing with emergencies. These shortcomings and
inadequacies have undermined the credibility of our policy-making capability
and our ability to govern.66

After Tsang assumed office, there were efforts to establish more consultative
institutions at the centre, in particular, the Commission on Strategic Development,
which had existed under Tung but was now expanded and charged with making policy
formulation more scientific and transparent, and the Commission on Poverty which
was to make policy recommendations to prevent and alleviate poverty and promote
self-reliance.67 Neither body achieved the aim of producing solutions to problems that
could be implemented as policy.68 Rather, they tended to reflect the conflicting values
of representatives selected from different parts of the political spectrum. What perhaps
offers more hope of resolving the impasse in making policy is civic engagement with
those directly affected by new proposals. To date, the government does not appear to
have a consistent approach on civic engagement. On some issues, it consults widely
and interacts with stakeholders; on others, there appears to be very little consultation.
Research suggests, however, that the more the government talks to relevant groups,
the more likely it is to arrive at a satisfactory conclusion.69 Civic engagement seems to
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work to the extent that it brings public attention to the issues and involves some actors
in the process although there are still problems of trust and government domination of
the agenda.70

The difficulties in bringing new policies into effect are shown in Table 8.1. In
all but one of the cases listed, opposition to government policy has either delayed or
prevented the introduction of the policy. The exceptional case of the implementation of
soccer betting suggests that policy acceptance is sometimes more a matter of fortuna
than of rational calculation. Had the DAB not split on the issue, the Legislative Council
would have rejected the governments proposal. Another example, which also illustrates
Kingdons theories, is the introduction of legislation to ban smoking in public places.
In 2001, in difficult economic conditions and opposition from the catering industry, the
government did not proceed with the legislation. Four years later, in a time of greater
prosperity, virtually the same proposal was approved by the Legislative Council.71 In
Kingdons terms, there had been no coupling of the problem, politics and policy streams
in 2001; by 2005, there was a window of opportunity through which the policy could
be introduced. In the case of small class teaching, the government initially approached
the issue in a rational manner and employed a consultant to examine the effects of small
class teaching in a pilot study. He found that small class teaching had little relationship
to improved learning except for the mentally disabled.72 The government, under pressure
from legislators and teachers, decided nonetheless that it would proceed with the
proposal. In two other cases the Independent Police Complaints Council Ordinance
and the Race Discrimination Ordinance there was fierce criticism of the governments
proposals and the bills were probably only passed because legislators felt they would
make some improvements to the existing situation, even if fundamental issues had been
ignored. In each of these instances, policy was being made in a highly politicised context
which created the conditions in which no government proposal is authoritative and may
subsequently be abandoned, delayed or implemented with considerable modifications.
Policy Failures and Policy Fiascos

A policy failure refers to performance defects of any size or seriousness which may
or may not be politicised whereas a policy fiasco refers to situations where there is
subjectively significant social damage and that are highly politicized.73 Governments
usually seek to minimise the damage from policy failures so that they do not turn into
policy fiascos. This has been difficult in Hong Kong since 1997, partly because the
political system is not able to contain demands or to reduce adverse criticism in the
ways that were used by its colonial predecessor.

How do we explain these failures which turned into fiascos? As we have seen, a
critical factor has been the rise of civil society organisations and their importance in
ensuring the success, or otherwise, of a policy proposal. There are always alternative
policies waiting in the wings or, to put it another way, government policy proposals
are not regarded as authoritative. Why they are not regarded as authoritative may relate
in part to the style in which they are presented although it may also be a function of a
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Table 8.1 Selected Policy Issues: Problems of Process and Implementation

Start Date
Issue
1980s
Healthcare financing

1990
Constitutional reform

1992
Small class teaching

1996
Independent Police

Complaints Council

1999
West Kowloon Cultural

District project

2002
General Goods and

Services tax

Process
Implementation
Continuing political
debate
Not yet
implemented
Many commissions,
proposals, no resolution
Experimentation,
political promises
Legislation was
eventually passed
in July 2008
Not yet
implemented
Not yet fully

implemented
Implemented but
some critics remain
dissatisfied
Long delays, complaints Still pending

over lack of public
consultation, tender
procedures and design
The government
withdrew its proposal
after consultation
showed strong
opposition
Not implemented
Massive opposition.
Street demonstration
of 500,000 people
Not implemented
2004
Amendments to

domestic violence

legislation

Bogged down in
Legislative Council
committees but
amendments to the
Domestic Violence
Ordinance were
eventually enacted
in June 2008
Approved but
continuing debate
over how it should
be implemented.
2005
Business opposition
2002
Harbour reclamation

2003
Legislating Article 23

of the Basic Law

Passed the Legislative

Council but court cases
and continuing
opposition from
environmental groups
Only partially
implemented
2003
Soccer betting
118 groups opposed

Implemented but
only because DAB
split on the issue
2004
Race discrimination

Implemented but
many critics remain
dissatisfied
Competition policy
Legislation passed
seemingly exempting
government from its
provisions
Still pending
Sources: This table has been constructed from a wide range of primary sources, many of which
may be found at www.legco.gov.hk/database/english/full.htm.
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disarticulated system where it is quite likely that legislators or political parties or civil
society organisations will have alternative agendas. This can be contrasted with the style
of policy-making under colonialism where the process was closed and controlled and
where policy statements, once made, were regarded as definitive. This older style of
policy-making persists when issues are not controversial. Where the political executive
is not directly involved or where it chooses to follow a less public course of action and
where public suspicions have not been aroused, it is still possible to make policies that
proceed in more orderly fashion through the stages that we have identified.

The problem for the government is that almost all issues are at least potentially
controversial. The dynamics of the post-handover period have made the process much
less rational, much more difficult to bring new policies on line, much more determined
by immediate political considerations, and much more likely to fail at the implementation
stage. In the following case study, we examine some of the weaknesses of policy-making
under conditions where a rational, controlled approach was not followed, where policy
directives were issued from the top, where there were entrenched stakeholders who
were not consulted, and where the characteristics of rational policy-making precise
identification of the problem, flexibility in seeking a solution, and distance from the
political process were either not observed or not possible.
Policy-Making in a Disarticulated System

In the interviews with senior officials, the point was frequently made that the policy
process had become more political. Most of the examples provided were either of
uncosted policy proposals emanating from the Executive Council or from its decision
to treat a problem in an entirely different way from that intended by the civil service.
The Legislative Council was also seen as a body which had considerable influence
over policy although usually, from the standpoint of the respondents, in a negative
way. Pressure groups were regarded as important to the success of the implementation
process and in some, but not all, bureaus and departments they were part of a regular,
institutionalised consultative forum.

With the introduction of the Principal Officials Accountability System in July 2002,
top-down pressures on the civil service intensified. One of the intentions of the new
system was to increase co-ordination in policy formulation and to make implementation
more effective.74 This was a response to the policy failures of the previous period and
may have been taken as an implicit criticism of the way that the civil service was making
policy. Directors of Bureaus were supposed to be transformational innovators who would
resolve the problems that were afflicting their policy areas. This type of top-down policy
might be characterised as ideational in the sense that it seeks to bring about change
rapidly without too much concern for the details of implementation or for the possibility
of alternative courses of action; it is based on what seems to be a good idea at the
time. In Chapter 9, we consider several examples of good ideas that failed at the
implementation stage. In the following case study, we consider a good idea that did
not survive the policy formulation stage and examine the reasons for its failure.
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Merging the Universities

In 2002, Hong Kong had eight government-funded degree-granting tertiary institutions.
When the budgetary deficit became an issue, there were those who believed that eight
institutions was a luxury for a population of 6.8 million and that substantial savings could
be achieved by rationalisation. By that stage, the universities were jealous protectors of
their own autonomy. They were, moreover, somewhat insulated from sudden changes in
government policies by the University Grants Committee (UGC), a statutory body which
funded universities on a triennial basis, delaying the impact of financial cutbacks.

In October 2002, the Secretary of Education and Manpower, Professor Arthur Li,
who had previously been Vice-Chancellor of the Chinese University of Hong Kong
(CUHK), announced that CUHK, the Hong Kong University of Science and Technology
(HKUST) and the Hong Kong Institute of Education would merge.75 There was some
confusion about the announcement. It came during a press conference in which the
Secretary appeared to be testing the water for some new ideas in higher education. But
the announcement was not followed by a regular press release. There was no official
statement on the merger and there were few details available on how the Secretary
intended the merger to proceed. It was also unclear to what extent senior civil servants
in the Education and Manpower Bureau and the UGC had been consulted. What was
clear was that the Secretary was not basing his ideas for a merger on the savings to be
derived from economic rationalisation. He promised that there would be no redundancies
after the merger and based his case for amalgamation on the more nebulous goal of
creating a world-class university.76

The undefined goal of a world-class university raised questions about the status
of specific institutions and about the future of other universities in the SAR. There had
been only limited prior consultation with the Vice-Chancellors about the proposal and
none at all with the President of the Institute of Education or with the staff or students
of the two universities. Li described himself as only a matchmaker but he was also
reported to have said that if universities refuse the merger and ignore the entire well
being of Hong Kong, the government would take action and that the government
would force the merger through even if staff and students were opposed to it.77 Apart
from the political consequences of the decision, the Secretarys action appeared to
encroach upon the role of the UGC which had responsibility for tertiary institutions and
which subsequently set up its own working party to examine the question of institutional
integration.

There had been some discussion of the need for Hong Kongs universities to
aspire to international excellence in a report commissioned by the University Grants
Committee (UGC), the Sutherland Report, where the notion of a world-class university
was described as an elusive andresource intensive flower.78 The issue of whether
Hong Kong should have a world-class university and indeed what a world-class
university was soon became intertwined with the radical changes to Hong Kong higher
education proposed in the Sutherland Report which was adopted, with some additions,
by the UGC and the government. These changes included, inter alia, role and mission
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differentiation, a review of sub-degree programmes and de-linking university salaries

from civil service salaries, apparently because this was seen as a hindrance to recruiting
staff with world-class reputations from overseas.79 On 28 October, when the Legislative
Council Panel on Education wanted to question the Secretary on his merger proposal,
he was abroad and the discussion was postponed. The Panel soon turned its attention to
the very substantive issues raised by the UGC proposals.80 In its brief to the Legislative
Council on its proposals, the UGC did not support a merger although it did note that
the proposed changes to the higher education system might aid such a development and
that the Chinese University and the University of Science and Technology had set up
committees to investigate the possibility.81

In the interim, opposition to the merger had grown. Reaction to the Secretarys
comments in the universities was predictable. Staff and students at both universities
organised against the proposal and received wide support. A few days after the
announcement, a campaign at HKUST had already collected 250 signatures from staff;
of 649 students polled in all tertiary institutions, 65% were opposed to the merger.82 In
November, 1,707 of 2,000 HKUST students voted against the change.83 In December,
the Chairman of the HKUST Council announced that the university would not pursue
talks on the merger unless the government clarified a number of key issues.84 In the
following year, although there were signs that there was some support for the proposal
at the Chinese University, both staff and students at the HKUST and at the Institute of
Education continued to oppose it. In December 2003, in what looked to be another policy
reversal, Tung said that he did not think that eight tertiary institutions were too many.85
In January 2004, the UGC produced another policy paper on higher education which
carried forward its notion of role differentiation. Each of the degree-granting institutions
was to have a defined role to which they were expected to remain faithful and Hong
Kong was to play a role as an educational regional hub.86 There was no mention of
world-class universities but the UGCs Working Party on Institutional Integration
put the final nail in the proposal when it found that while a merger between CUHK
and HKUST might become viable at some point in the future, it should not be further
explored for the present.87

In retrospect, it is not difficult to understand why the proposal failed. What is more
interesting, perhaps, is to compare the way in which it was handled with the way in which
the Director of Social Welfare presented her case for the reduction in CSSA benefits.
With the merger proposal, the problem which the amalgamation of the universities and
the Institute was seeking to address was never very well identified. Even if a merger
had created a world-class university, it was not clear what particular benefits would
ensue for Hong Kong. There was also an alternative agenda. The UGC, backed by
the authority of the Sutherland Report, had proposals which would define the role of
the tertiary institutions more precisely and which would save the government money.
Its proposals were much closer to the governments thinking and did not involve the
potentially expensive re-structuring which would have resulted from the merger. And
although the UGCs proposals might equally cause unrest in the universities, they did
not come with the immediate political costs which the Secretarys proposal had already
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provoked. With the CSSA reductions, although there were real political costs in terms
of support for the government, there were also savings from reducing benefits which
could be used to provide for the expected increasing number of future CSSA applicants.
The proposals to merge the universities, by contrast, had the potential for many different
kinds of unintended consequences.

In terms of flexibility, although the Social Welfare Departments position on the
CSSA reductions was well known, the governments final commitment to that position
was delayed until the last possible minute. On the merger proposal, the Secretary made
a strong commitment to amalgamation and then appeared to put the entire weight of
government behind his proposal. He was perceived to be threatening to implement the
proposal in the face of considerable opposition rather than listening to opponents and
presenting cogent reasons for his stance. The consequence was that there was little
room for manoeuvre. The merger proposal was reduced to a zero sum game; either
implementation went ahead or it did not. No other options for merged departments or
cost-sharing without full amalgamation were explored. As the South China Morning
Post editorialised, however strong the case for merging some institutions may be,
Professor Lis top-down approach is not conducive to a rational discussion of its pros
and cons.88

In the case of the CSSA reductions, the Director of Social Welfare maintained her
distance from the politics of the process. She listened to the views of political parties and
pressure groups but declined to bargain with them. Unmoved to make major concessions,
she was thus able to retain authority to make the final decision while claiming to have
been consultative and open to persuasion. The Secretary of Education and Manpower,
too, maintained his distance from the politics of the process. But, unlike the Director of
Social Welfare, who made sure that the governments position was well argued in the
press and before the relevant committees, the Secretary did not have strong institutional
support for his proposal. He was unable to argue his case before the Legislative Council
Panel on Education and no papers on the merger appear to have gone to the Executive
Council. He did not present his own case in the media but rather relied on it to report
his views which it did extensively but not always, apparently, with accuracy.89

Distance from the political process is important to preserve the authority of the
decision. However, for the decision to have authority, institutional support for the policy
stance needs to be in place. Despite the Secretarys strong position on amalgamation,
there was never clear institutional support from other parts of government or from
the Legislative Council or other policy actors. The UGC eventually emerged with an
alternative agenda. The authoritative nature of a decision depends in part on the surety
that it will be implemented. Much of the difficulties of policy implementation in the
post-handover period derive from the lack of authority behind the decision. In the case
of the CSSA reductions, the authority existed because the principal actors knew that
the government could attain its ends by simple budgetary provisions; in the case of
the merger, those responsible for implementing the proposal were beyond the reach of
government and, in many cases, were opposed to the proposal.
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It is perhaps helpful to think of the policy process in Hong Kong as a continuum. In
its initial form, the state dominated the formulation and implementation of policy with
little reference to the society or those affected by its actions; policy itself was action
taken in support of maintaining stability and colonial rule and it was made rationally with
those interests in mind. In the reformed colonial system, the state continued to control
the policy agenda although some attempt was made to incorporate community interests.
Policy continued to be made rationally but the focus shifted from regulatory policies
to distributive policies and, in the latter years of colonial rule, was sometimes more
symbolic than substantive. Stability and prosperity remained the governments mantra
although other values had become more important. In the mixed policy-making system
of the immediate post-1997 period, rational policy-making co-existed with ex cathedra
pronouncements on policy from the political executive, a government with low policy
capacity, a volatile political environment, and a disarticulated system which had the effect
of compressing issues of values, formulation and implementation into a single event
rather than a series of distinct stages. The government became less confrontational in
its approach under Tsang but many of the fundamental political problems remained.

Rational policy-making is based on the assumption that the political process can
be controlled and that appropriate, cost-effective solutions can be developed to resolve
problems. It is predicated on the insulation of policy-makers from partisan values which
may deflect them from arriving at economically rational decisions. The post-1997
system does not insulate policy-makers from political pressures. It is much more diverse
and pluralistic. While power is formally centralised, it is in reality diffuse. Successful
policy-making consequently depends on a window of opportunity, a fortunate political
conjunction of perceived problems with appropriate solutions. The prospect for failure in
such circumstances is much greater than in a controlled political system not only at the
formulation stage but also when policies have to be implemented in what is frequently
a hostile environment.
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Policy Implementation
n the previous two chapters, our attention was primarily focused on problems
associated with budgeting and with policy formulation. Traditional policy-making
models tend to assume that, if financial resources are available, if policy is properly
formulated, and if appropriate organisations are in place to achieve the intended
objectives, the actual process of implementation should be unproblematic.1 In practice,
this assumption is clearly not tenable. Many problems may prevent the realisation of
policy objectives: communication between the policy-makers and implementers may
be inadequate, objectives may be imprecisely stated, the means chosen to implement
the policy may be inappropriate or those affected by the policy may respond in ways
which had not been anticipated by its initiators. Indeed, because there are so many
different variables involved, some believe that perfect implementation is practically
impossible.2 Policy-makers, in consequence, cannot afford to assume that their work
is finished immediately after their proposals receive official endorsement. If they wish
to see their policy objectives actually achieved, they have to manage the process to its
desired conclusion. In this chapter, we look more closely at policy implementation:
what means the government uses to achieve its ends, to what degree it consults or
coerces to ensure that its goals are realised and how the results are evaluated both by
the government and those affected by its actions.

A critical variable affecting policy implementation in Hong Kong has been the
changing political context. Although there are still significant continuities in the
means of implementing and evaluating policies, the style of policy implementation has
changed considerably over time, often in response to political pressures. Prior to 1984,
the assumption on which government based much of its policy-making was that of the
traditional policy model: if the policy was properly formulated and properly costed, and
if it took into account real concerns and problems, then authoritative direction from
the government and efficient implementation by the civil service would ensure that
goals were achieved. In the decade or so before 1997, policy was implemented more
cautiously because the regime could not afford major policy confrontations with the
public when it was already embroiled in political and constitutional controversies over
the future of the territory. In the post-1997 period, implementation has become very
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problematic, partly because the government under Tung was initially more aggressive
in its efforts to implement policies, partly because the constitutional arrangements did
not allow for an adequate aggregation of demands or feedback on proposed government
actions, and partly because many of the good ideas did not come with a strategy of
implementation and were sometimes uncosted and not clearly related to other policies.
In addition, there has been concerted opposition to some policy measures not only from
established pressure groups but also from previously unknown organisations that emerge
in response to an issue. The government cannot always easily anticipate the force or
nature of the objections with which it will have to deal.

In this chapter, we consider three aspects of the process of policy
implementation:
policy instruments, defined here as the methods and techniques which governments
use to achieve their policy objectives;
strategies of implementation, which examines the major approaches of the colonial,
transitional and post-1997 regimes to implementation; and
evaluation, the way in which the Hong Kong government and the public assess its
policy performance.
Policy Instruments
Policy instruments may be classified in many different and complex ways which reflect
the wide range of methods that governments use to achieve their objectives.3 The macrolevel typology adopted here is a simple model derived from Etzionis division of power
into coercive, remunerative and normative types. Coercive power involves the use or
threat of force. Remunerative power implies the ability to control and distribute material
resources and rewards. And normative power, which might also be called persuasive or
manipulative or suggestive power, rests on the allocation and manipulation of symbolic
rewards.4 Following Vedung, we may develop this further into a three-fold classification
of policy instruments as regulations, economic means and information which correspond
to the kinds of power identified by Etzioni. Vedung goes on to note that these might be
called the stick, the carrot and the sermon, that is, the government may either force us,
pay us or have us pay, or persuade us.5

To illustrate these categories in the Hong Kong context, we can take some specific
examples, each of which has a prescriptive (positive) element and a proscriptive
(negative) element. Regulations (or the stick) may be used to encourage particular kinds
of behaviour; in this sense, they are prescriptive. Codes of conduct for civil servants, for
example, are designed to encourage appropriate behaviour but they do not usually have
an explicit sanction attached to them. Regulations may also be used to prohibit certain
kinds of behaviour with penalties, such as fines or jail sentences, for those committing
the offence; in that sense, they are proscriptive. It is an offence, for example, under the
Prevention of Bribery Ordinance to offer a bribe to a public official in Hong Kong. Even
where regulations are used in a punitive way, there is very often a moral component to
the intended outcome. Littering, for example, is an offence punishable by a fine. The
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Policy Implementation 203
policy objective is clearly to change public behaviour in the interests of achieving a

cleaner and more pleasant Hong Kong.

The economic policy instruments likewise may have positive and negative aspects.
The positive aspects (the carrot) often relate to programmes which the government
wishes to see introduced or expanded but which it does not have the capability to
provide. Examples are subsidising higher education places or the provision of specific
programmes in technology or in professional fields where there is a shortage of trained
manpower. The negative aspect of economic policy instruments is that the government
has to collect taxes to fund its programmes. This involves an element of coercion since it
is a crime not to pay taxes but it may also implicitly sanction certain types of behaviour.
For example, taxes on cigarettes and on companies that pollute the environment are
clearly designed to send the message that both are hazardous to health.

The final type of policy instrument, the provision of information or the sermon,
is the effort that all governments make to persuade their people to act in certain ways,
objectives which may also be achieved through the use of regulation or economic policy
instruments. With the sermon, the public information campaign is the governments
principal means of achieving its objective. The paternalism of the Hong Kong colonial
government in the 1970s, when it was engaged in extensive community-building, laid
the basis for the sermon to become a regular part of public life. Periodic publicity
campaigns covering many different subjects usually contain sermons which include
positive (encouragement) elements and negative (warning) aspects. The Leisure and
Cultural Services Department and the Department of Health, for example, run an
annual Healthy Exercise for All Campaign which encourages people to exercise
regularly and provides facilities for them to do so. The campaign stresses the health
benefits of regular exercise and warns implicitly of health problems if you do not do
so.6 Warnings are sometimes more explicit. The government has also launched annual
campaigns against dengue fever, a disease transmitted by mosquitoes. It advises people
that they should ensure that there is no stagnant water in their surroundings but it also
prosecutes individuals and companies when stagnant water is found on their premises.7
There are three messages that the government is attempting to convey: we have a
problem about which we are concerned; if you do not take heed of our instructions,
you could well contract the disease; and, if you do not take heed of our instructions,
we may prosecute you.

Macro-level policy instruments are often used in combination to address a particular
problem. In November 2002, the Hong Kong government announced that it intended
to legalise soccer betting.8 The problem, as the government saw it, was that illegal
and unregulated betting on soccer matches was already prevalent. It wanted to control
the problem by granting a licence to the Jockey Club to administer a system of legal
betting on matches. Penalties would continue to apply to anyone betting outside this
government-created monopoly (regulation). The tax on betting also had benefits for the
Treasurys depleted coffers which, it was expected, would stand to gain approximately
$1 billion per year in revenue from the tax (economic policy instrument). Finally, the
government sought to assuage the fears of the pressure groups that had come together as
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The Greater Coalition to Oppose Legalisation of Soccer Betting. A fund was launched
to help problem gamblers and new initiatives were to be introduced to provide more
public education and to warn teenagers of the dangers of gambling (information and
a sermon).9 The three types of policy instruments often come together because the
government is trying to address a number of separate issues and to reach a compromise
that will satisfy the public. It may need to regulate both present undesirable or illegal
activities and to provide possible alternatives and some guidance on future behaviour.
There are also likely to be fiscal implications at some stage of policy implementation and
this, too, must be considered in the form of additional and specific taxes or as subsidies
to promote what the government believes to be desirable outcomes.

The choice of policy instruments is based on the way that the government uses
power to achieve its objectives. But we may wish to go beyond this to ask questions
about the specific instruments employed to implement policy. When does the government
rely on its own resources and personnel to achieve its goals? When does it rely on
partnerships with subvented bodies or the private sector to deliver goods and services?
When would it rely on the private sector alone to do the work for it? The answers to
these questions are important because, if governments make mistakes and choose the
wrong instrument for achieving policy objectives or delivering goods and services, the
results can be costly failures.

Considering these questions in turn, we might say that the government has
traditionally chosen to rely on its own resources in limited areas that might be identified
with core government: management of the economy, law and order, constitutional affairs,
justice, water supplies and domestic regulation (maintenance of standards of hygiene,
hawker control, the issue of licences and registration of births, death, marriages and
companies). Increasingly, however, government has found itself drawn into the social
policy fields of health, housing, education and social welfare, not only as a purchaser
of services, as it would probably have preferred, but also as provider of those services.
Housing, education and social welfare, for example, are all public/private partnerships but
with varying degrees of involvement of the government. In housing, the government has
itself provided public housing although there has been a friction-laden relationship with
private developers over the amount of housing that should be supplied. In social welfare,
government has relied on subvented bodies which, although notionally independent,
can nonetheless be controlled through funding and other arrangements. In education,
the government has become involved in provision although it also subsidises private
schools. In health, the government has a major commitment, with the Hospital Authority,
to provide healthcare for a majority of the population. These relationships point to a
public/private or a public/subvented partnership that vary in the different social policy
fields and can change in character quite rapidly, as the 2002 decision to bring housing
policy more directly under the control of the governments Housing Bureau showed.
Finally, we might look at the governments relationship with private companies. The
major private companies presently involved in the provision of services are the transport
companies but utilities, such as gas and electricity, also provide services under schemes
of control.
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There are many structural forms available to the government when it brings into
effect a new policy or seeks to implement a major decision. The critical question is
whether it wants to implement the policy itself or find another provider, a statutory
body or a private company. Most decisions of this kind are made on precedent, that
is, whether there is a successful analogous relationship, either within government or
with the rest of the public sector or with the private sector. One criterion that became
important under Tung is the governments claim that it should consider whether the
private sector could be involved in implementation. The government sees itself as
business-friendly and officially maintains that the private sector has an important role
to play in implementation.10 This has had the effect of expanding relationships with the
private sector although recent adverse experiences may have dampened its enthusiasm
for those kinds of public/private partnerships.
Implementation Strategies
Once the government has chosen its policy instrument, there is the question of the degree
to which it will become involved in managing the programme to completion. If the
project is taken over by a statutory body or a private company the decision is taken out
of its hands and evaluation will tend to take place only after results have been achieved.
Within government, the ways in which departments might proceed to implement the
same programme could differ greatly in terms of the administrative values which the
strategy seeks to maximise, the level of attention paid to implementation once the
policy has been formulated, the extent to which instructions are clearly communicated,
the level of co-ordination between different government departments, the degree of
communication and consultation with affected parties, and the extent to which outcomes
are regarded as sufficiently important to use the coercive powers of the state to ensure
that implementation is as close as possible to the intentions of the policy-makers. With
each of these variables, there is the possibility that failure to attend to the issues involved
could lead to faulty implementation.

In any political system, policy is implemented in a variety of different ways. There
is no one single formula that applies across the board although there is often a dominant
style of policy implementation, usually determined by the nature of the political system
or by the objectives that the regime seeks to achieve. The variety of styles of policy
implementation is the result of two factors. First, appropriate methods must be adopted
to ensure success. Implementing a social policy, for example, requires rather different
structures and political skills than implementing infrastructural or security policies.
Second, departments build up historical knowledge about the best ways to deal with
policy problems. Even if the dominant style of policy implementation calls for policy to
be implemented in a new way, traditional reliance on structures and methods that have
produced results in the past is an important consideration. Routine policies that have
been established over many years usually continue to be implemented incrementally.
Any attempts to change them will normally require evidence that they are not working
and a readiness to make considerable political and administrative investment to change
the system.
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We can identify five systems of policy implementation that are currently in place
(see Table 9.1). Each system has been dominant, or partially dominant, at various times
in the past and has survived even though the prevalent style of policy implementation
has changed. We consider each of these in turn.
Table 9.1 Typology of Policy Implementation Styles
1. Top-down. Hierarchical and centralised structures with focused but limited policy-making
capabilities. Orders are transmitted vertically from the top of the organisational pyramid
and are expected to be implemented without question by those at the base of the pyramid.
There is often only limited communication or consultation with those affected by the
decision or policy.
2. Rational. Policy is formulated within a civil service structure, which maintains its
autonomy and distance from politics by co-opting elites. More attention is given to
planning, co-ordination and cost-benefit analysis than in a dominant top-down system
but organisational difficulties remain. Communication and consultation are limited to
elites at both central and local levels. Implementation takes place by stages with progress
evaluated on completion of each stage. Some top-down systems remain in place. Routine
policies, which the government believes to be satisfactory, continue to be implemented
with only incremental changes.
3. Symbolic. Policy implementation procedures are similar to the rational mode but
less use is made of the coercive power of the state to ensure implementation. More
extensive consultation is carried out with concerned groups although much of it does not
substantively affect outcomes. The government is less concerned with meeting objectives
than with avoiding friction with pressure groups and parties. Rational procedures remain
in place, as do some top-down systems. Routine policies, which the government believes
to be satisfactory, continue to be implemented with only incremental changes.
4. Disarticulated. The civil service attempts to implement policies rationally with attention
to planning, co-ordination, estimations of costs and the value of public investment.
However, unchannelled and disparate political demands increase as the policy-making
system itself becomes more porous. Demands from the political executive, pressure
groups, political parties and the Legislative Council require bargaining both to get policies
accepted and to try to implement them. Implementation becomes more difficult because
of post facto resistance from grass-roots pressure groups. Policy failures attributed to
the civil service reduce its authority and autonomy although top-down systems continue
to function and routine policies continue to be implemented with only incremental
changes.
5. Ideational. The political executive is strengthened in an attempt to resolve existing policy
difficulties with radical new ideas. The civil service is circumvented as the political
executive looks to providers outside the system to implement its ideas. No strategy of
implementation is developed but there is an expectation that those affected will work
together in good faith to implement the new proposals. In many other areas, however,
policy implementation is still carried out by government departments following more
traditional modes of operation. Under Tsang, more control is exerted over Principal
Officials who have less scope to act autonomously.
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Top-down
Law and order has always been a primary concern of the Hong Kong government. The
Police Force, the largest department, originally had a quasi-military structure and has
continued to be organised as a well-defined hierarchy. Other departments, too, developed
strong line capabilities and tended to implement policies without much regard for coordination with other departments.11 Co-ordination rested with the senior officials in
the Secretariat. They did exercise that power on occasions, particularly when financial
issues were involved, but the autonomy of the larger departments also meant some
duplication of functions. Both the Police and the Customs Departments, for example,
were given responsibility for implementing the anti-drug policy.12 Both had powers of
arrest but they tended to act so autonomously that, as anecdote has it, they sometimes
arrested the officers of their fellow department. Top-down implementation often results
in a sub-optimised perspective. It maximises one value the strength of the focused,
vertical organisation at the expense of another value, co-ordination between parts
of the civil service in pursuit of common goals. Top-down implementation need not
be associated with incrementalism but when a government has limited functions, as it
did for most of the colonial period, successful policies tend to become entrenched and
are subject to only minor modifications. The two major exceptions to the rule the
development of a public housing programme and the expansion of the government
provision of primary education serve as indications of what it took to break the topdown incremental mode.

In the case of the public housing programme, a major event, the Shek Kip Mei fire
of December 1953, presented the government with a reason to act although the issue
had been simmering for some time.13 Both the government and business elites wanted
the squatters off the land so that it could be re-developed for commercial purposes.
This conjunction of events, coupled with fires and health dangers in squatter areas,
created a policy window for the public housing programme. The policy represented a
radical departure from existing practice but, once established, the virtues of top-down
implementation again became apparent. Public housing blocks were very quickly erected
and land clearance was achieved with comparatively little resistance. In the case of
the expansion of the government provision of primary education from 1955 onwards,
the change of policy, from private to greater public provision, was sold as a campaign
against communism.14 Implementation of the policy was not quite as successful as the
public housing programme and initially fell short of its targets. The probable reason was
that the implementation of a social policy of this kind was difficult for a government
which did not place great value on either co-ordination or the role of professionals in
delivering services in public organisations.

Although the original character of the Hong Kong government has now been very
considerably modified, it should not be assumed that top-down implementation has
entirely disappeared. The six disciplinary services retain hierarchical structures in which
orders are expected to be obeyed and whose functions mean that a top-down strategy
may still be the most appropriate. Programme management in the Police Force, for
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example, has been described as a top-down approach because the strategic directions
are set at the force level by the Commissioner of Police and his two deputies.15 The
culture of the force, despite efforts to move away from the paramilitary nature of the
colonial force towards more community policing and a more bottom-up approach,
remains attuned to top-down implementation.16 Other disciplined services would appear
to have experienced similar difficulties in moving to less authoritarian structures. In the
Customs and Excise Department, for example, human resource management reforms
were implemented in top-down fashion whereas the theory of the changes implied wide
organisational consultation.17

Top-down implementation has been modified in most departments by the sharing
of responsibility for policy commitments with other departments and organisations in
related fields. Policy objectives frequently involve more than one bureau or department
and implementation must necessarily involve inter-departmental co-ordination and
consultation. The advantages of co-ordination and consultation are that they bring
different strengths to resolving problems and to achieving objectives. The disadvantages
are that they are more time-consuming because different values are represented in the
process which tends to slow down implementation. It is, of course, possible that topdown implementation could occur even with co-ordination and consultation between
departments. However, it is less likely to occur if hierarchical lines of authority are
disrupted by the need for lateral interaction with other departments which may have
different implementation styles. Within the Hong Kong civil service, there is still a
residual culture that sees top-down implementation by the department alone as the
appropriate way to achieve policy goals. This was reinforced by the introduction of the
Principal Officials Accountability System which initially resulted in more autonomous,
less co-ordinated departments. Subsequently, however, a greater emphasis on coordination and civic engagement appears to have slowed down both the process of
policy formulation and of implementation.
Rational
Under colonialism, because of the nature of the political system, there was time and space
for policy-makers to consider whether or not to take action and to debate appropriate
solutions to problems. The approach was rational and policy-making was undertaken
in stages. In the classical traditions of rational policy formulation, this tended to lead to
the assumption that, since policy had been so well considered, implementation would
follow automatically. This was reinforced by the epistemocratic nature of authority,
which attributed superior knowledge and vision to policy-makers, and by autonomous
departments with strong hierarchies accustomed to achieving their goals. The government
was also usually disinclined to admit that its policies might be misconceived and civil
society was as yet insufficiently developed to call it to account.

The expansion of social policy programmes in the 1970s clearly implied changes in
government structure. It was not possible to implement those programmes successfully
with the traditional colonial structure because they required more co-ordination, more
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planning and some feedback from those who were the beneficiaries of the new policies.
The McKinsey reforms were aimed at putting such a framework in place. Yet, although
the consultants stressed the need for greater co-ordination and planning, they did not
make any major recommendations in those areas. Consultative mechanisms, too, remained
more a matter of form than of substance. McKinseys principal recommendation, to
separate the policy-making functions in the branches (later bureaus) from implementation
by the departments, still permitted departments to continue to achieve their policy goals
using the old, top-down methods.

In the New Territories, for example, the building of the new towns was accomplished
on schedule in classical top-down style in the face of the very considerable difficulties of
clearing land and re-locating squatters. There was a co-ordinating committee under the
District Officer, which facilitated the process of physical construction, but little attention
was paid to the social needs of the new inhabitants.18 The result was that at first there
were far fewer tenants to take up the new housing blocks than had been expected. As
the official in charge of the New Territories observed, it had been too readily assumed
that once the buildings were up the job was done management not only of the
housing estates but of the whole town is of as great importance in improving the
quality of life.19 There were warning signs in other areas that a top-down strategy of
implementation could not be maintained indefinitely. Within the government, the labour
disputes with the civil service associations and with teachers in the mid and late 1970s
showed that groups were becoming more organised and more militant. In 1978, the
Education Departments decision to close the Precious Blood Secondary School, in the
wake of a financial scandal and demonstrations by students, showed some public support
for the more progressive syllabus that the school had been offering.20 The quantity of
social policy outputs was becoming less important than the quality of those outputs.
Although gradually more progress was made towards achieving greater co-ordination and
planning within government, the difficulty remained that too little attention continued
to be paid to the strategy of implementation. Two incidents in the implementation of
transport policy illustrate the deficiencies in the process. In January 1984, the Secretary
for Transport announced a 15% increase in first registration tax for taxis and an increase
in annual licence fees from $4,600 to $13,400. Taxi fares would also be increased as
some compensation for the new charges. Taxi drivers throughout the territory almost
immediately organised a go-slow protest which had the effect of bringing all traffic to a
standstill. In Mongkok, crowds began to assemble and eventually began looting shops.
Thirty people were injured, 25 buses were damaged and 130 people, mostly under the
age of 21, were arrested.21 When the Legislative Council re-convened, the bill to increase
first registration tax and licence fees was thrown out with the official members of the
Council abstaining.22

The taxi issue can be seen as a problem of lack of consultation with those directly
affected by the policy. The government, however, defended its implementation strategy.
The Secretary for Transport claimed that the Transport Department had held discussions
with the taxi operators23 and that he had no discretion to consult with taxi drivers
associations because Public Revenue Protection Orders, which was the form in which
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the first registration tax and the licence fees were introduced, had to be made before
the bill was presented to the legislature.24 Even so, the swingeing increases in charges
suggest a serious political miscalculation that might have been avoided if there had been
better communication with the taxi operators. The assumption, on which much of the
rational policy-making was based that the government had the means to implement
policy and that it would not be opposed by affected groups was now clearly shown
to be incorrect.

A second incident involving the implementation of transport policy showed
conclusively that the government could no longer expect that its rationally formulated
policies would necessarily receive public support. Electronic road pricing was seen as
a means to reduce traffic congestion in busy areas. The aim was to record the licence
plates of vehicles entering the designated zones at peak hours and to present their
owners with a monthly bill.25 Unlike the proposed increase in registration and licence
fees for taxis, there was much wider consultation on the plan to introduce electronic
road pricing. The Department put its case in the media and explained the scheme to
the District Boards. This produced four major objections: that the technology had not
been tested anywhere else in the world; that the billing system was an infringement of
privacy; that the government was simply trying to raise money rather than improving
the traffic situation; and that the cost of the project was too expensive. The government
backed down in the face of the criticism.

The issue of electronic road pricing showed that not only groups directly affected by
a decision but that groups from across society could be mobilised against a policy proposal
and could effectively prevent its implementation. The government learned its lessons
from the failure to implement the two transport policy proposals. It learned, particularly,
that it was dangerous to be committed too soon to policy goals and that it needed to
give itself more flexibility and options to reach its objectives. Policy implementation
became more of a winding road and rather less of a direct linear progression from the
determination of a policy objective to its attainment. The government needed to cover
its back if opposition to a proposal emerged and then to determine what cost it was
willing to pay to achieve its aim. That is not to say that the government was unable to
use the power of the state if it thought the goals were worth realising; rather, it sought
to reserve its strengths for other issues: constitutional battles, crises of confidence that
periodically afflicted the territory and the difficult issues arising from the transition to
Chinese sovereignty. Policy could continue to be formulated rationally but there was
less stress in many areas, particularly on social policy matters, on the importance of
actually implementing it. The rhetoric of policy, the affirmation of values arrived at
consensually, often became more significant than whether or not a new measure was
actually being implemented properly.
Symbolic
In its post-1984 manifestation, symbolic policy implementation can be seen in three
forms: in the avoidance of conflict over new social policy initiatives; in the slower pace of
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implementation of controversial policies; and in the creation of new organisations which

had the purpose of allaying the fears of the population about the future. Social policy
initiatives became more problematic, not only because of the changing political situation,
but also because, by the 1980s, the government had so successfully expanded the housing
supply, the number of school places, and healthcare and social welfare provision that
demands were increasingly for qualitative rather than quantitative improvements or for
the maintenance of existing benefits under threat. Public housing tenants resisted rent
increases;26 there were concerns that the government might move from near-universal
provision of medical services to user pays;27 and there was dissatisfaction among
professionals, pressure groups and some parents about the state of the education system.28
In terms of its administrative capacity, the government was less able to respond to
these social policy concerns than it was to meeting its traditional commitment to build
infrastructure, housing estates, and schools and hospitals efficiently and economically.
Its approach became more cautious and it tried to establish, through more extensive
consultation, that its values were indeed widely shared and that they would not generate
conflicts that could potentially jeopardise political stability.

The first form of symbolic implementation that of avoiding conflict is
particularly evident in attempts to implement new education policies. In the charged
political atmosphere following the signing of the Sino-British Agreement, the government
clearly felt that it could not afford more confrontations of the kind that had arisen with the
Professional Teachers Union and with the closure of the Precious Blood Jubilee School.
Its new strategy was to lay down a policy, often bolstered by the recommendations of an
external consultant or experience in other countries, and affirm values that corresponded
with demands for more quality education or more efficient school administration. In the
1980s and 1990s, many of these new initiatives civic education, the target-oriented
curriculum, the school-based management system, small class teaching, and the bridging
programme to enable children to move from Chinese to English language instruction,
for example were intended to show that government was committed to improving
the quality of education.29 Undoubtedly, the government would have liked to implement
these measures as quickly and as fully as possible. Unfortunately, from its perspective,
the stakeholders were a kaleidoscope of shifting coalitions, changing with the content of
the issues put before them. So it was quite possible that an issue that won the support of
parents, school principals and education interest groups would be less enthusiastically
endorsed by teachers and the union, or vice-versa, or that some other coalition would
emerge to counter the new initiative. At the critical point of implementation, the
government often did not insist that its policy should be fully enacted because it feared
some form of disruption that might prove politically embarrassing. New measures were
half-implemented or not implemented at all.30 The consequence was that teachers, in
particular, became somewhat cynical about reforms that kept everybody busy but
amount[ed] to little real change.31 Despite the frustration of some senior Education
Department administrators who sincerely wanted to see improvements, the result was
that the government was buying short-term political support at the longer-term expense
of an improved education system.
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A second form of implementation concerned policies which the government wanted
to see introduced but which took much longer to bring into effect than initially had been
assumed. Three examples may illustrate the process under such circumstances. In the
first case, civil service reform, the governments approach was essentially symbolic.
The other two cases, the establishment of the Hospital Authority and the construction
of a new airport, are counter-illustrations of what happened when the government really
wanted to see its policies implemented. In both cases, delay and bargaining with affected
groups characterised the process. In each of these examples, the nexus of the issue was
the extent to which government was willing to continue with the implementation of the
policy even as political opposition increased.

In the 1990s, the government fully implemented some civil service reform proposals
which were unlikely to be opposed, such as performance pledges and improving
customer service, and which it hoped would win plaudits from the public. In other areas
of personnel reform, such as new conditions of service for government employees, the
changes could conceivably have affected the stability of the civil service and made
the transition even more difficult than it already was. In consequence, the government
contented itself with affirming the need for reform but undertaking little by way of
bringing relevant measures into effect. The new conditions of service proposed in 1993,
other than those affecting overseas officers on contract, were not finally implemented
until 1999.

In the case of the Hospital Authority, four years elapsed between the
recommendation of the consultants to establish the Authority and the actual creation
of the organisation. There was no doubt that the government wanted to see the
Authority established both as a means of cutting costs and as a way of deflecting
complaints about healthcare. But there were voices opposed to the manner in which
the government wanted to set up the new body. At stake were the conditions under
which civil servants would transfer from the government to the Hospital Authority, the
organisational form it would assume and its accountability to the public. Eventually,
the government conceded generously on most of the points raised by its critics.32 The
extent of political dissent meant that the government could no longer simply decree
that new organisational forms or policies would take shape in exactly the way that
had been assumed at the policy formulation stage.

In the third case, the construction of the airport at Chep Lap Kok, the government
very much wanted to see implementation of the project on time and according to
plan. The new airport seems to have been originally conceived of as an infrastructural
development of the type that the government had so successfully undertaken in creating
the housing and transit systems. After the Tiananmen Square massacre, the government
also attempted to sell it to the public as a symbol of confidence in the future. But it
had underestimated the Chinese governments concern that the costs of the project
would fall on the future Special Administrative Region and, for some time, there was
significant disagreement over whether or not the airport would be built. The Hong Kong
government was adamant that the airport would go ahead and went so far as deciding
to construct the Tsing Ma bridge, a vital part of the project, without the approval of the
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Chinese government. Eventually, differences between the governments were resolved

and a memorandum of understanding between the Chinese and British governments was
signed in June 1991.33

These three cases illustrate different aspects of the difficulties the Hong Kong
government faced over implementation in the transitional period. In the case of civil
service reform, the government could afford to act in the manner that it had adopted in
its failed efforts to implement the new education initiatives. The matter was not pressing,
values could be stated as indications of future directions, and implementation could be
postponed. In the other two cases, the government could not act symbolically because
it had a real need to see the Hospital Authority in place and the airport built. In these
cases, concessions were made to those opposing its goals so that the policy could be
implemented. During the transitional period, the government was in effect faced with a
choice between symbolic implementation and bargaining with affected groups to achieve
its most important objectives.
Disarticulated
With the difficulties of the transitional period behind it and ringing endorsement from the
British and Chinese government for its performance, it might have been supposed that
the post-1997 civil service would have reverted to previous practices of rational decisionmaking where critical decisions were taken in-house after some formal consultation.
Senior civil servants wanted to reduce the level of bargaining over policies that had
characterised the last years of the colonial government and hoped for a return to a
proper executive-led government under the provisions of the Basic Law. Legislative
Councillors soon complained that they were not being consulted sufficiently on new
bills, that the executive was intent on pushing policies through without adequate time for
reflection, and that it was acting in a high-handed manner.34 The intention may have been
to make policy rationally but politics could no longer always be contained or absorbed
within the administrative machine. The post-1997 political order was disarticulated. It
became difficult to aggregate demands and to gauge possible public responses to policy
initiatives. Pressure groups were often able to create major problems in implementation.
The consequence was a sense of frustration on the part of senior government officials
and the growing feeling among the population that the government was out of touch.
The new government certainly placed greater emphasis on the realisation of its goals
than its predecessor. It was anxious to establish its credibility and to show that it had
the capacity to deal with the backlog of policy problems. But it proved no more able
to implement policy than the transitional government; in some respects, it was far
less successful. Moreover, when it failed to deliver, there was a more noticeable gap
between what it promised and what it achieved. The colonial government had generally
re-affirmed its commitments to policies during the transitional period even if they had
not always been implemented. The post-1997 government was rather quicker to discard
unsuccessful policies and rather more ready to assign blame for failures. There was a
view among some senior political figures that the civil service was largely liable for the
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policy failures or, at the very least, that it could be held culpable for not implementing
policy more efficiently. This created considerable tension within the government, partly
because the claims were not entirely justified and partly because many senior civil
servants took the view that the constitutional role of the political executive was to accept
ultimate responsibility for policy.

There are significant differences between policy implementation in the transitional
period and after 1997 but there are also areas in which it continued much as in the
past. There are three policy environments in which similarities and differences in
implementation can be observed. These are: implementation under conditions of crisis;
the implementation of established policies; and attempts to implement new initiatives
or to turn symbolic policies into substantive ones. We consider each of these areas in
turn.
a. Policy implementation under conditions of crisis
The Hong Kong government has a mixed record in dealing with crises. The structure
of the government was originally designed to deal with threats to political stability
and crises were essentially defined in those terms. Many instances suggest that the
government had some difficulty in dealing with events which did not fit neatly into an
incremental mould and that there was a lack of contingency planning and policy-making
capacity when unexpected events required innovative or rapid responses. In 2005, Tung
Chee-hwa, criticising the performance of his own administration, said that we were
indecisive in dealing with emergencies.35

In April 1997, a three-year old boy died of what was initially diagnosed as a
powerful strain of an influenza virus.36 The government immediately set up a task
force to investigate the disease. Three further cases of the disease were diagnosed in
November and two of the patients subsequently died. It was also discovered patients
could infect medical staff. By December, there was considerable public anxiety over
the possible spread of the disease. When more victims were identified, public pressure
on the government to take action became acute. The disease had proved to be fatal
and there was no known cure. The governments solution was radical. It announced
that the entire 1.2 million live chicken population would be slaughtered in less than 36
hours. The task proved far beyond its capabilities; only 260,000 chickens were killed
on the first day.37 A fundamental problem was that the chickens were to be gassed but
the operators were not experienced in the procedures. Chickens rose from the dead
and the exercise took much longer than had been anticipated. When the chickens were
finally killed, there were further problems with the disposal of the carcasses, some of
which were found rotting in the New Territories.

The government was widely criticised for not responding more quickly to the crisis.
Legislators and medical practitioners claimed that not enough had been done to diagnose
the disease and the media was scathing in its criticism of the governments handling
of the matter. Yet, in fairness, the disease was a new one. The government did set up a
working party to study the problem but was less certain of its role when public anxiety
began to rise. The chicken slaughter also assumed a capacity that the government did
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not have. The organisational cause of the failure probably lay in poor co-ordination
between departments, a legacy of strong top-down structures which looked after their
own jurisdictions competently but did not always co-operate well with others. More
widely, the issue illustrated the continuing weakness of the government in handling
crises. The Hong Kong governments strength lies in implementing routine matters
where policies have long been decided. When crises arise which have essentially new
features, such as the avian flu issue, the government did not appear to have the ability
to adapt quickly to the new situation.

Many of the same kinds of criticism were levelled at the government for its handling
of the SARS crisis. The three investigations on whether the SARS outbreak could have
been better handled by an Expert Panel, by the Hospital Authority Review Panel
and by the Select Committee of the Legislative Council raised issues that called the
governments performance into question.38 Although the focus of the three reports was
slightly different, each of them dealt with matters which affected the governments ability
to transmit and process information, its contingency planning and the co-ordination and
delineation of responsibilities between the relevant bureaus, departments and statutory
bodies. Each of these elements is critical to successful policy implementation. When
a crisis has to be dealt with immediately, they become even more important because
there is usually insufficient time to develop better communications, contingency plans
and improved co-ordination.

Processing and transmitting relevant information is an essential part of the
identification and resolution of policy problems. Nothing was known about SARS until it
was discovered in Guangdong at the end of 2002. The Chinese authorities investigated the
situation and produced a report on the disease in January 2003 but the findings were not
made known to the Hong Kong government and it was not apparently until 11 February
2003 that China notified the World Health Organisation of the outbreak.39 The slow
reaction of the authorities to the crisis was noted in the investigative reports, which all
called for improved communication between the Chinese and Hong Kong governments
on health matters. It was recognised, however, that the absence of information on the
disease was a mitigating factor. As the Expert Panel put it:
Overall the epidemic in Hong Kong was handled well although there were
clearly shortcomings of system performance during the early days of the
epidemic when little was known about the disease or its cause.40
On 12 March, the WHO issued a global alert.41 There was some criticism in the reports
of the failure of the Director of Health to add SARS to the list of notifiable diseases
until 27 March and of the Secretary for Health, Welfare and Food for failing to instruct
her to do so.42 The Select Committee of the Legislative Council thought that the
Directors performance was not satisfactory and criticised the Secretary for being
insufficiently alert and for failing to communicate clearly with the public.43 Once the
extent of the problem was known, however, the transmission of information to the public
was generally good although there were suggestions that the government might have
appointed a single person to liaise with the media rather than to speak with several, and
occasionally conflicting, voices.44
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All the reports focused on the inadequacy of contingency planning. The Expert Panel
called for an outbreak control plan in which individual responsibilities would be clearly
identified and both the Hospital Authority Review Panel and the Select Committee were
critical of the absence of an adequate plan. The Select Committee took the view that the
Chairman of the Hospital Authority had been partially to blame because he had failed
to call a board meeting in the period between 27 March and 26 April at the height of
the outbreak and had not used the opportunity to increase community support and to
canvass ideas on how to combat the epidemic.45 The Hospital Authority reacted to the
recommendations of the Review Panel by claiming that it had put many contingency
planning measures in place after the epidemic had abated. But there was little disguising
the fact that the Hospital Authoritys response to the crisis was not well focused and
involved considerable organisational confusion.

The related issue of co-ordination between the government and the Hospital
Authority received a good deal of critical attention in all three reports. The Hospital
Authority Review Panel went so far as to describe the situation as one in which there
was an absence of a clear chain of command and no central decision-making body,
remarks which attracted the ire of the Secretary for Health, Welfare and Food.46 There
were problems in the relationship between the Bureau, the Department of Health and the
Hospital Authority. The Bureaus initial response was to allow the Hospital Authority
to solve the problem. As the crisis worsened, the Secretary, and eventually the Chief
Executive, began to play more active roles but there remained a lack of common
understanding and inadequate communication between the Department of Health
and the Authority.47 These problems may be endemic to the relationship between the
government and the statutory bodies but they intensified during the crisis and impeded
a co-ordinated response.

The picture that the reports present on the handling of the SARS epidemic is one
of organisational confusion caused partly by the absence of information on the disease,
the lack of a contingency plan and poor communication and co-ordination. Eventually,
the magnitude of the problem and the effect which it had on the community and the
economy was such that the government was able to mobilise sufficient resources to
deal with the crisis effectively. But the time which it took to do so raises the question
of why those difficulties occurred in the first place. There is something of the colonial
legacy in the absence of a contingency plan: the colonial government was never very
enthusiastic about planning, preferring an ad hoc approach. In addition, as Michael
DeGolyer has suggested, the problem may also have been the administrative system
itself with over-worked officials, lines of authority and responsibility that had become
blurred, and decision-making that had become more personalised.48
b. Implementation of established policies
In many policy areas, there was continuity in implementation in the post-1997 period.
Where policies had been routinely implemented successfully over time, there was no
particular need or pressure to introduce new ways of achieving policy goals; only in
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sensitive areas where symbolic policies had been the norm in the transitional period
was there seen to be a need for change. With established policies, the nature of the
implementation process is illustrated most clearly when the policy fails. We consider
here two examples. The first, a public housing construction scandal, was a failure of
implementation in what had long been an area of successful achievement. The second, the
opening of the new airport, was a fresh venture, but one which drew on the considerable
experience of the public sector in building infrastructure.

In mid-1999, the Housing Department discovered problems with the piling on some
public housing construction sites. Further monitoring showed that two partly completed
blocks in Shatin had piles that were so short, and represented such a danger to safety,
that the blocks had to be demolished, causing a loss of $258 million.49 The Housing
Authority then appointed an independent investigation panel to establish the facts of
the case, identify areas of responsibility and negligence, and to recommend whether
disciplinary action should be taken.50 Before the panel could report, the ICAC had
charged eight people, including three civil servants, with corruption and the contractor
had been banned from tendering for future public housing projects. The investigation
panel reported in May 2000 and made a number of specific recommendations for future
improvements in the management of contracts and identified problems in the culture
of the Housing Department. Significantly, it attributed blame largely to middle level
officials in the Housing Department rather than to senior management. The Chair of
the Housing Authority did resign shortly before the Legislative Council debate but the
Director of Housing did not, even after the Council passed a vote of no confidence.51
The investigation panels report on the housing construction scandal also discovered
conventional problems in the implementation process that had little to do with post1997 political circumstances. It found a culture within the Housing Department that
could explain the poor supervision of contracts and the opportunity for corruption. Five
weaknesses were identified: formalism and routine performance were treated as more
important than substantive achievement, staff focused on their own responsibilities
and missed the wider picture, the staff who were responsible for construction quality
spent too much time at their desks, promotion was based on long service rather than
good performance and the usual reaction to a problem was to add a new instruction.52
These shortcomings had clearly been part of the organisational culture of the Housing
Department for some time. They do not represent significant differences in the style of
implementation from the colonial period.

The opening of the airport was somewhat different because there was more at stake
than in the housing scandal. When the airport opened in July 1998, the failure of the
cargo-handling and baggage systems and the flight information display system resulted
in delays and other inconveniences for passengers, considerable economic damage,
especially of perishable goods, and a significant loss of face for the government, which
had seen the new airport as a prestige project.53 Strictly speaking, it was a statutory body,
the Airport Authority, which was accountable for the problems. But the Chief Secretary,
Anson Chan, accepted that a measure of blame lay with the government. She herself had
headed the Airport Development Steering Committee which oversaw the implementation
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of the project. No less than three investigations, one appointed by the government, one
by the ombudsman, and one by a select committee of the Legislative Council, were
launched to discover the source of the problems.54 Each of the reports found that the
airport had been opened before all systems had been properly tested. They did not give
credence to the view that the airport had been opened prematurely because of a visit
from the Chinese leader, Jiang Zemin. The Legislative Councils report criticised the
Chief Secretary for her judgement in allowing the airport to be opened too early and for
neglecting or ignoring advice not to do so.55 But the Commission of Inquiry appointed
by the government appeared to clear her of responsibility for the problems that had
arisen and attributed blame instead to officials within the Airport Authority.56 In the
end, the Chief Executive found that there was no evidence of misconduct and issued
an apology on behalf of the government for the chaotic opening and the problems that
it had caused.

In terms of implementation, the difficulties lay in the organisational relationships
between the government and the statutory bodies within a framework in which there
were unresolved problems of control and accountability. There were new dimensions
to the relationship resulting from a greater emphasis on private sector practices in the
post-1997 period. But the difficulties could well have been experienced elsewhere or in
earlier times and were not unique to the post-colonial period. They appear instead to have
been the basic problems associated with many kinds of failed policy implementation:
inadequate supervision, insufficient monitoring and testing and poor communication
between the Airport Authority and the government.

If these examples simply illustrate conventional problems, there are probably many
other policy areas in which implementation proceeds much as it has done in the past. If
the policy is not controversial, and has been well established and supported over time,
the routine, incremental resolution of problems should resolve most implementation
difficulties. Only where dramatic failures occur, such as in public housing and airport
scandals, should critical attention be drawn to the shortcomings in the process. The
difficulty for the Hong Kong government is that increasing numbers of previously
uncontroversial policies and decisions have become issues of friction between
government and the public.
c. New initiatives and the implementation of symbolic policies
The post-1997 government was committed to policies which were designed to win
support and provide performance legitimacy much along the lines of the MacLehose
administration in the 1970s. In substance, the policies were not greatly different from
those which the colonial regime had used to bolster its position: more housing, better
education, and more health and welfare services. But they proved more difficult to
implement not only because of economic problems but also because civil society
organisations were not always convinced that the governments approach was correct
and did not co-operate fully in seeing its goals realised. During the Tung administration,
new initiatives were usually endorsed by a majority of the legislature or issued as a
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government decree and then encountered difficulties in implementation. During the

Tsang administration, the government was more inclined to withdraw its proposals in
the formulation stage rather than to risk confrontation over implementation.

The Tung administration confrontational style was particularly evident in education
where it eventually ended up not only in conflict with the stakeholders school
principals, teachers, and parents but also with one of the major providers, the
Catholic Church. The process, which was also applicable in other policy areas, has been
characterised as involving a process that started with the identification of a problem,
proceeded with the government attempting to gather public support with strong criticism
of some practice, became officially endorsed in a policy statement (for example, an
Education Commission Report) which identified the broad intentions of the government,
and was finally translated into specific action.57 With the symbolic policy-making of the
transitional period, the final stage was sometimes not fully implemented because it was
evident that it would result in friction that the government was seeking to avoid. In the
post-1997 period, attempts to implement government proposals frequently produced
such intense conflict with affected groups that policies had to be substantially modified
or abandoned to take objections into account.

The governments post-1997 education policy consisted of measures which were
likely to provoke friction with parents, principals, teachers and unions. These included:
curriculum reform, benchmarking the qualifications of teachers, reforming the primary
one admission system, reforming the secondary schools allocation mechanism, reforming
the university admission system, re-designating schools as mother language teaching
schools and improving public examinations.58 Conflict between the government and
teachers arose over the governments decision to assess their language proficiency, over
attempts to merge the subjects of History and Chinese History and over redundancies of
lecturers resulting from upgrading teacher education.59 The decision to reduce the number
of English language schools provoked widespread criticism from teachers, parents and
pupils and eventually led to the government modifying its original proposal and reducing
the number of schools that were required to change to Chinese language teaching.60 The
result in some cases was that policy had to be remade after it was supposed to have
been implemented, a waste of both time and resources. This suggests that there was
something wrong with the nature of the consultation process or the way the political
system worked or that the government had insufficient support to implement policy
authoritatively.

The difficulty that the government faced was that objections to its proposals often
arose after the formal period of consultation had taken place. The reclamation of Yung
Shue Harbour illustrates the kinds of problems faced by the Tung administration. In
2001, the Planning Department held two public meetings with local residents to discuss
the proposal. The officials were apparently sufficiently satisfied with the results of
the meetings that they went ahead with more detailed planning. When the schedule
for completion was officially announced, however, opposition to the project quickly
coalesced. A group called Save Lamma was formed which organised surveys, petitions
and letters to government departments and successfully attracted media attention to
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the issue.61 Faced with organised and articulate opposition to its plans, the government
suspended reclamation and eventually produced another plan which with funding and
other delays would take five years to implement.62

There are a number of interesting aspects to the Save Lamma campaign. First,
if, as the group subsequently showed, it was in tune with the political process and was
well able to express its views, why was the government not aware of those views at
an earlier stage? It is possible that governments consultation in this case was largely
token. As a study of public housing policy at the time suggests, the consultation process
appears to operate primarily to provide a degree of legitimacy for the Hong Kong
governments policy decisions [and] its impact on policy itself is very limited.63 The
government did revise its consultative methods and subsequently met with a number of
interested groups, including Save Lamma, to discuss planning policy for shorelines
throughout Hong Kong.64 Second, the Save Lamma campaign suggests that political
parties were unable to play a mediating role between government and the society.
Because the political system was designed to keep political parties weak, they could not
aggregate demands or present views to government which represented an authoritative
position. Rather, they often tended to be reactive, seeking to ascertain what public opinion
was and then reflecting it in their policies and actions. The Save Lamma campaign
did receive party support but it was the pressure group itself that made the running and
which brought the views of Lamma residents directly to the attention of government.

There are other instances of pressure group behaviour which suggest that the
medium of language instruction issue, other contentious educational issues, and the
Lamma reclamation dispute are not isolated cases. In October 2002, for example, the
government announced plans to introduce more facilities for tourists near the Po Lin
monastery on Lantao Island. The monks took exception to the proposals and threatened to
close the monastery. The government was again forced to back down and re-negotiate a
settlement after a policy decision had been publicly declared.65 Another example suggests
a similar sort of disarticulation in policy implementation. Towards the end of 2002, the
government took the seemingly innocuous decision to protect some statutes and trees
from New Year revellers by covering them in plastic. The decision was attacked by a
group called Education Convergence which argued that the government should address
itself to the moral education of youth rather than spending money on plastic protection
for trees and statutes. Others weighed in with complaints about the litter left after the
celebrations, sparking a debate on anti-litter policy. The problem for the government has
been that relatively minor issues can spill over into more major confrontations because
institutional channels are unable to contain and resolve those issues at their source.

In 2003, in a reprise of the Save Lamma issue on a larger scale, plans to reclaim
parts of the harbour for a bypass project were challenged by an environmental pressure
group, the Society for the Protection of the Harbour, which took the government to
court.66 In September 2003, the group, which had opposed plans to reclaim the harbour
for many years, was granted leave to apply for judicial review. It used the opportunity
to rally support for its cause, holding protests which attracted several thousand
demonstrators and launching a signature campaign against the reclamation.67 Legislative
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Councillors who had earlier supported the governments plans began to re-consider their
positions. The government itself suspended reclamation operations shortly before the
judicial hearing but claimed that if the action was successful it would cost taxpayers $600
million and 1,500 job losses.68 The interim judgement went in favour of the government
but it decided only to resume limited operations on the reclamation pending a final
decision.69 In March 2004, the High Court found that the Chief Executive in Council was
exercising his powers under the Town Planning Ordinance lawfully and reasonably and
that the reclamation could therefore proceed.70 The government took note of the strength
of public feeling and announced that, aside from two projects which were deemed to be
of overriding public need, there would be no more harbour reclamations.71

Tsang could not initially afford to adopt the confrontational strategy with civil
society organisations which, until 2003, had characterised the governments approach.
When he was re-elected in 2007, the strategy continued to be based on accommodation
rather than on the enforcement of its proposals. In 2008, for example, in his policy
address, Tsang announced that the old age pension would be raised to $1000 per month
but that it would be means-tested.72 This resulted in many protests from legislators and
pressure groups and a 60% negative response rate to a government survey.73 Within ten
days the means test was dropped. The governments cautious approach to its dealings
with civil society was also evident in its stance on the collapse of Lehman Brothers
which left an estimated 43,700 investors with losses of $15.7 billion.74 The victims, with
the help of political parties and professional advice, were soon very well organised.
Their claim was that the banks had sold high risk financial products as safe investments.
They wanted the government to ensure that the banks complied with their demands for
compensation for their losses. The government was very reluctant to become involved,
largely because of the precedent that might be set, but also because it was conscious
that it would be unlikely to come up with any kind of solution that would satisfy
angry investors, the banks, or its own formal commitment to non-intervention in the
economy.

Such are the problems of policy-making under circumstances where the government
finds it difficult to act authoritatively and where it may often be involved in gridlock. If
the Hong Kong government was less centralised, it is possible that some issues, such as
the Lamma island reclamation, might be dealt with by local councils with appropriate
powers. But for most policy issues there is no such filter. Issues come straight to the
government which then loses credibility because it cannot find appropriate solutions. It
is hamstrung by many different factors. First, civil society organisations are themselves
divided on the sorts of policy responses that they wish to see from the government.
Second, the governments consultative mechanisms do not always seem reliable enough
to provide an indication of the strength of opposition. And since potential groups opposed
to a policy cannot be determined in advance, it becomes very difficult to work out an
appropriate strategy of consultation. Third, although civil society organisations are
usually well-organised and well-informed and have the ear of the media, they are often
reactive to official proposals rather than proactive in presenting their own suggestions
to government. Some organisations see themselves as part of a permanent opposition.
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In Hong Kong, as in most countries, pressure groups bring their policy demands
to the government. Some of those groups, such as business and professional groups,
have traditionally been well-entrenched in the formulation process and other social
groups have gradually become increasingly involved. These new groups have the power
to disrupt implementation but they are not fully incorporated into the policy process.
Consequently, realising policy goals is often dependent on bargaining at the point when
the policy is about to be implemented, which is costly and results in delays or even the
abandonment of the policy or decision.
Ideational
By ideational, we mean the notion that good ideas can produce innovative policies which
may be implemented using policy instruments other than, or in addition to, traditional
government departments. This was particularly characteristic of policy-making under
Tung Chee-hwa. Ideational policies and decisions had specific features: they were
generally top-down, that is, formulated and promulgated by the Chief Executive or
a Director of Bureau or head of an agency with relatively little input from the senior
civil service; often, in consequence, they were only superficially assessed in terms of
their economic potential and costs; they were usually a prestige project, designed to
reap political benefits; and they were implemented by means of a public/private sector
partnership or by parties outside the civil service. This could never be the sole mode of
policy formulation and implementation because it implied circumventing a civil service
which was still responsible for implementing the vast majority of public policies. Under
Tung, however, the beleaguered political executive found ideational policy-making
attractive because projects and proposals made in this way promised to cut through the
impasse in implementation, because they could be seen to support the private sector
and because they could potentially have won support for the regime. Such a strategy, if
it can be called that, rested on some heroic assumptions.

First, it assumed that innovative ideas were the preserve of the political executive
and the private sector and that the impasse in implementation was largely the fault of the
civil service rather than a product of governments relationship with civil society. The
appointment of Directors of Bureaus from outside the civil service was justified on the
grounds that they would be transformational in ways that the senior civil servants could
not. But the problem with policy implementation could not be laid solely at the door of
the civil service. A reductionist explanation conveniently ignored the growing strength
and dissatisfaction of civil society with the policy direction of the government. It ignored,
too, the serious constraints on implementation which resulted from the executive-led
constitutional arrangements of the Basic Law which made it difficult for the concerns
of civil society to be aggregated into policy demands. To favour one source of policy
advice at the expense of the experienced ideas coming through the civil service system or
from well-informed pressure groups was to invite scepticism from those excluded from
the process. Good ideas are clearly a necessary but insufficient condition for successful
implementation; to achieve the goal, the process has to be managed politically to ensure
that critically important stakeholders will support the policy.
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A second difficulty with ideational policy-making was that it assumed that
implementation would be unproblematic and would be undertaken either through a
public/private partnership or by the private sector. Examples include: the building of a
high technology Cyberport, the construction of a Disneyland, the unsuccessful bid for
the Asian games, the launching of Harbour Fest, a series of concerts designed to raise
spirits after the SARS outbreak, and the announcement of plans to hasten economic
integration with the Pearl River Delta region. Each of these projects involved government
providing or substantially funding an infrastructural development with private operators
running the projects after their completion. In the Harbour Fest project, the government
underwrote the concerts to the tune of $100 million and eventually had to set up a panel
of inquiry to find out why the project had failed so badly.75 The Director of Audits report
on Harbour Fest not only severely criticised the manner in which the project had been
implemented but also provided a series of guidelines which the government should have
followed. These included: conducting a feasibility study, conducting options analysis,
drawing up a formal business plan, greater transparency and accountability in the use
of public money, taking effective action to monitor the project, assessing whether it can
be completed in time and ensuring that performance targets of private sector partners
are reliable.76 Similar fears that some of the rational features of the policy process may
be missing have been expressed about some of the Pearl River Delta infrastructural
projects. In each of these projects, the uncertainties of the venture demanded a more
careful assessment of costs and benefits.

Policy implementation may be unsuccessful for many reasons: unclear
objectives, inadequate planning and costing, failure to resolve conflicting values, poor
communication, and inadequate implementation structures. Implementation on the basis
of good ideas alone is likely to suffer from most of those problems. In consequence,
they have tended to be presented as win-win situations, highly desirable innovations
which will have benefits for everyone. Opposition then builds as the inadequacies of the
planning and costing are gradually revealed. Where there are good ideas which have
immediate political costs, such as the university merger proposal, opposition may be
mobilised more quickly. Whichever path is followed, the disarticulated political system
makes the implementation of any new policy devised in this way very difficult. Under
Tsang, and a much more civil service-friendly administration, ideational policy-making
was largely abandoned. There were suspicions that it might re-emerge with the plans to
build a bridge to Macau and Zhuhai and with the proposal to build a cruise terminal.
But the Tsang administration has tightened up the process by attempting to ensure that
that there is more likely to be a detailed assessment of costs when new projects are
proposed. It also looks for consensus before it moves forward to implement specific
policies, a political condition that is often very difficult or impossible to achieve.

We have discussed strategies of policy implementation in terms of five major
styles or modes: top-down, rational, symbolic, disarticulated and ideational. Examples
of each of these modes can be found in post-1997 Hong Kong. The twin factors of the
nature of the political system and the determination of the political executive to bring
in new policies were the most significant features of policy implementation under Tung.
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They meant that implementation became something of a battleground between the

government and civil society. Under Tsang, new policies were difficult to formulate and
implement because there were implicit vetoes which were widely distributed throughout
a polyarchic, disarticulated system. In addition, because the government does not have a
popular mandate, gaining acceptance for top-down, authoritative decision-making is not
easy. Executive-led government permits only weak mediating structures between the
government and the civil society. Disputes cannot easily be resolved through political
bargaining or the aggregation of policy demands which are usually undertaken in other
countries by political parties. The consequence is that policy implementation is very often
an exercise in frustration for both the government and those affected by its policies.
Evaluation
If policy is carried out according to the intentions of the policy-makers, is it necessarily a
success? To compare results with goals is usually an important dimension of evaluation.77
It is not, however, the only dimension. A policy may be implemented successfully from
the standpoint of the government but may still fail to meet the needs of those who are
affected by it. To evaluate policy, then, we need to look at it from different perspectives.
In this section, we consider three views on policy implementation in the SAR: that of
the government; that of the Audit Commission, the independent body which monitors
the governments accounts and conducts value for money studies; and the views of
the population expressed through surveys.
Governments Assessment of its Policy Successes

An important feature of formal evaluation is reporting actual performance against the
targets that have been set. The post-handover government committed itself to managing
by results and subscribed to the hoary (but inaccurate) old clich that what gets
measured gets done. In 2002, it produced a Progress Report on Policy Objectives in
which it gave itself a 96 % success rating on the 1,368 policy commitments that it had
made. Of these, 631 commitments had already been implemented, a further 578 were on
schedule, 100 needed adjustment and a further 59 were behind schedule.78 Many of its
successful achievements, however, were of a relatively minor nature. For example, the
Civil Service Bureau had committed itself to organise a customer service excellence
award; the Water Supplies Department undertook to improve quality assurance in
its attendance to bursts and leaks; and the Education and Manpower Bureau was to
conduct a survey on age discrimination.79 All these initiatives were duly achieved,
but they were clearly of limited significance compared with some of the policies that
were not achieved, or which were under review, or where the policy objectives of the
government were changed.

The government is not unbiased when it undertakes assessments of its own
performance. The major reporting mechanism on the extent to which the government
has achieved its policy goals is the report by the Controlling Officer of the Bureau
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or Department in the annual estimates which accompany the budget. There are
guidelines issued by the Financial Services and Treasury Bureau that prescribe what
a Controlling Officer may or may not include in the report. They include the extent
to which programmes have met their targets and operational objectives have been
achieved; the effectiveness of operations; and the determination of key performance
measures which best indicate the quality, economy, efficiency and effectiveness of
programmes.80 In 2005, the Audit Commission undertook a comprehensive study of
bureaus and departments to see whether these guidelines had been met.81 It found that
only 30% of performance measures concentrated on targets while 70% were indicators
which were not quantifiable.82 Further, only 11% were concerned with effectiveness with
the remainder dealing with workload, service quality or efficiency.83 The Commission
recommended that in future bureaus and departments should focus more on setting
targets and improving performance measures.84

That is easier said than done. There are three major problems. First, in evaluating
whether policy has been successfully implemented, the ultimate test is whether the
intended outcome has been achieved. Thus, for example, the Commission was critical of
the Education Department for failing to provide performance measures on its intended
outcome which was to improve student learning and performance. But, as the Director of
Education pointed out, there were major problems in doing so.85 The difficulty, common
to many policies, was to develop quantitative measures for a goal which was essentially
qualitative. Second, the Commission raised problems about the reliability of information
on which performance measures were based. In many departments, there was no means
of verifying whether the figures were accurate.86 What was being measured, contrary to
managerial expectations, was not necessarily being done. Finally, simple quantification
of whether a policy goal has been achieved or not tells us very little about the impact
of policy on people, the importance of the policy in terms of governments priorities,
whether the goals were fully realised or whether government was simply formally
reporting completion, what problems were encountered, and the extent to which residual
or contingent problems needed future attention. Policy implementation is a complex
business in which many of the outcomes are often unintended.
The Audit Commission

The Audit Commission has two functions. It reports each year to the Legislative
Council on the accounts of the Hong Kong government (regularity audits) and it also
conducts value for money studies to determine whether the government is spending
money wisely and to best effect. Strictly speaking, the Direct of Audit is not entitled
to comment on policy decisions of the Executive and Legislative Councils except
their effect on the public purse.87 However, the wide range of other responsibilities
that the Commission has under the Audit Ordinance and under rules agreed with the
Legislative Council in February 1998 means that the distinction between when the
Direct of Audit is or is not commenting on policy is very finely drawn. For example,
under the rules, the Director of Audit is entitled to consider the authority upon which
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the policy objectives have been determined, whether there are satisfactory arrangements
for considering alternative options in the implementation of policy, whether established
policy aims have been implemented, whether there is any conflict between policy aims
and objectives or between the means chosen to implement them, and whether policy
aims and objectives have been translated into operational targets and measures of
performance.88 In exercising these functions, the Director of Audit has little option but
to provide at least implicit commentary on the success or failure of government policies
and to suggest improvements in implementation.

Two examples may suffice to illustrate this point. In 2002, the Audit Commission
undertook an investigation of the small house grants policy in the New Territories.
Since 1972, an indigenous male villager, who is over 18 years of age and descended
from a resident of a recognised village in 1898, is entitled to a concessionary grant
to build a small house.89 The aim of the policy was to improve social cohesion in the
New Territories and to improve housing and sanitary standards. The Audit Commission
produced evidence to suggest that, at least as far as efforts to improve social cohesion
were concerned, the policy was not working. In 53 cases, the Commission found that
villagers had sold their entitlements under the policy within five months of the removal
of the restriction on alienation. The Commission also drew the attention of the Lands
Department to delays in processing applications, to the absence of a list of indigenous
villagers entitled to the grant and to inadequacies in the register of those who had
been awarded grants.90 There was no direct criticism of the policy decision in the
Commissions report, but it did provide powerful evidence for abandoning the policy.

In 2007, the Audit Commission also conducted a study on truancy in public schools,
surveying head teachers and seeking to analyse the causes of truancy.91 On the basis of
the survey, the Commission made recommendations for improving the existing system
which included, for example, recommendations on procedures for detecting absences,
follow-up procedures, identifying schools which were not complying with procedures
and strengthening the Non-attendance Cases Team.92 The Secretary for Education and
Manpower simply said that he generally agreed with the recommendations which in
effect involved changes in policy.93 Government departments almost invariably accept
the Commissions recommendations. It is consequently a significant policy actor in
programmes on which it reports.

The Audit Commission also plays an invaluable role in identifying problems of
inefficiency and unnecessary expenditure in public policies. In 2002, for example, one
Legislative Councillor calculated that the Commission had discovered ten cases of waste
in government which involved losses of $10 billion.94 In its Harbour Fest investigation
in 2004, the Commission was intent on ensuring that future public/private partnerships
should follow clear guidelines to ensure that public money would not be wasted.95 Yet
the terms under which the Commission operates are such that it can only draw attention
to problems after they have occurred or, rarely, to future inaccurate predictions. It is
also restricted to comments on particular cases rather than to wider recommendations
on the way that policy is formulated and implemented. It may be a thorn in the side of
the administration, drawing attention to its inadequacies. But it can do nothing about the
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constraining political circumstances under which the government attempts to implement

policy and which are often at the root of the problem.
Surveys
The reaction of people to the impact that government policies have upon them is a critical
factor in evaluating the success of policies. The government, through the Home Affairs
Bureau, previously conducted periodic surveys on the public response to policies and
its levels of satisfaction with the performance of the government. In August 2003, for
example, a Home Affairs Bureau opinion survey of 1,473 people found that 59% were
dissatisfied or very dissatisfied with the performance of the government.96 Despite the
governments claim that it wanted to be more in touch with public opinion, no Home
Affairs Bureau surveys of this kind appear to have been held since August 2003. In
February 2004, however, the government did indicate that it would seek to keep abreast
of public opinion through polls, social networking, focus group discussions, analyses
of views in the press and public views and attitudes revealed through opinion surveys
97 These means may serve it better than the surveys used in the past which did not
identify the sources of dissatisfaction very precisely.

A private polling organisation, the Public Opinion Programme, using telephone
polls of about 1000 respondents, has also found varying levels of dissatisfaction with
the performance of the government over the post-handover period. At its lowest level
in July 2003, 68.3% were dissatisfied with the performance of the government while
only 11.4% viewed its performance as satisfactory.98 In October 2008, 22.5% thought
that the government was performing well with 49% neutral and 27.9% believing that
it was performing poorly.99 Dissatisfaction may clearly vary according to particular
issues and may also need to be distinguished from unsatisfactory economic, political
and social conditions. It is sometimes difficult, for example, to separate discontent with
poor economic conditions from specific measures that the government has or has not
taken to deal with those conditions. The polls taken in the second half of 2002 and in the
first half of 2003 may, for example, reflect unhappiness with the governments decision
to introduce anti-subversion legislation under Article 23.100 There is some evidence to
suggest that Hong Kong people are reasonably satisfied with the governments delivery
of existing services101 which would suggest that most dissatisfaction comes from what
the government is not doing or what it is unable to do.

There have been substantial changes in policy implementation in Hong Kong over
the past two decades. In the choice of policy instruments, there has been a greater reliance
on the public sector organisations outside the civil service, outsourcing, and public/
private partnerships to deliver goods and services. The prevailing orthodoxy, to which
the Hong Kong government subscribes, is that providing goods and services in this way
is more efficient and cost-effective. This assumption needs to be examined carefully on
a case-by-case basis. It is not always true that the public sector is less efficient than the
private sector; the calculation of costs and savings is often problematic and sometimes
ignores the efficiencies that have been developed over time by government departments
but which are not available to the private sector or to subvented organisations.
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The rapidly changing political environment has significantly influenced the
strategies that have been adopted to implement policy. Under the colonial system, the
government had little need to concern itself about opposition to its policies at the point
of implementation. If it did engage in consultation, the answers that it received were
usually those it wanted to hear. Some of these attitudes have been carried over into a
political system where they are no longer appropriate and where a disarticulated political
system and the rise of civil society have meant that the implementation of new policies
has become very difficult. Those who try to implement policy are never entirely certain
that those affected by the proposed measures will accept them; pressure groups may
emerge, almost anomically, in response to policies and frustrate attempts to achieve goals.
At the same time, despite many formal consultative mechanisms, there seems to be little
attempt to ameliorate the tension between government and society. The ombudsman, for
example, has suggested three questions that civil servants might ask themselves about
consultation with the public on policy implementation: Is there adequate consultation
with affected individuals and groups all the way before programme initiatives are
planned, developed, modified where necessary, and implemented? Is this consultation
done in a meaningful and timely way? Is the way in which the final decision will be
made clear from the outset to the affected persons?102 It is unlikely that such questions
are often actually asked. And, although they might help to improve the situation, they
do not address the fundamental causes of the problem: constitutional arrangements that
inhibit the aggregation of demands and political tensions between the government and
civil society.

The evaluation of policies in this context reflects the different perspectives of
government and society. We should also note that evaluation of policy itself has changed
in character over the past two decades. Most governments have shifted their focus from
policy inputs to attempts to assess outputs and outcomes. The Hong Kong government
is more interested in evaluating its performance than it once was and spends some effort
in assessing whether it is meeting its policy objectives. As we have seen, this assessment
tends to be quantitative and does not necessarily reflect either the Director of Audits
judgements about the efficiency and cost-effectiveness of government programmes
or the more qualitative views of SAR citizens. The gap between formal quantitative
evaluations and those that involve the opinions of the stakeholders is illustrative of
the general malaise affecting policy implementation. The government may say that it
has achieved its objectives and that it deserves the support of the public because of its
efforts. But, if opinion polls show that there are high levels of dissatisfaction with its
performance, then formal success in achieving policy objectives is of little relevance.
The gridlock in policy implementation in post-1997 Hong Kong is a reflection of the
friction between the government and the society.
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Part IV
The Government and the People
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10
Efficiency and Responsiveness
hat do people expect of their government? How does the government seek to
meet those expectations? For any government that is not solely based on the
coercive power of the state, these are important questions. In Hong Kong, where the
government cannot be removed by elections and where there are few other justifications
for its continuing rule, the ability to respond to the peoples needs and expectations is
critical. Both the colonial and the post-handover regimes have rested their claims to rule
on performance legitimacy, the belief that if the government meets expectations and
delivers the public goods and services that people want then it has ipso facto political
support and a rationale for exercising its authority. There is a critical assumption
underlying this claim: that the government has the capacity to provide the people with
what they want. That may be true if expectations are relatively low but, if they are
complex, expensive or conflicting, then the governments ability to deliver may be in
question. As we saw in Chapters 8 and 9, the post-handover government has low policy
capacity and has difficulty in introducing new policies even when there have been clear
public demands for them. Somewhat paradoxically, low policy capacity has co-existed
with high administrative efficiency; the government has generally been able to deliver
its established programmes cost-effectively and to the satisfaction of the population.
Many public sector reforms have been aimed at increasing efficiency not only because
this accords with some of the fundamental values to which the regime subscribes, such
as value for money and fiscal frugality, but also because an efficient government, at
least in its own eyes, is a legitimate government.

Although the government has always believed that efficiency is central to meeting
peoples expectations, it has not been the only value that it has sought to promote. A
non-democratic government might still win popular support and reduce its legitimacy
deficit if it acted responsibly and responsively. If relations between the government
and the public could be conducted courteously, quickly and with attention to specific
needs and if the government was able to assess public demands for policy changes and
then formulate and implement those changes, then it might reap the benefit of political
support. Efficiency and responsiveness, in this ideal world, might then be regarded as
compatible values. If, for example, a department is able to serve its clients quickly, it may
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be acting both efficiently in terms of its delivery of services and responsively in meeting
their needs. But it is also possible that the values of efficiency and responsiveness may
be incompatible. A department that spends too much time looking after very diverse
needs of citizens might be responsive without being efficient. Conversely, a department
might deliver services efficiently but without any regard to the views of its clients.

The balance between efficiency and responsiveness is difficult to achieve. For the
most part, the Hong Kong government has tended to regard efficiency as the overriding
legitimating value. The debate over whether the government should be cost-effective (and
win political support for its prudent fiscal management and speedy delivery of services)
has usually won the argument over whether it should listen to what people want and
then deliver services appropriately, if less cost-effectively. However, responsiveness has
been seen at various times as an alternative means of legitimation. Under Patten, it was
central to the aim of changing the culture of the civil service and re-legitimating the
bureaucratic polity.1 After 1997, this approach fell out of favour because Tung laid the
stress on the importance of managerialism, efficiency and executive-led government.
After 2003, the 1 July demonstration persuaded the government that it should be
more concerned with people-based governance2 and more responsive to their policy
demands. But this was essentially a formal commitment and did not lead to many new
ways of encouraging greater participation in the policy-making process. The impasse in
policy-making reflected the fact that, although civil servants were often both responsive
and efficient, there were no institutions which could easily determine public expectations
and demands and convert them into policy outputs. In this chapter, we examine the public
sector reforms that have aimed to enhance efficiency and to develop responsiveness and
analyse the extent to which those goals have been achieved.
Efficiency and Performance Legitimacy

Efficiency is a key value for any government. But in the Hong Kong context it has
important political as well as administrative significance. As Lui puts it,
Failure to attain efficiency would not only be administratively undesirable but
also might threaten the political authority of the unaccountable bureaucrats.3
Efficiency covers at least three related aspects of administrative performance. First,

it means that costs should be under control and that new expenditure should meet
the criterion of greatest output for least resources expended. Under colonialism, the
administration had long experience of keeping tight control over the budget although
it was faced with new challenges from the 1970s onwards when MacLehoses social
programmes required vastly increased expenditure. Second, efficiency means rapid
decision-making, a quality that was markedly absent during the earlier colonial
period. The McKinsey re-organisation of the structure of government in 1973 helped
considerably by disaggregating the Colonial Secretariat into discrete policy branches
and decentralising some functions to the departments, which allowed more decisions
to be taken at a relatively lower level.4 Third, efficiency involves delivering services
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Efficiency and Responsiveness 233
through an appropriate structure and with qualified personnel. There were long delays in
recruiting professionals to the civil service under colonialism with the consequence that
experienced staff were over-loaded.5 However, as the McKinsey consultants observed, as
the size of the operations began to grow, economies of scale allowed more differentiation
of the roles of professionals, a development that took place gradually as the civil service
expanded in the late 1970s and early 1980s.

The planned expansion of social services in the 1970s did not materialise to
the extent that the government had hoped. The ten-year plan to build homes for 1.5
million people was too ambitious; a growing population meant that healthcare and
educational facilities were still under pressure; and social welfare provision remained
minimal.6 But there were significant achievements. Although the housing programme
fell short, the government was still able to build 35,000 new homes per year. The
number of government hospital beds increased from 6,534 in 1972 to 10,300 in 1982.7
The number of government doctors rose for 670 to 1234 in the same period.8 School
enrolment increased from 669,000 to 776,000 and the government committed itself to
nine years compulsory education.9 Behind all of this was a buoyant economy, for which
the government claimed credit, in which per capita Gross Domestic Product increased
from $11,695 in 1976 to $26, 654 in 1981.10 Under such favourable circumstances, it is
perhaps not surprising that the governments efforts met and probably exceeded public
expectations and that greater legitimacy resulted from its efforts. The political support
which the government received may also have sprung from its moral agenda and the
vigorous efforts of the Independent Commission Against Corruption to combat corruption
in the police force and other departments which were in frequent contact with the public.
The government was able to argue that it was acting in the best interests of the people
and that it had in place plans for the provision of future social programmes, that it could
deliver existing services efficiently, and that it was committed to clean government.

Until new political factors changed the environment, the government was able
to maintain performance legitimacy as the basis of its support. However, the SinoBritish negotiations and the realisation that the British and Chinese governments would
determine the fate of Hong Kong reduced the authority of the colonial administration.
The retrocession to China also sparked demands for the protection of civil liberties
and the rule of law after 1997, which neither the British government nor the colonial
administration could guarantee. There were increasing demands for representative
government and pressure groups began to ask not simply for efficient administration
but for qualitatively better social policy outputs.

Although these political developments reduced the authority and scope of the
colonial administration, the British government made it clear that Hong Kong would
continue to be vigorously administered and that the colonial administration had a
responsibility to ensure that the public interest was properly pursued until the handover.
The search for greater efficiency remained a central value which led the government in
various directions. It attempted to improve healthcare delivery by creating a Hospital
Authority with some autonomy from the government and gave more powers to the
Housing Authority, devising a long-term housing plan. 11 To answer demands for
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qualitatively better social policy outputs, it set up an Education Commission, which

produced recommendations on teaching practices and learning, and established new
universities to cater for increased demand at the tertiary level. It also set up a department
to deal with environmental issues and began to try to improve the social welfare system
and to resolve transport problems.12

The government also tried to build on the McKinsey reforms. In 1989, the Finance
Branch produced a document, Public Sector Reform, which was aimed at increasing
efficiency and the expansion of services by improving value for money.13 The Branch
supported the creation of six trading funds from existing government departments which
were to have greater financial flexibility. They were expected to recover costs although
their staff remained part of the civil service. The Public Sector Reform document
also called for greater private participation and co-operation with government and
the establishment of more public corporations. Although the trading funds, with one
exception, were successful, the government remained cautious in developing publicprivate relationships further in the latter years of the transitional period. In 1992, it did,
however, establish an Efficiency Unit, reporting directly to the Chief Secretary, which
was intended to carry on the work outlined in the Public Sector Reform document, and
which was given a brief to transform the management and delivery of public services
so that community needs were met in the most effective and efficient manner.14

The notion that the government could acquire legitimacy through effective and
efficient delivery of services is a thread that runs through Hong Kongs history, but
there are significant differences between its earlier and later forms. In the 1970s, the
right to rule rested on political support resulting from the efficient delivery of desired
public goods and services, such as housing, education and healthcare, and the credit
that the government claimed for the territorys economic prosperity. The success of the
governments programmes encouraged the belief, later held particularly by business
and pro-China groups, that Hong Kong people would be satisfied with any government
that provided such goods and services, regardless of the way in which it was selected.
The legitimacy of the regime, from such a perspective, simply became subsumed under
a general managerialist assumption that outcomes and ends, not means or process,
mattered in securing political support. If this were so, then the only problem with which
a government need concern itself was whether it was able to deliver what the people
wanted. There might be a managerial crisis if the government could not deliver on its
material promises, but its right to rule was not otherwise in question. Tacit support
would obviate the need for expressed consent. The evidence from Hong Kong in both
the transitional and post-1997 periods suggests that such an approach over-simplifies
the nature of the legitimacy problem and underestimates the complex support that is
required to maintain consent and the legal and moral authority to rule in a non-democratic
regime.

It is important in this context to distinguish between consent and democratic
legitimation. Democratic legitimation is probably the most practical means of obtaining
consent. But it is not the only means. In the 1970s, the colonial regime manufactured
consent by building a community which was intended to reflect and reinforce the values
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of the ruling elite. There is no reason to suppose that consent was not willingly given to a
regime which promised, and delivered, many of the material priorities of the population.
The nature of performance legitimacy, however, is that efforts to buy political support
have limited shelf life. Basic needs may be satisfied, but they spark continuing demands
for more specialised goods and services and for better quality in service delivery which
may not be realised as easily as the earlier basic provision and which will eventually
come up against the constraint of finite financial resources. After the 1970s, the better
educated, more prosperous community that resulted from the expanded provision of
public goods and services and from an increasingly prosperous economy was inclined
to look for justifications to rule in features of the regime that required a more lasting
resolution of the problem of consent and the protection of civil liberties and the rule of
law. Performance legitimacy, defined in terms of efficiency, became a hygiene factor,
a necessary condition for acceptable government but insufficient in itself to legitimise
government either before or after 1997.
Responsiveness
In July 1992, when Chris Patten assumed office as the last Governor of Hong Kong, the
possibility of legitimating the post-handover polity by democratic means had already
disappeared. It was clear that, even though directly elected members had been introduced
to the legislature for the first time in 1991, the Basic Law precluded the possibility of
an elected government for the foreseeable future. The Chinese government also made
it clear that it would overturn electoral reforms as soon as it gained control of Hong
Kong. Patten, accordingly, sought to bolster his administration by other means. Aided
by some reform-minded senior public servants and legislators, he began to put in place
operational and legal changes to the relationships between the civil service and the
public.15 These changes were specifically designed to transform the public service from
a colonial bureaucracy to an organisation which was more responsive, accountable
and open and which enhanced citizens rights to information, data protection, freedom
from discrimination, and legal aid. They were grounded in the need to reduce the
regimes legitimacy deficit,16 to strengthen the civil service as a bastion of institutional
stability during the transition, and to provide some assurance for a future in which the
government, if not fully democratic, might at least respond positively to citizens needs
and demands.

Responsiveness, defined to include a culture of service to the public, was a key
value. The idea of a culture of service took some of its intellectual substance from
British practice and from the Organisation for Economic Co-operation and Development
which had given some thought to identifying the features of a responsive administration.
These included the notion that the public should be able to readily understand how
government worked; that it should encourage citizens to participate in policy-making;
that it should satisfy their needs and that it should be accessible.17 At the heart of the
idea was the concept of accountability since, if a government met those criteria, it would
be recognising its responsibilities to its citizens in important respects. In Hong Kong,
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of course, there had been many other values, such as efficiency, which, historically, had
been far more important than the notion of responsive administration and to which the
government remained committed.18

In his policy address in October 1992, Patten made clear that the principal aim of the
public sector reforms was not only improved efficiency but also more open, transparent
and responsive government. Performance defined in terms of satisfactory public policies
or efficiency was not in itself sufficient to meet public expectations:
Good government is about much more than simply finding the wherewithal
to upgrade our programmes, to improve our social services or enhance our
infrastructure. An increasingly prosperous and sophisticated community quite
rightly demands greater openness and accountability from the public sector
which it pays for and an official attitude of mind that regards the public
as clients not supplicants.19
The initial focus of the reforms was simply to improve communication between civil
servants and the public. Civil servants were required, for the first time, to identify
themselves by name; interim replies to correspondence were to be received within ten
days; government forms were to be simplified and abolished if they were found to be
unnecessary; and civil servants were to receive training to achieve new standards of
courtesy and helpfulness.20 These were seen as basic and preliminary measures. The
broader aim was to introduce performance pledges which would be adopted in all
government departments providing services to the public.
Performance Pledges
The idea of performance pledges was drawn from the Citizens Charter in Britain
which set out the standards which the public had a right to expect from government
departments. In Hong Kong, they were first introduced in the departments which had
the most contact with the public: the Hospital Authority, the Department of Health, the
police, fire and ambulance emergency services, immigration control points, the Inland
Revenue Department and for Transport Department officials who dealt with vehicle and
driving licences.21 In addition, departments were encouraged to set up customer liaison
groups to meet quarterly or bi-annually to provide feedback on services and to reflect
consumer preferences.

The pledges were at first greeted with some suspicion in the civil service. The
Finance Branch thought that there might be increases in operating expenses, which there
were, and the departments thought that the standards set might be unattainable, which
proved not to be the case. By October 1993, 30 of the 50 government departments had
produced performance pledges, 20 had created user or customer liaison groups, over
4,400 government forms had been reviewed and 800 had been abolished, and over
30,000 civil servants had attended training courses to improve their skills in dealing
with members of the public.22 By the following year, all departments and many statutory
bodies and public corporations, such as the Hospital Authority, the Mass Transit Railway
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and the Kowloon-Canton Railway, had produced performance pledges. Commitments to

the public were prominently displayed in government offices throughout the territory;
service to the community became the new public sector credo.

There were considerable differences in the types of pledges the departments made
to their clients. This was partly a reflection of the diverse functions that they performed
but it was also a result of the potentially conflicting values that the government sought to
emphasise. Performance pledges were to serve the functions of improving relationships
with customers, imparting a customer focus to staff, acting as a management tool in
daily operations, providing performance standards for staff, and providing a mechanism
for reporting performance to customers and the community at large.23 This wide brief
enabled departments to put their own construction on what should be included in the
pledges. At least three separate elements could justifiably be included in a performance
pledge.

The first of those elements was a commitment to certain values that the department
would respect in its dealings with the public. The Social Welfare Department, for
example, pledged that its civil servants would be courteous, fair, respect confidentiality,
respect privacy, process requests promptly and have regard for personal circumstances.24
A second element of performance pledges, which focused on the performance standards
and efficiency, eventually received greater emphasis in the pledges than the expression
of the core values governing the relationship between civil service and the public. Some
departments defined their functions in terms of their efficiency in delivering services,
not in how courteously or fairly they dealt with clients. The Fire Services Department,
for example, assessed its performance on how quickly it responded to fire alarms, how
rapidly it put out fires and how swiftly the injured were transported to hospital.25 The
situations in which it was usually required to deal with the public evidently did not leave
much room for social niceties.

Even departments which had considerable contact with the public in less difficult
circumstances, such as the Housing Department, the Water Supplies Department and
the Trade Department, chose to focus their performance pledges on targets rather
than values.26 Targets were an integral element of the performance pledge27 and those
responsible for providing guidance on their implementation within the government
reinforced the notion that performance rather than responsiveness was the aim of the
exercise. The Efficiency Unit, for example, saw the importance of performance pledges as
focusing the attention of senior managers on the outcomes they produce28 which might
or might not be at the expense of other reform objectives. There was thus potentially
some tension between the values of responsiveness and those of efficiency. The Social
Welfare Department, quite appropriately, stressed responsiveness, which might not
always be efficient, while the Fire Services Department and many other departments,
equally appropriately, underlined their commitment to efficiency which might not always
be responsive. This tension was increasingly resolved after 1997 in favour of an emphasis
on the efficiency criterion with values expressed in mission and vision statements.

A third way in which some departments, such as the Education Department and the
Labour Department, expressed their performance pledges was to set soft targets and
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simply re-state their existing policies.29 One of the most important functions of the Labour
Department, for example, was to provide an employment service to assist employers
to recruit staff and to help job-seekers find employment.30 The Department promised
that a job-seeker in the busy summer months would be served within 30 minutes of
his or her appointment time.31 The provision sought to balance departmental resource
constraints with the need to make some form of public commitment. By describing
its policies and practices in its performance pledge and failing to provide evidence of
improved service, the Department left itself open to complaints about the substance
of its policies and practices. The Federation of Trade Unions, for example, criticised
the departments performance pledge on the grounds that it did nothing to improve the
convenience of the job-seeker and suggested changes to existing practices.

Yet there was much going on in the Labour Department which was not reflected in
the official performance pledge but which was intended to meet the culture of service
requirements that were central to the governments reform programme. The Department
issued internal guidelines on standards of service which were designed to make the staff
more responsive. They included instructions to be patient, courteous and flexible, to
wear a pleasant smile and to identify themselves with name badges if they were dealing
with the public. There were also explicit directions about the maintenance of the office,
ensuring that queuing systems were efficient and fair, that the complaint procedure was
prominently displayed and that staff should be deployed effectively to meet changes in
demands for services.32 The Labour Department did take the reforms seriously and made
some effort to try to ensure a more pleasant and efficient atmosphere in its dealings with
the public.

Most civil servants seemed to believe that performance pledges did make a
difference to their work. In a survey of 414 executive officers conducted in 1999, 75%
either disagreed or strongly disagreed with the statement performance pledges have not
made much difference to the work of the department: we still do things the old way.33
Most of the executive officers who were surveyed had implemented the pledges since
their inception. But there were differences between those whose departments had direct
dealings with the public and those whose departments were mainly responsible for
servicing other government departments and who did not see much change as a result
of the reforms. There was also some scepticism about the way in which targets were set
or the way in which the government allegedly massaged figures for best effect. Although
only 11% of the respondents agreed with the statement that the performance targets
set by my department are too easily achieved, 34 those who were critical pointed to the
vagueness of the targets and playing with figures. As one respondent from the Police
Force remarked: (t)he performance pledges are carefully designed so that they will be
met even (if) we do things the old way. Another respondent noted: (t)he performance
pledges of this department are qualitative rather than quantitative. As a result, people
(that is, civil servants) do not have much change. Whether they expressed their views
in terms of the limited impact of values or in terms of the imprecision of targets, critics
of the performance pledges clearly believed that they had done little to change the
underlying culture of the civil service.
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At the interface between the public and the civil servant, there were nonetheless
signs that performance pledges had some effect both on the civil servants and on their
clients. This might be explained partly by the attitude of civil servants themselves towards
the public. By the 1990s, the civil service might still be colonial in its basic structure and
culture, but over 99% of its employees were local Chinese. Although senior civil servants
often privately remained paternalistic towards the public, they also believed that the Hong
Kong political system was not democratic enough and that people should be permitted
to participate more in their own affairs.35 In the 1999 survey of executive officers, there
was strong support (68% approval) for the liberalising reforms of the Patten era but a
much more negative reaction to human resource management reforms and other later
managerialist reforms.36 There is some suggestion, then, that civil servants may have
been favourably pre-disposed towards performance pledges focusing on responsiveness
rather than efficiency.

Civil servants may also have seen the pledges in a positive light because they were
accompanied by improvements to their work conditions. Offices were painted, counters
were re-designed to make information more easily available and to facilitate interaction
with clients, and some departments introduced awards for best customer service offices.
The tension at the outset between the Finance Branch and the departments over costs
was gradually governed by some informal rules. The department made the pledge,
seeking more funding to make their operations more efficient and customer-friendly; the
Finance Branch sought to hold them to their promises and would not grant additional
funding if the pledges were not met. Most departments introduced projects to motivate
their staff to provide better service. These included a competition for the friendliest
clinic in the Department of Health, a competition for the best counter service in the
Immigration Department and a staff quiz on the work of the Trade Department.37 In the
Labour Department, all ten local employment service offices were involved in a contest
for the best customer service. While the criteria tended to be focus on quantitatively
determined efficiency measures rather than the quality of the service, there was also
some recognition that customer reactions to the service they received were an important
element of the pledges.

It is difficult to assess the effects of the performance pledges on the regimes political
support and legitimacy in the last years of the transitional period.38 In the wider context
of its legitimacy problems with consent and legal and moral authority, performance
pledges probably did little more than marginally reduce the legitimacy deficit. Yet they
were important in enhancing responsiveness, improving the public image of the civil
service, raising the morale of civil servants and meeting public expectations of better
service. At a time when senior Hong Kong Chinese civil servants were increasingly
seen as major political figures, when their interaction with members of the legislature
was constantly in the news, and when the Chief Secretary herself was seen as a leading
candidate for the future Chief Executive position, performance pledges contributed to the
high public regard for the civil service. Both the British and Chinese governments helped
to reinforce these positive public attitudes of the civil service. The performance pledges
were attempts to improve responsiveness throughout the civil service. But citizens tend
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to focus on those departments and statutory bodies which directly affected their wellbeing such as the Police Force, the Housing Authority and the Hospital Authority. In
the following sections, we examine the extent to which responsiveness as a value was
reflected in the changed practices of those organisations both before and after 1997.
Responsiveness in Key Government Departments

Responsiveness in the Police Force
In the context of the Patten reforms, there was some pressure on the Police Force to be
more community-centred and to introduce practices which would identify its future role
as the police of the people rather than as the most visible representatives of colonial
rule. This was not an entirely new role. In the 1970s, the Force had run communitybased programmes, such as neighbourhood policing units and Junior Police Call, with
considerable success.39 These schemes remained in operation in the 1990s but there was
more emphasis on enhancing communication with local organisations and community
leaders, developing a more explicit culture of service, establishing mutual trust with the
public and improving the image of the Force. There were considerable internal changes
within the Force itself in the period immediately before the retrocession. The reduced
number of expatriates in senior positions, the appointment of a local Commissioner of
Police, and the prospect of recruiting well-educated officers into the senior ranks also
helped to create the underlying conditions for a shift from its former para-military role
to more community policing.

By 1994, there had been a review of the Forces command structure which
recommended some possible reforms and organisational changes at senior levels.40
Although there was scepticism among senior officers about the value of the review, the
proposal to establish a Service Quality Wing (SQW) was eventually accepted and set
up under an Assistant Commissioner of Police in May 1994.41 In March 1995, the SQW
produced a policy document on Force Strategy on Quality of Service which was based
on the private sector notion of Total Quality Management and on the practices of the
British police forces.42 The Force Strategy aimed at developing
a culture which will involve all officers at all levels in continually
striving for improvement to ensure that services provided by the Force are
effective, efficient and economical and that, whenever practicable, meet the
expectations, in regard to quality of all our customers, both internal and
external.43
There was also a commitment to conduct periodic opinion polls and customer satisfaction
surveys which signalled its intention to pay more attention to relations with the
public.

The first customer satisfaction survey, undertaken by an independent consultant, was
conducted in December 1995.44 It found satisfaction levels with Force performance at
78%; only 3% of respondents regarded the performance of the police as poor although
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19% gave unsolicited adverse comments on the service manners of police officers.45
The survey, together with the results of a consultation process within the Force and
with the public, was used to produce a Vision and Statement of Common Purpose and
Values which was intended to define the role of the Police and to commit it to some core
values such as fairness, impartiality and compassion, acceptance of responsibility and
accountability, professionalism, dedication to quality service, responsiveness to change
and effective communication inside and outside the Force.46

The Force made increasing efforts to identify particular problems in its relations
with the public. In March 1997, an independent survey of 804 randomly selected people,
who had been involved in cases of non-violent crime, nuisance, dispute, minor assaults
and traffic accidents, was carried out.47 The findings were again generally positive with
only 5% considering the police performance to be poor or quite poor. A majority (69%)
of respondents thought that the police were courteous and rated this as the best aspect of
their performance while their speed and efficiency received the lowest rating.48 Another
survey conducted in 1999 found that, while respondents thought that the Force was
professional and efficient, they did not think that it was either accountable or transparent.
Some reservations were expressed about the police role in community relations and the
manner in which the police conducted their business. Only 35.4% were satisfied with
the police community relations effort and only half of the respondents were satisfied
with the manner in which the police conducted their business.49 Subsequent surveys,
however, have tended to support the view that the police are now much better regarded
by the public than under colonial rule. In 2006, the Census and Statistics Department
undertook a survey of crime victimization, finding that only 19% of crimes were reported
to the police and that the reporting of violent crimes was even lower.50 Some 89% of
those who did report crimes, however, said that the manner in which the police treated
the case was good or very good.51

In their study of policing in Hong Kong, Lo and Cheuk identify some positive
outcomes from the community programmes for the relationship between the police and
the public.52 They note that there have been significant improvements in communications
between the police and the public, particularly because the Police Community Relations
Officers have paid close attention to community liaison. They observe, too, that
police-public relations and the image of the Force have both improved markedly. On
other issues, success has been less noticeable. Lo and Cheuk note constraints on the
programmes relating to community policing. The most important of these, they believe,
is a lack of institutional commitment within the Force to community relations. The law
enforcement function takes clear overriding precedence over all other roles performed
by the Force. This, in turn, has consequences for the resources available for officers
engaged in community work, for their promotion opportunities, and for the organisational
capacity of the units for which they work.53

There are other constraints which may undermine much of the greater responsiveness
that has characterised the Force since the introduction of the reforms. The increasing
number of protests has created difficult conditions for the Force, especially when
protesters break the law by organising demonstrations that have not received police
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approval. The police coped well with the hundreds of thousands on the streets during
the July 2003 demonstrations and no arrests were deemed necessary. But in other
demonstrations the police have been accused of being high-handed and using unnecessary
force both with local democratic activists and with Korean demonstrators at a World
Trade Organisation meeting held in Hong Kong in December 2005.54

The emphasis on reform in the mid-1990s appropriately reflected a changing
political climate and enabled the Force to deal rather better with the difficulties of the
post-1997 order than it would have done with its previous structure. It seems probable
that its community policing role will grow as government programmes expand. The
amendments to the Domestic Violence Ordinance, for example, give the police a greater
role in handling domestic affairs than they have had in the past.55 Similarly, the solutions
offered by legislators and social workers to the potential growth of slums in areas such
as Tin Shui Wai suggest that the police should play a more interventionist community
role.56 The Force is not yet as far along the road to taking up that role as some of its
critics might wish but it has made significant ground over the last decade towards
becoming more responsive.
Responsiveness in the Housing Authority

The government is, by far, Hong Kongs largest landlord. In December 2007, 30% of
the population lived in public rental housing with a further 18% in subsidised home
ownership flats.57 The extent of the governments involvement in the provision of
public housing means that its policies have an impact, directly or indirectly, on virtually
everyone in Hong Kong. The conditions governing eligibility for public housing, the
quality of the flats and policies on rent and home ownership directly affect tenants.
Since the termination of the Home Ownership Scheme in November 2002, when the
government decided that it would suspend indefinitely the production and sale of
subsidised public flats to tenants in the interests of stimulating the property market,
housing policy has also affected their aspirations for future home ownership.58 Equally
important, government decisions on housing have an impact on those on the waiting
list for public housing some 110,000 households in December 2007 and on the
supply and demand and price of housing in the private sector.59

For a government attempting to be responsive to the needs of its citizens, public
housing poses two sets of problems. Some problems are those normally associated with
landlord-tenant relationships: difficulties with rent increases and maintenance. Public
housing was first introduced in 1954 because the government wanted to get the squatters
off the land and move them into re-settlement blocks. Its relationship with its future
tenants was based on persuasion but it was prepared to move them forcibly to achieve
its ends. The colonial government recognised that there was a need for communitybuilding in the re-settlement estates. The rules were not determined by mutual agreement,
however. The government prescribed how its tenants would behave.

The relationship evolved gradually in tune with the development of local level
institutions but with a continuing dominant government role. In the 1970s, tenants were
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encouraged to form mutual aid committees which were expected to provide the estate
management with suggestions for improvements. The emergence of pressure groups, such
as the Association for Democracy and Peoples Livelihood and the Hong Kong Peoples
Council on Public Housing Policy, the increasingly political role played by professional
groups such as social workers, the creation of District Boards and the emergence of
political parties in the late 1980s may have helped to improve the position of the tenant
slightly. But, aside from the social workers, the efforts of many activists were usually
focused on those without public housing who often had to spend many years on the
waiting list. The case for the tenants was not helped by better-off occupants, who despite
being charged double rent, still chose to remain in public housing. The perception was
that the government was not charging enough rent to persuade the wealthier tenants to
leave and, in the process, was behaving inequitably towards those on the waiting list.60
When there was a demonstration at the Housing Authority headquarters against an
increase in rents, there was little public sympathy for the protesters.61

One consequence of the fragmented opposition to governments housing policy was
that the Housing Department remained the driver of the relationship with its tenants in
the estates. Pattens reforms did not produce a major change in the responsiveness of the
estate management. The existing relationship was simply incorporated into a statement
of rights and responsibilities and promises that certain targets would be met.62 Tenants
were granted the right to express their views to the Housing Department directly through
mutual aid committees or the Estate Management Advisory Committee and to appeal if
their tenancy was terminated. They were entitled to apply for rent reduction of 50% for a
year under certain conditions and to have repairs carried out by the Housing Department
or the relevant management organisation. However, one of their most important rights
to apply for the purchase of a flat under the Home Ownership scheme and to purchase
the flat in which they were living was lost in November 2002 when the government
abandoned the Home Ownership Scheme. In addition, after the Housing Department
began to contract out estate management towards the end of 2000, there was no guarantee
that the new managers would observe the same tenants rights, minimal though they
were. Nor do the established channels of communication between management and
residents seem to provide much opportunity for residents to express their views. One
study suggests that the Estate Management Advisory Committees reflects a dominant
management culture rather than serving as a participatory forum.63

The other set of problems that a responsive government had to address what was
to be done about increasing housing supply and whether public housing should be
commercialised and sold off and, if so, at what price. After 1997, this issue, for a time,
had high priority because Tung saw housing as an area in which his administration could
have an immediate impact. He set a target of 85,000 new flats a year in the public and
private sectors, a home ownership rate of 70 %, which would be partially achieved by
public rental flats, and announced his intention to reduce the waiting time for public
housing to three years.64 These proposals were reflected in a consultative exercise which
concluded in February 1998 with the release of a white paper.65 Tungs identification
of housing policy as a key area of government activity stressed the responsiveness of
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government in a rather different way from that of Patten: meeting needs through policy
rather than attempting to address problems at the interface between civil servants and the
public. In the event, the times were against the policy and Tung eventually abandoned the
production targets, admitting that the target of 85,000 flats per year was not achievable.
In November 2002, the policy underwent further radical revision when the sale of Home
Ownership flats was suspended indefinitely and replaced with a Home Assistance Loan
scheme which provided interest-free loans to enable low income families to purchase
in the market.66 Despite the failure of its overall policy, the government nonetheless did
achieve some success in reducing the waiting list for public housing, partly, it seems,
by applying eligibility criteria more strictly. By 2007, time on the waiting list had been
reduced to 1.9 years.67

We may conclude that neither Pattens emphasis on the greater responsiveness of
civil servants to the public nor Tungs proposed measures to meet citizens needs had
much impact on the formulation or implementation of housing policy. The politics of
housing revolved around long-standing intractable problems and it was difficult to make
inroads into entrenched practices, particularly during the Patten era. Tungs promises of
an expanded housing supply followed a political strategy that had boosted support for the
government since at least the time of MacLehose. It had little to do with responsiveness
other than that increased public housing supply would be popular with those on the
waiting list. When major changes to housing policy were introduced in 2002, they were
a result of economic problems and business pressure, not a consequence of deliberate
changes to the governments views of how its citizens should be treated. The new
thinking was that government should be less involved in housing provision but look
rather towards making the process of obtaining public housing speedier, more equitable
and less rigid. Under Tsang, advances were made in linking rents to affordability and
to improving the environment in the housing estates.68 The Housing Authority claimed
that this was being done in association with the tenants but it appeared to be largely
another top-down initiative.69
Responsiveness in the Health Department and Hospital Authority

In terms of responsiveness, the Health Department and the Hospital Authority offered
a different kind of challenge from that of the Police Force and the Housing Authority.
There was greater latitude for change within the system than in the housing field,
especially once the Hospital Authority had been created, but there was also resistance to
allowing patients and pressure groups a stronger voice in the way that services would be
delivered. Three issues were critical to a long-running debate: the question of patients
rights; the degree to which organisational and financial concerns had an impact on the
ability to provide services and to respond to patients needs; and the extent to which
doctors should continue to monopolise decision-making within the system.

In the 1980s, the healthcare system was the subject of considerable criticism. There
were complaints about inefficient administration, poor record-keeping, long waiting
times, inadequate hospital facilities and poor doctor-patient relationships.70 With the
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establishment of the Hospital Authority, major reforms in healthcare were expected.

Backed by the government and the Hong Kong Medical Association, it chose to focus
on the concept of patient-centred healthcare and sought to involve the community as
its partner in health. A logical outcome of this approach was the introduction of a
patients charter in 1999 (see Table 10.1).71 But because the drafting of the charter did not
involve groups representing patients interests and because it was not legally enforceable,
it was simply seen as a codification of the principles which the Medical Association and
the government thought should form the basis of doctor-patient relations.
Table 10.1 The Patients Charter
Right to Medical Treatment

The right to receive medical advice and treatment which fully meets the currently accepted
standards of care and quality.
Right to Information
The right to information about what healthcare standards are available, and what charges
are involved.
The right to be given a clear description of your medical condition, with diagnosis,
prognosis and of the treatment proposed including common risks and appropriate
alternatives.
The right to know the names of any medications to be prescribed, and its normal actions
and potential side effects given your condition.
The right of access to medical information which relates to your condition and
treatment.
Right to Choices
The right to accept or refuse any medication, investigation or treatment, and to be informed
of the likely consequence of doing so.
The right to a second medical opinion.
The right to choose whether or not to take part in medical research programmes.
Right to Privacy
The right to have your privacy, dignity and religious and cultural beliefs respected.
The right to have information relating to your medical condition kept confidential.
Right to Complaint
The right to make a complaint through channels provided by the Hospital Authority, and
to have any complaint dealt with promptly and fairly
Source: The Patients Charter, www.ha.org.hk (accessed 4 December 2008).

The Department of Health, which is responsible for various outpatient services
and for public health information, has also tried to become more responsive to patients
needs. It produced its first performance pledge in 1995 which focused principally on
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reducing waiting times and providing services within specified time frames, problems
which were the source of many complaints.72 The pledge has subsequently been related
to each of the many services which the department provides with targets on waiting
times and treatment normally being fully met.73 The Department has also been conscious
of the need to improve its responsiveness in other areas. It has conducted surveys on
staff attitudes and has also run annual consumer satisfaction surveys, reporting an
ever-increasing level of satisfaction with its work.74 While the results have to be treated
with some caution, there are other supporting surveys which suggest that patients are
generally satisfied with the healthcare system and with the dedication of doctors and
nurses, although not with the way in which the Hospital Authority handled the SARS
outbreak.75

A second controversial question is whether the healthcare system is well organised
and appropriately financed to meet citizens needs. In 1999, the Harvard Team,
government-appointed consultants, argued, inter alia, that the quality of healthcare
was highly variable, that doctors were inadequately regulated, that the system was
too compartmentalised and that it did not serve the patient as well as it might.76 The
consultants also thought that the government was unlikely to be able to continue to afford
a level of healthcare service which had seen public health expenditure grow rapidly.77
The Hospital Authority rejected the consultants findings, which included increasing
charges, in favour of more incremental improvements to the system, changes which
were more politically palatable.78

The issue of funding did not go away. In 2008, a government consultative document
put forward various options for reforming healthcare financing, all of which involved
higher contributions from citizens.79 The government argued that, with an ageing
population and increasing demand, healthcare financing would grow faster than the
economy and would not be sustainable. It appeared to favour a Personal Healthcare
Reserve Scheme which would require workers to save a proportion of their salaries to
buy medical insurance.80 But there was considerable opposition to the proposals from
politicians and pressure groups who believed that the scheme amounted to double
taxation of the middle class.81

A third problem that has affected responsiveness has been the location of power
within the Hospital Authority and the Department of Health. Doctors have dominated
the system to the virtual exclusion of any other interested parties. Not only have they
been in charge of the hospitals, they have also held most of the senior positions in the
Department of Health. The argument against this domination has been that in order to be
responsive the system has to reflect the wider views of the community. The government
has supported this line of reasoning although it has not always been sympathetic to the
pressure groups which take up the patients cause. As pressure groups have become
more active, it has made some concessions to their demands for representation on key
committees and boards.82 The Hospital Authority has community representatives on
its board and on the governing committees of its hospitals.83 The Health and Medical
Development Advisory Committee, a source of policy advice, has some members who
are politicians although the majority are doctors.84
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Despite greater community representation, the major healthcare pressure groups
still feel that it is the doctors who make the critical decisions and that non-medical
representation on the Hospital Authority board or on the governing committees of the
hospitals is a form of window-dressing.85 Yuen and Lieu found that both chief executives
and members felt that the boards were not performing important tasks such as decisionmaking and planning.86 The committees are often seen as largely advisory bodies and
major decisions are taken elsewhere in the system. It may be that the board and the
committees nonetheless serve as useful arenas for raising community and patients
concerns.

It is evident from these case studies of key departments that responsiveness can be
interpreted in different ways in different policy areas. One factor that appears to have
been important in determining whether the reforms were successful is the extent to which
they were taken seriously by senior management. In the Police Force, senior police
officers were committed to a reform agenda which was to some extent imposed upon
them by changing circumstances within the Force, by the need to adopt more community
policing and because regime change required a new perspective on relations with the
public. The Hospital Authority was focused from the outset on providing a communitycentred system. Its problems still lie in translating those ideas into an organisational
format which reflects community views and leads to more responsive programmes. In
housing policies and practices, despite government claims to the contrary, the system
does not appear to place as much value on the views and expectations of the estate
tenants as it might. If these three examples are representative, then we might conclude
that attempts to make the Hong Kong government more responsive have been successful
but that there is still clearly considerable room for improvement.
Efficiency, Responsiveness and the Post-1997 Administration

In post-1997 Hong Kong, although Pattens reforms remained in place, the values of
efficiency and responsiveness were re-interpreted, sometimes conflated and confused,
sometimes defined in very different ways. During the first Tung Chee-hwa administration,
efficiency was the principal goal; responsiveness was desirable but subject to the dictates
of executive-led government. After the 2003 demonstrations, this position was no
longer tenable and the government tried to increase its responsiveness, defined more
in terms of its abilities to make policies that people wanted than in terms of its direct
interaction with citizens. In this section, we assess what has happened since 1997 to the
values underlying the original reforms.
Improved Technology and Better Performance Management

Despite the relative lack of success of the major public sector reform programme
introduced in 1999 (see Chapters 4 and 5), the government continued to press for
greater efficiencies in other areas, notably in performance management and technological
improvements. The substitution of efficiency for responsiveness immediately after the
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retrocession had an impact on the way in which performance pledges were drafted
and implemented. Many pledges were no longer concerned with outlining the values
that might govern their relationship with the public. Instead, departments used them to
quantify their targets and to record the extent to which services were provided within
time limits. Thus, for example, the Highways Department has a target of repairing
damaged traffic signs within 24 hours, a new standard that was introduced in 2006
and was achieved in 70% of cases in that year.87 In general, the performance standard
reached is used to improve upon delivery times although there is considerable scepticism
about the ways in which achieving the goal are met both among civil servants and the
Audit Commission which has queried whether performance pledges do in fact result in
improved efficiency.88

While it is possible to argue that greater efficiency was always part of the rationale
for introducing performance pledges and that faster completion times and targets are a
means of being responsive to the citizens interests, there are at least two ways in which
the values of responsiveness and efficiency could conceivably conflict. The first is that
downsizing the civil service might leave too few civil servants to deal with customer
enquiries, complaints and demands for services. The government has argued that this
has not happened because its productivity and efficiency programmes have been based
on delivering the same services with fewer resources. However, while in the initial
phase of an efficiency programme, it may be relatively easy to find savings through reorganisation without reducing services, as time goes on, such savings become more and
more difficult to identify without eliminating substantive programmes. The temptation
for a government with a serious budget deficit is to reduce its front-line staff in social
services or to contract out services. There is some evidence that this is the strategy that
has been adopted by the Hong Kong government.

It has been observed that the governments social policy expenditure is budget
driven and deeply related to its philosophy of financial management, which ties the
level of...spending to the financial situation of the government.89 Table 10.2 gives one
indicator of the effects of this approach. In the often difficult economic circumstances
that Hong Kong faced after 1997, cuts to the civil service establishment have been
focused particularly on social services departments. New appointments have also tended
to be made to disciplinary services departments rather than to those concerned with
delivering social policy outputs. This does not mean, of course, that the government is
not concerned with providing social services but it would clearly like to see voluntary
organisations or the private sector play a larger role. Part of the explanation for the
fall in the establishment of the social services departments lies in decisions to divest
the government of some of its responsibilities. In terms of the interaction between
providers and clients, this passes the obligation to be responsive to an agency outside
the government. But it does not entirely relieve the government of its responsibility
for ensuring services are delivered in an appropriate manner, particularly those which
it funds directly. As the Efficiency Unit notes, services can be outsourced but not the
ultimate responsibility for their delivery.90 The danger is that the need to deliver services
efficiently and cost-effectively overrides the need to deliver them responsively.
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Table 10.2 Establishment of Social Services and Disciplinary Services

Departments, 1997, 2008
Department
1997
2008
Percentage

+/

Social Services
New
appointments
since 2000
Education
Health
Housing
Social Welfare
6585
6689
14776
4996
5846
4912
7624
5032
11.22
26.57
47.33
+0.72
468
133
7
428
Customs and Excise

Correctional Services
Fire Services
Immigration
Police
4273
7576
8296
5273
33871
5606
6650
9296
6460
32357
+31.20
12.32
+12.05
+22.51
4.47
913
595
1364
1374
4712
Disciplinary Services
Source: Civil Service Bureau, Civil Service Personnel Statistics 1997 (Hong Kong: The Bureau,
1997), 1724; Civil Service Bureau, Civil Service Personnel Statistics 2008 (Hong Kong: The
Bureau, 2008), 2329.

A second way in which responsiveness might conflict with efficiency is in the
use of technology to increase productivity. The development of e-government is a key
plank in information technology policy where the government seeks to be a leader in the
field. The 2008 Digital 21 policy statement says that its aim is to achieve a deepened
e-government programme, with increasing interface with citizens and business, thereby
encouraging migration to the electronic channel.91 The policy statement also claims that
the government seeks a citizen-centric mode of public service delivery with strong
emphasis on continuous engagement.92 An earlier version of Digital 21 stated that the
strategy exemplified a government that places citizens at the centre of everything it
does, and which makes citizens its very purpose and maintained that it provided citizens
with a choice about how and when they communicated with government.93 While this
is impressive rhetoric, it may carry with it political expectations about responsiveness
which technology by itself cannot deliver.

E-government is primarily a means of improving efficiency and reducing costs,
not necessarily a way of enhancing harmonious government-public relations. It enables
citizens to use internet facilities, for exam ple, to register as a voter, access the weather
report, tender for government contracts, pay government bills, lodge tax returns, search
for and obtain copies of birth, death and marriage certificates, apply for a senior citizen
card or provide notification of a change of address.94 In 2008, the governments portal,
www.gov.hk, provided 1200 such electronic services.95 While it is a relatively simple
matter to put electronic forms on websites, it is quite another to get people to use them.
As the then E-government Co-ordinator admitted:
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Our efforts at getting people to do transactions on the netto change their

habits and stop using counter services or traditional channelshas been
much more mixed.96
The Co-ordinator attributed the difficulties of persuading people to transact on-line

to the problem of providing a service more customer-friendly than the original.97 The
principal problems, in his view, lay in civil service resistance to the introduction of egovernment and in competing jurisdictions which hampered the process of change. The
ombudsmans report on the Integrated Call Centre (see below) provides some evidence
of such resistance but it is, of course, also possible that the major resistance comes from
citizens who continue to prefer to use traditional means of contacting the government.
The government has tried to use technology to improve its public enquiry and complaints
system. In July 2001, it introduced an Integrated Call Centre (ICC) for twelve (later
twenty) government departments which was designed to provide a one-stop roundthe-clock service to handle a range of enquiries and complaints... 98 The ICC uses
an interactive voice recording system to transmit calls to operators on the basis of
their language or speciality. Operators then use a computerised system to provide an
immediate response to callers or to send messages to the appropriate departments for
follow-up action.99 In November 2001, in addition to the ICC, the Efficiency Unit set up
the 1823 Citizens Easy Link, a single-number hot line which was intended eventually
to serve as the only port of call for all complaints and enquiries. The system was
expected to be both responsive and convenient and to provide increased productivity
and efficiency gains. However, there were soon numerous complaints and, in October
2002, the ombudsman decided to launch a direct investigation of the ICC.100 The resulting
report acknowledged that the ICC had brought improvements to the public enquiry
service. But the investigation also discovered shortcomings: delays and lack of response,
problems with transmission of complaints and outdated information, and problems with
maintaining personal data privacy. Most significantly, the ombudsman found that the
ICCs organisational culture was more task than people-oriented and that there were
tensions between the ICC and the participating departments.101

Despite her recommendations for change, the Ombudsman continued to receive
complaints about the ICC and, in June 2007, launched a further investigation of the
service.102 Most complaints and enquiries were still lodged through departmental hot
lines rather than through Easy Link although the single number hot line was proving
increasingly popular. Overall, the use of ICC services had climbed from 1.8 million in
2004 to 3.1 million in 2007.103 But there were still major problems with the system. The
Ombudsman found inter alia that the service was limited and patchy; that there were
difficulties when issues crossed departmental boundaries; that some departments were
considering dropping out of the system; and that coverage was, in any case, limited to
only twenty departments, far from its ultimate goal of an integrated call centre.104
The Efficiency Unit, which runs the ICC, has promised to make changes105 but it will
be difficult to overcome a culture where departmental boundaries are fiercely guarded,
where efficiency rather than responsiveness appears to be the primary goal, and where
the ICC takes the blame for delays that are often departmental responsibilities.
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Despite these efforts to improve the public enquiry and complaints system, and the
governments impressive attempts to increase the services available on-line, it is not
clear that a significant percentage of the population can be persuaded to abandon their
long-standing practice of appearing in person when they have a problem or are required
to complete a form. Many government services, in any event, still do require a personal
appearance. The difficulty with technology of this sort is that it can create divisions
between those who know how to use computers and are willing to do so and those who
do not. Although by 2007 some 69.3% of the population over ten years of age knew
how to use a computer, only 37.6% of them had used their knowledge to access online
government services.106 As might be expected, the highest use of government online
services was among the young and the better educated.107 Conversely, the elderly and
the less well-educated, who may well have greater need of government services, were
much less likely to use computers. Only 37.8% of persons between 55 and 64 and only
9.7% of those over the age of 65 knew how to use a computer.108

Although there has been increasing use of government online services and of the
free Wi-Fi wireless broadband internet services which are installed at over 5000 hot-spots
around the territory,109 fundamental problems remain. E-government is an impersonal
activity which may be convenient and appreciated by those who use it but which can
also raise the hackles of those frustrated by poorly-informed operators or recalcitrant
electronic forms. E-government may well make government more productive and
efficient but it will not in itself make the government more popular or more legitimate in
the eyes of the public. Efficiency is a hygiene factor people expect their government
to be efficient not a motivator of support for the system. Responsiveness as a value is
more about enhancing trust than enabling citizens to deal with government efficiently. If
the Hong Kong government still believes it can engender trust by being more efficient,
it may have misidentified its principal problem.
Re-defining Responsiveness
After 1997, responsiveness was re-defined in two ways. First, in his 2001 policy address,
Tung Chee-hwa said:
Every person employed by the Government is there to serve the community
aim to make the civil service more accountable and to enhance service
culture.110
Efforts had been made to put this into practice through the Efficiency Unit which, under
its Serving the Community programme, sought to transform the service culture in
the public sector to being more open, accountable and customer-friendly.111 Between
1998 and 2001, some $10 million was spent on educating staff on customer-focused
attitudes and most of the pre-1997 innovations such as customer liaison groups, service
awards and office improvement projects remained in place.112 Subsequently, however,
post-1997 public sector reform focused more on attempting to meet increases in
expectations without adding to the limited resources available or making excessive
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demands of existing resources.113 In short, the reason for changing existing practices
was to improve efficiency, using the same or less resources to achieve greater output.
The Efficiency Units future projects, consequently, focused largely on productivity,
performance measurement and other means of increasing efficiency. By 2008, its
citizen centric services programmes were mainly concerned with attempting to use
private sector techniques in a customer management and assessment programme and
rectifying the continuing problems of the Integrated Call Centre.114 The Units major
pre-occupation, as its name suggests, is with efficiency. The government recognises the
need to be responsive but it seems to feel that enough has already been done to improve
relationships with the public and that what is now needed is simply fine-tuning.

A second sense in which responsiveness was re-defined was to suggest that it related
as much to making policy that met public expectations as to the interface between civil
servants and citizens. Tung talked about this as early as 2001 when he said:
[W]e need to have a more acute sense of the pulse of the community in
formulating our policies. We need to do our consultation work well to
ensure that all public views are fully reflected we need to understand
our communitys inclinations and strive to gain their understanding and
support.115
This is one view of responsiveness, but it is a top-down rather than an interactive

view and it was intended to be taken in the context of the continuing pre-dominance
of executive-led government over public opinion.116 The government saw its role as
formulating policy, consulting on the acceptability of its proposals and then making
such modifications as it considered necessary. It was the government, not the citizen,
which made the first and final decision on what would become policy. Citizens views in
themselves, however strongly held, were not a sufficient reason to deflect the government
from what it wanted to do. They had no legitimate part to play in the process once the
government had determined its course of action, other than to support the implementation
of the policy.

By 2003, this position was clearly no longer tenable. The manner in which the
government consulted the population over the national security legislation, the disregard
for public opinion in drafting the legislation, and the subsequent massive demonstrations
all indicated that little account had been taken of the communitys wishes. In the 2004
policy address, the first after the demonstrations, which was sub-titled promoting
people-based governance, Tung suggested in rather vague terms that the government
would attempt to improve its relationship with experts and opinion leaders, the middle
class and the legislature within what appeared to be the unchanging framework of the
existing system.117 This theme was pursued in his 2005 policy address when he frankly
admitted the shortcomings of the way that his administration had sought to make
policy.118 He promised a more transparent and responsive administration although still
without providing much detail. Tsang, similarly, has pursued people-based governance
using central consultative mechanisms as venues for the community to express their
views on policy issues119 and setting up an e-forum to draw on expert opinion on policy.
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He has also promised that he would ask civil servants to monitor public views expressed
on the internet.120

If the goal of legitimation through responsive policy-making is ever to be realised,
then information, transparency and trust and new channels of communication with the
public are essential pre-requisites. It is difficult to fault the Hong Kong government on
the quantity of information it provides to its citizens or on the accessibility to the media
of senior figures in the government. The government website is a mine of information
about what the government is doing about anything and everything. Government
is perpetually concerned with the mood of public opinion, providing consultation
documents on proposed new policies and monitoring the views of the public through
surveys and through the hundreds of advisory boards that have been set up to keep
government bureaus and departments in touch with changing political, social, legal and
technological developments.

The problem is that there is often suspicion that the information provided is less
than the full story, that sensitive information has been withheld or manipulated or that
it has been presented in such a way that it is difficult to form a judgement. Under such
circumstances, civil society will create its own versions of reality, conspiracy theories
will flourish, and the broad community consensus on values that the government wants
will be difficult to achieve. Rather than rational dialogue with an attentive public, the
government under both Tung and Tsang has found itself under siege from militant and
suspicious civil society organisations. An indication of the beleaguered nature of the
executive was that the then government training arm, the Civil Service Training and
Development Institute, flew in academics from Harvard to teach directorate-level civil
servants about how the public can be persuaded of the value of government programmes
in an adversarial political environment where the press and opposition politicians are
constantly attacking public officials, policies, programmes and actions.121 This suggests,
quite accurately, that rather than calm discussion leading to consensus, political debate is
instead highly charged with the protagonists often taking fixed and intransigent positions.
It also suggests that on major issues there is usually a pro-government coalition pitted
against a loose, somewhat anomic, opposition of political parties, pressure groups and
critical media commentators. Civic participation that the government seeks to support
has not been the kind of civic participation that many believe is likely to lead to their
preferred outcomes. Debates on policy, in consequence, are often abrasive, polarised
and damaging to the governments image.

These developments are symptomatic of problems with the constituted political
order and are unlikely to be resolved by simply increasing the flow of information to
the public. If the political institutions are not viewed as appropriate or credible channels
through which rational dialogue might take place and if whatever the government tells
the people is viewed with mistrust, it is not surprising that those with grievances take
to the streets to express their views. Between 2002 and 2006, there were 11,100 public
protests or processions in Hong Kong.122 Although many of these were no doubt by the
same groups and many were probably small and insignificant and not all were against
the government, they were so numerous, and police action in one instance was so
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controversial, that the demonstrations themselves became a political issue.123 The Security
Bureau put the governments view on how public opinion should be expressed:
People should discuss matters in a rational and objective manner instead
of emotionalising and politicising the matters. In particular, the LegCo
Councillors who have sworn to uphold the Basic Law and abide by the law,
should not take the lead in breaching the law and challenge front-line
officers to arrest them, as these actions might provoke others to cause a
breach of the public peace.124
These comments reflected the governments continued commitment to the existing

institutions, its pleas for rational dialogue, and its fears that the demonstrations might
soon lead to violence, but they did not offer any positive ways of closing the gulf
between itself and the public.

Although the government has vastly increased the amount of information available
to the public about its activities, its actions often seemed to contradict its formal
commitment to transparency and its ability to win public trust. Under Tung, in particular,
the government was often secretive, disinclined to release any information that might
be politically sensitive or that could be used as a rod for its own back. There were a
number of incidents the awarding of the contract for the high-technology Cyberport
without the usual process of open tenders, the decision not to prosecute a newspaper
owner for false circulation figures, and the veiled threats to Falun Gong, for example
where critics accused the government of being less than transparent.125

The case of Robert Chung Ting-yiu, a researcher at the University of Hong Kong,
also raised questions about government attempts to control information and about its
views on academic freedom. Chung was conducting polling research on political and
social issues, the results of which received some prominence in the local press. Among
the regular telephone polls he supervised and subsequently publicly reported were
surveys of satisfaction with the governments performance and the popularity of the
Chief Executive. The polls repeatedly showed low levels of popularity and high levels
of dissatisfaction with government performance.126 In July 2000, Chung alleged in the
press that he had been given a clear message from Tung Chee-hwa that his polling
activities were unwelcome and that this message had been transmitted to him by the
Vice-Chancellor of the University of Hong Kong.127 The Universitys Council then
set up an independent panel to investigate the allegations. The panel found that one
of Tung Chee-hwas senior aides had approached the Vice-Chancellor on the polling
issue and that a Pro Vice-Chancellor, acting at the behest of the Vice-Chancellor, had
passed on messages to push Dr. Chung into discontinuing his polling work.128 The
Vice-Chancellor and the Pro Vice-Chancellor resigned as a result of the findings.

The most serious of all disjunctions between the governments actions and its formal
commitment to free exchange of information and rational debate was the final stage
before the demonstrations against the legislation to enact Article 23 of the Basic Law. The
government seemed divided within itself on whether it wished to pursue rational debate.
On the one hand, its legal officers engaged in prolonged discussion with the governments
ch.10(p.231-256).indd 254
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critics in many different arenas. On the other hand, when the opportunity came to push
the Bill through the committee stage of the Legislative Council, in the absence of the
democrats who were listening to the governments legal officers expounding on Article
23, the government and its supporters not only seized the day but passed an additional
resolution preventing further debate on the specific clauses of the Bill.129 The Secretary
for Constitutional Affairs was later to argue that it was the views expressed by the
community and Legislative Council members that persuaded the government to postpone
the second reading of the Bill.130 In reality, it was not rational debate that brought about
the change of heart but the 500,000 demonstrators who streamed through the streets of
Hong Kong on 1 July. Article 23 put the question of the governments commitment to
free debate and expression of opinion to the test with serious adverse consequences,
not so much for its willingness to consult but for the extent to which it was prepared to
make substantive changes after consultation had taken place.

In addition to increasing responsiveness through providing information, improving
transparency and building trust, new channels of communication with civil society are
necessary to reach accommodation on policy differences. Some progress towards better
civic engagement has been made under the Tsang administration.131 On many issues,
however, there is no consensus and creating new central consultative institutions, such
as the re-vamped Commission on Strategic Development, simply reflects the differences
over policy that exist in the society. They are unlikely to resolve problems, such as
constitutional issues, on which there are strong feelings and polarised groups, especially
if such institutions are created as top-down, centralised bodies whose members may not
be entirely representative of, or able to exercise political discipline over, the groups to
which they belong. If new channels of communication are to be created, they need to
tap grass-roots public sentiment to a much greater degree than the government does
at present.

Responsiveness at the interface between the civil service and the public has
improved markedly since the 1990s but it remains a value which is subsidiary to the
long-standing aim of achieving maximum efficiency in government. In its first term,
the Tung administration was concerned with managerial values: with enhancing egovernment to provide more rapid and cost-effective services and with developing
performance measures. Responsiveness, and the larger consideration of the accountability
of the government to the citizen, became after-thoughts, ex post facto rationalisations
for policies and decisions which the government intended to take. Subsequent events
forced the government to re-think its position and to attempt to produce policies which
met with greater public approval. But the government still remains executive-led and
top-down. The institutional framework does not match its continued formal commitment
to responsiveness.

Responsiveness assumes particular significance in the context of a political
system suffering from a legitimacy deficit. If a government can build trust through the
innumerable interactions between the public and the civil service, it may go some way
towards improving its public support and may also ameliorate some of the problems of
consent and the absence of legal and moral authority which afflict the system. That was
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the political calculation that Patten made when he took office as Governor in 1992. The
post-1997 government assumed that a more efficient government would necessarily be
both more responsive and more legitimate. But the evidence does not support the view
that greater efficiency alone will resolve the problem of legitimating a non-democratic
regime. Despite the claims of its many critics, the Hong Kong government, at least since
the McKinsey reforms, has never been particularly inefficient. Even if its efficiency is
raised to higher levels, the problems that the government faces in its relationships with
the public will not disappear. The difficulty is not with efficiency and performance; it is
with a political system that does not permit adequate participation and consultation on
critical issues and with a government that has passed up the opportunity to ameliorate
the situation by increasing responsiveness.
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11
Rights, Complaints and Redress
regime with a legitimacy deficit may ease its problems by conceding rights to
citizens to protect them against illegal action by the government, by dealing with
complaints against the unacceptable or corrupt behaviour of its public officials, and by
providing channels for the redress of individual grievances about unfair or arbitrary
administrative decisions. If recognition of citizens rights and complaint-handling
and redress systems become institutionalised as part of the political system, they may
compensate to some extent for the absence of democratic legitimation. It is sometimes
said that Hong Kong people have freedom but that they do not have democracy. If
they have individual freedom, that may mean that they are readier to tolerate, if not
necessarily to approve, the more arbitrary and high-handed actions of the government in
other matters which only indirectly affect their liberty. Their freedom depends, however,
on the surety that rights will be protected and that the complaints and the individual
grievances of citizens will be properly, fairly and impartially handled. If rights are
ignored and the complaints and redress systems are not credible, grievances may fester
and contribute to further mistrust of the government.

In this chapter, we examine how the debate over rights developed and the extent
to which the post-1997 government has protected them; the evolution of complainthandling bodies for systemic problems such as corruption and the work of the ICAC;
and the growth of the redress system and the problems that it has encountered. We draw
a distinction between:
rights which we use in the sense of civil liberties, belonging to individuals rather
than groups, which are protected by the legal system and possibly by other specific
institutions;1
complaints which we define as objections raised by citizens about inappropriate
behaviour on the part of public officials, particularly corruption, where the
complaint relates to the way in which the system is operating or where policy is
significantly lacking or deficient; and
redress which is the remedy sought by individuals against arbitrary or unfair
administrative action and which may be pursued through such institutions as the
ombudsman which have been established for the purpose of deciding whether the
grievance is justified.
ch.11(p.257-288).indd 257
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These distinctions are not self-contained. For example, a person seeking redress
through the ombudsman is making a complaint and, in so doing, is exercising a civil
liberty. The distinction does, nonetheless, enable us to analyse the various institutions
which have been created to meet these different objectives and the extent to which they
have fulfilled their purposes.
Rights
Until 1984, the protection of civil liberties rested almost entirely on the rule of law and
the legal system and on conventions about how the government would or would not use
its power. Under such a system, civil liberties were residual and were not embodied in
domestic legislation; as one observer describes them, they were what was left over after
the law had taken away.2 With the negotiations on the change of sovereignty, there was
evident public concern that the civil liberties that were in place would be disregarded
by the incoming regime. The Joint Declaration on the future of the territory addresses
that concern and promises that the post-1997 government will honour
the rights and freedom as provided for by the laws previously in force in Hong
Kong, including freedom of the person, of speech, of the press, of assembly,
of association, to form and join trade unions, of correspondence, of travel, of
movement, of strike, of demonstration, of choice of occupation, of academic
research, of belief, inviolability of the home, the freedom to marry and the
right to raise a family freely.3
In addition, every person shall have the right to challenge the actions of the executive
in the courts, religious freedom is guaranteed, and the provisions of the International
Covenant on Civil and Political Rights and the International Covenant on Economic,
Social and Cultural Rights, as they then applied to Hong Kong, were to remain in force.4
The covenants themselves contain many specific rights and freedoms, some of which
repeat those outlined in the Joint Declaration and some of which offer further rights of
self-determination under which a people may freely determine their political status and
freely pursue their economic, social and cultural development.5

The Basic Law incorporates the civil liberties outlined in the Joint Declaration and
specifies, in Article 39, that the International Covenants shall apply in Hong Kong.6 The
promulgation of the Basic Law took place shortly after the Tiananmen Square massacre.
In its attempts to calm anxieties, the Hong Kong government promised to introduce a
Bill of Rights which would have the effect of implementing the covenants. Until 1991,
when the Bill of Rights was introduced, the British governments position had been that,
since the covenants applied to Britain, they also had force in Hong Kong. The Chinese
government was unhappy at the introduction of the Bill of Rights which, it claimed,
detracted from the pre-eminence of the Basic Law and which might conflict with some
of its provisions.7 The debate rumbled on through the 1990s with various threats to make
the Bill of Rights inoperative after 1997. It was amended so that it did not apply to the
private sector,8 but the Chinese government was still unhappy. In February 1997, the
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Rights, Complaints and Redress 259
Standing Committee of the National Peoples Congress announced that three sections
of the Bill of Rights Ordinance would not be adopted as laws of the SAR after the
handover, measures to which the outgoing Hong Kong government objected.9

In the 1990s, a number of legislative measures were passed that were designed
to increase civil liberties. In 1992, the Societies Ordinance, which had been used by
successive colonial governments to control politically unacceptable organisations, was
amended to provide better protection for societies from arbitrary government action and
to bring it in line with the Basic Laws prohibition on ties between political organisations
or bodies in the SAR and foreign political organisations. In 1994, Patten, under some
pressure from the Legislative Council, announced proposals which were intended
to strengthen the rights of the individual and to eliminate discrimination.10 These
included the implementation of United Nations conventions on the rights of the child
and the elimination of all forms of discrimination against women, the establishment of
an Equal Opportunities Commission and new legislation to prevent discrimination, the
introduction of a Code of Access to Information, legislation to protect personal privacy,
and improved legal aid.11 In 1995, the Public Order Ordinance was amended to replace
the Commissioner of Polices power to license demonstrations and protests by a system
of notification which required the Commissioner, in banning a demonstration, to comply
with Article 21 of the International Covenant on Civil and Political Rights. In February
1997, the Standing Committee of the National Peoples Congress made it clear that the
major amendments to the Societies Ordinance and the Public Order Ordinance would
not be adopted as laws of the SAR after the handover. The future Chief Executives
Office then produced a consultation document aimed at avoiding a legal vacuum. The
document also provided amendments which were acceptable to the Chinese government
but to which the departing colonial government continued to object.12

While the measures introduced before 1997 were aimed particularly at assuring
the public that their rights would be protected after the retrocession, they were also an
important part of the Serving the Community programme, which was designed to enhance
the accountability of government and to make it more responsive to the public. One
dimension of that accountability was to keep the public informed of government policies
and services. This was to be achieved through the existing means of the policy address,
now to be accompanied by more explicit policy commitments, departmental reports,
departmental handbooks, performance pledges, briefings, press releases and interviews.13
A more informed public, it was expected, would lead to an increase in public support,
greater understanding of the Governments policies and a greater awareness of public
service issues.14

To what extent have these attempts to strengthen civil liberties and to increase
openness, transparency and accountability survived the transition? In the following
sections, we consider three areas in which reforms were introduced and the extent
to which they have been supported by government since the retrocession: the Code
on Access to Information; the role of the Privacy Commissioner; and the Equal
Opportunities Commission.
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The Code on Access to Information

The Code on Access to Information was introduced in March 1995. The post-1997
government continues to recognise the value of public access to information in promoting
understanding of policies and decisions, accountability for decisions and actions,
awareness of public services, participation in public service issues, and in engendering
confidence in the administration.15 As part of the Code, it promises that departments
will publish details of their organisation, information on the services they provide, their
performance pledges and the extent to which they have been met, a list of their records
and a list of information either published or otherwise made available. 16 Responses
to requests for information are to be given as quickly as possible, ideally within ten
days. However, the government has reserved many areas in which it is not required to
disclose information. These include: defence and security, external affairs, nationality,
immigration and consular matters, the management of the public service, internal
discussion and advice, public employment, information which could lead to improper
gain, incomplete research, analysis or statistics, third party information (unless the third
partys consent has been obtained) and the privacy of the individual.17 In addition, the
Code is not legally enforceable.

The Code on Access to Information was intended to make government more open
by providing citizens with greater and more specific information on administrative
issues. In 1999, the Journalists Association put the Code to the test. It requested 81
documents from various departments, most of which were not thought to be particularly
sensitive. Of the 81 documents, 35% were available in full, 9% were withheld in part,
25% were withheld in full, citing reasons under the code, and 32% were not available
for other reasons. The Association considered some of the documents withheld to have
been non-controversial. A survey of 90 of its members reported that 69% thought that
the government was less open than before the handover. The Association subsequently
launched a campaign for more open government.18 In 2007/2008, there were fifteen
complaints to the Ombudsman about the way in which the Code operated. She has been
highly critical of the governments attitude towards the provision of information, noting
that in several cases departments had refused requests for information either without
reason or for reasons not specified in the Code. She also said that Access to Information
officers at the departmental level were sometimes not aware of the provisions of the
Code.19

The government claims that the vast majority of requests are met. Between March
1995 and June 2008, it received 25,068 requests for information of which 21,939 were
met in full, 503 were met in part, 514 were refused and 1,911 were withdrawn.20 Bureaus
and departments said that they did not hold information on 869 requests and 52 were
still being processed.21 Many requests for information probably are routine and can be
divulged without transgressing the categories of reserved information. Nonetheless, there
is still a belief among many journalists and academics that the governments attitude
towards releasing information is to withhold it rather than to make it available.
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The Privacy Commissioner

The Personal Data (Privacy) Ordinance was introduced in December 1996 to protect
the rights of individuals providing data to government. The legislation, which created the
office of Privacy Commissioner to enforce its provisions, was based on six principles:
establishing the purpose and manner of collection of personal data; ensuring that personal
data kept by the government should be accurate, up-to-date and kept no longer than
necessary; that personal data should be used for the purposes for which it was collected;
that it should be kept securely; that information held should be available to the data
subjects; and that data subjects should have the right to correct the personal data held
on them.22 In common with the Code on Access to Information, there were exemptions
within the legislation which protected the governments right to limit the application of
the Ordinance where it might prejudice security, defence and international relations, the
prevention, detection, assessment or collection of any tax or duty, news activities, and
health.23 The government clearly provided itself with sufficient loopholes to override
the rights of individuals to privacy of personal data if it felt the need to do so. The
legislation was primarily symbolic designed to allay fears that sensitive information on
individuals might be passed on to the Chinese government.

Complaints about violations of the privacy of data have risen from 52 in 1996/1997
to 1067 in 2006/2007, of which 125 were complaints against government and other public
sector organisations.24 In 2008, there was a series of leaks of government information
from the police, immigration, health authorities and the Civil Service Bureau, mainly
stemming from the loss of USB storage devices or from inadvertent loading of the
material on to the internet. It was revealed that the records of 46,000 people had been
leaked by government and other public sector bodies over the previous three years but
that only a few of the 30 incidents had been reported to the Privacy Commissioner.25
The revelations damaged the public image of the government and it has since taken
measures to ensure that USBs are encrypted and that there are appropriate monitoring
systems for the use of portable storage devices.26 But it has yet to enact proposals from
the Privacy Commissioner to amend the Ordinance which he has suggested is outdated
and needs to include penalties against those who obtain or disseminate private data for
personal gain.27
The Equal Opportunities Commission (EOC)

In May 1996, the government established an Equal Opportunities Commission to
administer two ordinances, the Sex Discrimination Ordinance and the Disability
Discrimination Ordinance. The Ordinances make it unlawful to discriminate on the
grounds of sex, marital status, pregnancy and disability, to harass or vilify anyone
because of their sex or disability, and to help promote equality between men and women
and between persons with disabilities and without disabilities. The Commission also
administers the Family Status Discrimination Ordinance, which was passed into law
in November 1997 and which makes it illegal to discriminate against anyone who has
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responsibility for the care of an immediate family member, and the Race Discrimination
Ordinance which was passed in 2008. Much of the work of the Commission has been
concerned with complaints of alleged violations of the Codes of Practice on Employment
issued under the Ordinances. If settlement cannot be reached, a complainant has the right
to apply for legal assistance and to bring proceedings before the District Court.

In 2001, the EOC received numerous complaints about the Secondary School
Places Allocation System (SSPA) and sought a judicial review of the governments
practices.28 In June 2001, the court ruled that the system was sex discriminatory and
unlawful.29 The Commissions work on the SSPA30 and in other court cases where the
government actively resisted the Commissions attempts to enforce the laws gave the
EOC a positive public image.31 However, in 2003, the government did not renew the
term of its chair, Anna Wu, who had been instrumental in ensuring that the Commission
fought hard to make all organisations, including the government, comply with the laws
against discrimination.32

The new chair, a former judge, Michael Wong Kin-chow, had previously been
head of the Administrative Appeals Board. One of his first administrative acts was to
rescind the appointment of a senior official, Patrick Yu Chung-yin, who had received
an offer of employment while Anna Wu held the chair but who had not yet taken up his
position.33 Wongs decision, which was apparently triggered by an interview which Yu
gave to the South China Morning Post, caused a storm of protest. A coalition of thirteen
pressure groups called on the ombudsman to investigate his action and the Chair of the
Society for Community Organisation called for his dismissal.34 The matter was further
complicated when it was alleged that Wong had received gifts of airline tickets from a
property developer while still a member of the judiciary, that he was living in a house
that the developer was alleged to have given to his daughter, and that he had received
special permission from the Chief Executive to receive his pension as a judge and his
salary as chair while he held the position.35 The Legislative Councils Panel on Home
Affairs decided that it wanted to interview Wong over the dismissal of Yu. On the day
before the meeting, however, Wong resigned.

The government, under pressure from the Legislative Council, set up an Independent
Panel of Inquiry into the incidents surrounding the termination of Yus appointment,
Wongs resignation, and Anna Wus allegations that she had been subject to a smear
campaign by the government and several members of the EOC.36 The Panel subsequently
concluded that Yu had been properly appointed and terminated (but with some technical
lapses) and that there was no truth in the allegation published in a local magazine that
government officials and EOC members had been involved in drafting an allegedly
defamatory statement against Anna Wu at a private meeting the night before Wong
resigned.37 The Secretary for Home Affairs, who was at that meeting although not
apparently for its entirety, claimed that no one was smeared.38

After 2003, the EOC became rather less active and fewer cases went to court. Wong
had been quoted as saying that he intended to downsize the EOC39 and, had he stayed
in office, it seems likely that there would have been much less of the crusading spirit that
Anna Wu had displayed. As it was, public confidence in the EOC seemed to drop after
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the controversies. Complaints fell from 1032 in 2003 to 595 in 2004, gradually rising
again to over 800 in 2008.40 The government appeared to want a quieter life. The Home
Affairs Bureau picked up on a recommendation of the Panel of Inquiry to separate the
position of Chair from that of the Chief Executive Officer.41 Although the action was
rationalised as being in line with other non-departmental public bodies, it could also
have been interpreted as checking the power of the head of the EOC. The passage of
the Race Discrimination Ordinance in 2008 also suggested that the government had no
wish to find itself in future in court pitted against one of its own statutory bodies. The
government is bound by the Ordinance but only in terms of its general application. Any
officer carrying out a statutory duty under another ordinance is not obliged to abide by
its provisions. In addition, immigration law and policy, which is an important area in
which racial discrimination might occur, are also excluded.42 The EOCs role is in effect
restricted to ensuring that the private sector adheres to the employment provisions in
the Ordinance.

The Code on Access to Information, the Office of the Privacy Commissioner and
the EOC have evolved in rather different ways. The Code has become part of civil
service practice but its provisions are not strong enough to require the government to
release information which it does not wish to release. The protection of data is required
by law but its provisions are not sufficiently punitive, in the view of the Commissioner,
to deal with changing circumstances. The EOC experience raises quite separate issues,
calling into question the extent to which the government is committed to the protection
of civil liberties. In the protests against the national security legislation in 2003, the
government was painted into a corner where it was seen to be attacking civil liberties.
The perception that it is at best a lukewarm supporter of civil liberties has not been
aided by its apparent efforts to reduce the impact of the EOC or by the views of some of
the governments more influential supporters that the Bill of Rights is a colonial device
and that the Chinese government never intended the international covenants to apply to
domestic law.43 The passage of the Race Discrimination Ordinance did nothing to help
the governments image. The Chair of the Legislative Councils Bills Committee, among
many critics, said she was deeply ashamed of a government that had blatantly failed
to meet its basic United Nations obligations in the Ordinance.44 In the final analysis, the
governments own pre-dispositions, and those of the Chinese government, may prevent
it from adopting a proactive position on civil liberties. Yet, if does not do so, there will
always be questions about its commitment to the protection of citizens rights. Civil
liberties remain a key area of public concern in post-1997 Hong Kong and any attempt
to tamper with them arouses fierce opposition.
Complaints
In the introduction to this chapter, we drew a distinction between complaints, which have
a broad effect in policy or systemic terms, and individual grievances for which redress
might be sought. In this section, we analyse the work of two institutions whose role in
handling individual complaints is less significant than their contributions to the correction
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of policy problems and to the maintenance of systemic values. The Legislative Council,
like most legislatures, has taken on the role of redressing individual grievances. But that
role has become increasingly less important as other complaint-handling institutions have
been created and as legislators themselves have sought to identify critical policy issues
which could arise from individual complaints but which are probably more likely to be
expressed in the form of group representations. The ICAC, similarly, has a systemic
role. If citizens have the assurance that corruption can be controlled and if core values
are seen to be supported, then the legitimacy deficit can be reduced.
The Legislative Council Redress System

In 1970, the colonial administration rejected the idea of an ombudsman in favour of
strengthening the representative function of Legislative Councillors.45 The changes were
minimal and Legislative Councillors continued to play only a limited role in redressing
grievances. In 1980, for example, it was estimated that some 90% of representations
from the public could be handled by civil servants without troubling the Councillors
which meant that most complaints could be neatly contained within the bureaucratic
system. Under the Office of Members of the Executive and Legislative Council
(OMELCO) system, Legislative Councillors (but, in practice, the civil servants manning
the OMELCO office) had three rights: the right to information, including government
files and correspondence, policies procedures and instructions; the right of access to
senior government officials; and the right to challenge the actions of public agencies.46
The OMELCO office did not exercise these rights very frequently. Most matters were
resolved informally between the complaints officer in OMELCO, the department
concerned and the complainant. OMELCO was eventually organised into a complaints
division and a members division, which handled interest group representation.47 This
downgraded the importance of complaints, partly because unelected members, who
had no need to canvass for votes, were more concerned with pressure groups than with
individual complaints and partly because more senior civil servants were seconded to
the members division.

OMELCO became increasingly less relevant to the complaint-handling process
in the 1990s when there were many other avenues through which complainants could
air their grievances. A Consumer Council had been established in 1974 and regularly
received more complaints than the Legislative Council complaints division.48 The ICAC,
which also came into operation in 1974, was soon well respected for its role in combating
corruption and received many complaints that had nothing to do with graft. The Urban
Council and the District Boards, when they were set up in 1981, provided other channels
for redress for aggrieved members of the public. Finally, in 1989, after many years of
consideration and consultation, the government did set up a weak ombudsman system,
the Commissioner for Administrative Complaints. The OMELCO system, originally
the only outlet for complaints against the government, had simply become one among
a number of different channels for redress.
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With the introduction of directly elected members to the Legislative Council in
1991, some re-organisation of the system was required. A Legislative Council Secretariat
was created in 1994 which retained a complaint-handling function. In the same year,
however, the government introduced amendments to the Commissioner for Administrative
Complaints Ordinance which enabled complainants to take their grievances directly to the
Commissioner, instead of having the complaint referred by a member of the Legislative
Council. The amendment increased by seven-fold the number of complaints received by
the Commissioner and correspondingly reduced the importance of complaint-handling
within the Council Secretariat. In addition, the emphasis on responsiveness after Patten
became Governor meant that a good deal of thought went into handling issues likely to
cause grievances. The focus on service to the public, performance pledges and training
programmes to improve levels of courtesy and efficiency may have helped to reduce the
number of complaints. The development of departmental complaint-handling mechanisms
also meant that many grievances could be resolved without recourse to the Legislative
Council.

The reforms to the ombudsman system, in particular, caused Councillors to re-think
their collective role. Their view was that the primary target of the redress system should
be towards representations that raise wide policy issues and matters of public concern
49 However, the Legislative Council could not entirely escape its complaint-handling
role because it was required, under Section 73(8) of the Basic Law, to receive and
handle complaints from Hong Kong residents. In July 1998, it extended its jurisdiction
to include non-government bodies and established referral procedures which, with the
consent of the client, meant that some complaints were passed on to other complainthandling institutions.50

Table 11.1 shows the number of representations and individual complaints
handled by the Legislative Council over the period 19932008. Individual complaints
have been gradually declining; the public is well aware that there are other avenues for
redress. In a comprehensive survey conducted by the Census and Statistics Department
in 2008, the Legislative Council did not even feature as a preferred channel of complaint.
Most respondents preferred to take their complaints directly to the department or public
body concerned (35.5%), to the District Council (30.5%), to the Ombudsman (15.5%)
or to the media (13.9%).51 There is little incentive for Legislative Councillors to devote
time to individual complaints for the system does not reward them with the votes of
grateful constituents. Members work in groups of six and take turns to be on duty each
week although the same group of members usually handle complaints on the same
issue.52 If members do have a representative function on behalf of their constituents,
it is performed through their own offices rather than through the Legislative Council
redress system.

A further constraint on the Legislative Council system is that its method of
classifying and reporting complaints does not directly address the problem of
maladministration. Since 2003, the disposition of complaints has been included with
group representations so that it is not possible to determine what decisions have been
taken on individual complaints. Complaints, whether from groups or individuals, are
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Table 11.1 Complaints and Representations to the Legislative Council, 19972007
Year
19971998
19981999
19992000
20002001
20012002
20022003
20032004
20042005
20052006
20062007
Group representations
163
315
170
194
169
176
175
171
175
194
Individual complaints
798
1,264
963
942
626
993
861
841
712
752
Source: Legislative Council, Annual Reports 19972007 (Hong Kong: various publishers
19972007, www.legco.gov.hk); Provisional Legislative Council, Provisional Legislative Council
Annual Report 19971998 (Hong Kong: Horizon Creative Ltd, 1998).
Note: The reporting period for 19971998 was from 1 July 1997 to 30 June 1998. The reporting
period for 19981999 was from 1 July 1998 to 30 September 1999.
described as resolved, rather than substantiated or unsubstantiated, which means that

they may represent a bureaucratic mistake or that the department is simply explaining
to the complainant why they took the decision. No further breakdown of the cases is
provided. Resolved cases and the large numbers of referrals and of information given
cases suggest that the Legislative Councillors are not primarily focused on ensuring that
complaints are rectified and prevented from re-occurring but rather that they seek an
appropriate solution for the specific cases brought before them. Some publicity is given
to important cases with policy implications but the ombudsmans aim of improving the
quality of the public service through the complaint-handling process does not appear to
be a major objective of the Legislative Council system.

Complaints, whether brought by individuals or deputations, do provide a barometer
of the issues troubling the public. Housing, and particularly the management of the
public housing estates, has been a perennial source of complaints, deputations and
requests for assistance. Health and social welfare complaints also feature regularly. In
any given year, specific government measures may result in a spate of complaints. In
2002/2003, for example, immigration and right of abode matters generated by far the
largest number of complaints.53 In 20062007, in the light of food poisoning scares,
the Health, Welfare and Food Bureau was the subject of the most complaints and also
of the most proposals for change by group representatives.54

Legislative Councillors have been able to make some improvements to policy
through the redress system. In one case, for example, members received a deputation
over the poor construction of housing estates and misrepresentation of facts in the sales
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brochure and were able both to ask the Hong Kong Housing Society to rectify the defects
and to persuade the government to introduce legislation on the regulation of the content
of sales brochures.55 In another instance, after complaints from residents that the Urban
Renewal Authority had taken ten years to re-develop their street, members of the Council
met with the Authority to discuss how the work could be completed more expeditiously
while retaining the vibrancy of the street.56 Immigration cases have also occupied much
of Councillors time. As a consequence of the Court of Final Appeals decision on the
right of abode, the government issued an edict denying school places to affected children.
Their families and various pressure groups protested and the Catholic Church, one of
the largest providers of private education, refused to implement the measure. Legislative
Councillors indicated their own disquiet with the governments stance. They pointed out
that schooling and right of abode were different issues and questioned the legal basis
of the decision. The government undertook to review each of the 187 cases and some
of the children were subsequently admitted to schools.57

The role of the Legislative Council in handling these issues relates more to policy
demands from the society than it does to redressing individual grievances. In a political
system where pressure groups often express their reactions to government policy on
the streets, the Legislative Council plays a valuable role as a mediator between the
society and the government. It may not always be able to persuade the government to
take action or to change its position but it does provide a forum for the expression of
views and some publicity for those who bring their cases to the Council. Despite these
strengths, it is not the most appropriate channel for relatively minor complaints against
government decisions. For that reason, Councillors view their complaint-handling role as
supplementary to the ombudsman, the Complaints Against the Police Office (CAPO) and
other departmental complaint-handling units rather than as the focal point for grievances
concerned with maladministration.
The Independent Commission Against Corruption (ICAC)

Corruption is a form of maladministration that may adversely affect the performance of
a public service. In the 1960s and early 1970s, syndicated police corruption and corrupt
practices in other departments seriously tarnished the reputation of the government and
contributed to the legitimacy deficit. When the ICAC was created in 1974, it assumed
the mantle of a crusader for clean government and public sector morality. Despite some
setbacks in its efforts to win public confidence, especially immediately after November
1977 when there was a short-lived amnesty for police officers suspected of corruption
offences, it has been able to retain this image. The measure of its success has been the
widely-held belief that its work is essential to sustain integrity in government and that
if corruption is discovered it will be fully investigated and the wrongdoers punished.
The ICAC has been able to maintain qualities which serve to enhance the support for all
institutions concerned with civil liberties, complaints and redress: integrity, independence
from government and the willingness and ability to investigate complaints without fear
or favour.
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Although it has always prosecuted more offenders in the private sector than in the
public sector, the ICACs focus has been fixed on detecting and eliminating corruption
in government. In 2007, of the 3600 reports it received alleging corruption (excluding
election and non-corruption reports), 975 concerned the public service of which 318
were about alleged police corruption.58 A further 249 complaints related to other public
bodies. Complaints about corruption in the public service and the number of those
prosecuted for corruption have been falling for some years; in 2007, 25 public servants
were prosecuted, half the number prosecuted in 2003 and less than a quarter of those
prosecuted in the late 1970s and early 1980s.59 In 2007, the Commission also referred
123 civil servants to the Civil Service Bureau for consideration for disciplinary action.60
Complaints about non-government public organisations rose as more of those bodies
were created, but have begun to drop again recently. Not all reports are sufficiently
specific to be investigated but the ICAC is obliged to make preliminary enquiries even
into complaints that are lodged anonymously.

The Operations Department, which had 856 staff in 2007,61 is by far the largest
of the ICAC departments and is responsible for investigating corruption complaints.
It has the power of arrest without warrant and may also enter and search premises
with the permission of the court. An increasingly important function of the ICAC is to
ensure that elections are corruption-free. Candidates are briefed on the legal restrictions
on campaign activities and elections are closely monitored. In 2007, the Commission
received 913 election complaints of which 171 were allegations of bribery while the
remainder related to other corrupt or illegal activities such as providing gifts for voters
or publishing false information about candidates.62

The ICACs work in ensuring fair elections gives some indication of its importance
to the system as a guardian of moral values. This role extends far beyond investigating
corruption cases and prosecuting those suspected of offences. The ICACs Corruption
Prevention Department, for example, which in 2007 had 55 staff, is responsible for
advising on how procedures within government can be improved to reduce opportunities
for corruption.63 In 2007, it carried out 92 studies in the public sector in areas which
ranged widely from food safety, to land control, medical outside practice at the University
of Hong Kong, the management and investigation of bankruptcy cases and procedures
for the development of the new cruise terminal.64 The aim is to correct potential faults
in the system and, with new legislation, policies and procedures, to build in corruption
safeguards as early as possible.65

The work of the third arm of the ICAC, the Community Relations Department,
further extends its systemic role to include public education about the detrimental effects
of corruption. The ICAC conducts extensive publicity campaigns on television and
on the mobile broadcast network of the franchised buses and seeks to get its message
across in a variety of different formats from short stories and interviews to a website
for teenagers. The Community Relations Department had a staff of 169 in 2007 and
was divided into two divisions (one for liaison with mainland counterparts, the other for
local publicity) and seven regional offices which served the function both of receiving
complaints and of meeting with local groups and schools.66 Youth receive particular
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attention with some 80,000 secondary and tertiary students attending talks or taking
part in activities in 2007.67 At the community-wide level, the Community Relations
Department also makes attempts to contact business people and civil servants and has
set up the Hong Kong Ethics Development Centre to work with the major chambers of
commerce. The results of these efforts appear to have been very positive.68

Because of its status in the community, the ICAC also receives a considerable
number of non-corruption complaints. In 2007, for example, the ICAC referred 646
reports of a non-corruption nature (approximately 18% of all reports) to other government
departments.69 Of these, 28 were non-corruption complaints about police officers and
were referred to the Complaints Against Police Office (CAPO).70 The ICAC monitors
the progress made in investigating those complaints but does not play any further part in
the process. Surveys have revealed that many complainants are perfectly well aware that
the ICAC is only responsible for investigating corruption complaints and that it does not
have a role in handling other complaints. But there is a widely-held perception that the
ICAC is an unofficial court of appeal and that its officers have high integrity.71 This sets
the ICAC apart from other complaint-handling bodies; it has become institutionalised
while others are still striving to attain the public image of probity and impartiality which
the ICAC has enjoyed for some years.

The ICAC undertakes an annual random survey of 1500 people which assesses its
performance in the eyes of the public. The surveys show high levels of public confidence
in its work. In 2007, 98.5% of respondents believed that the ICAC deserved their
support,72 over 70% were willing to report corruption, and 90% said they believed that
their reports would be kept confidential.73 Some 77% claimed that they had seen ICAC
publicity, mainly on television.74 There were very different perceptions of the extent of
corruption in the public sector compared with the private sector. Some 76% thought
that corruption was uncommon in government departments but 47% thought that it was
common in business.75 Some respondents expressed doubts about the accountability
of the ICAC and 27% felt that external supervision over it should be increased.76 The
surveys suggest nonetheless that the community accepts the ICACs extensive powers
of arrest and detention as the price it has to pay for clean government.77

Since 1997, both the Legislative Council and the ICAC have continued to make
important contributions to the smooth running of the system. Yet although Legislative
Council members have influenced decisions on policy through the redress system, there
is very little its members can do if the government decides that it will not take action on
a particular issue. Even bringing the matter to the attention of the Legislative Council
as a whole may be quite difficult since the government has its own agenda and there
may be many other matters that members may wish to raise. Pressure groups, in any
event, are unlikely to let their concerns rest with Legislative Councillors alone; they
normally take other forms of action which means that the issues cannot be contained
within the political system. The role of the Legislative Council redress system is to serve
as an ameliorating, mediating body. It may help on some issues but it is unlikely to be
able to resolve fundamental differences between the community and the government.
By contrast, the ICAC, as a defender of public morality and the core value of clean
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government, is critical to the maintenance of the system. Without it, faith in government
would decline further and there would be fear of rampant corruption in the public
service.
Redress
An effective redress system which deals impartially with individual complaints about
unfair, arbitrary or illegal government decisions and recommends remedies and
improvements in procedures can be a useful means of reducing a legitimacy deficit.
Redress institutions can provide avenues for appeal and for obtaining explanations of
official action, which, in non-democratic systems, may be one of the few ways in which
citizens can object to unacceptable behaviour by public officials. In Hong Kong, the
redress institutions the ombudsman, the Complaints Against Police Office (CAPO) and
the Independent Police Complaints Tribunal, the departmental complaint-handling bodies,
administrative tribunals and the Administrative Appeals Board have developed from
colonial administrative practices where considerable attention was paid to presenting the
government in a good light and to controlling the redress system accordingly. Political
pressure has led to the development of some redress systems which have gradually won
more respect from the public for their impartiality. But there remain areas, particularly
the handling of complaints against the police and the procedures of some administrative
tribunals, which are controversial and where there are divergent views about the best
way forward. There are also perennial issues about how redress institutions will be
staffed and the degree to which their financial dependence on government affects their
autonomy and their willingness to press for justice.

Prior to the riots of 1996 and 1967, there was very little by way of a redress
system. The colonial administration took the view that the rule of law and an impartial
court system should be sufficient to resolve any disputes that citizens might have with
their government. This conveniently ignored the practicalities of cost and the fact that
courts consider the legality of a decision rather than whether it is fair or reasonable.
Applications for the judicial review of administrative decisions suffer from other
problems. Unlike normal court proceedings, judicial review focuses on the fairness of
the process, whether a decision-making authority has exceeded its powers, committed
an error of law, committed a breach of the rules of natural justice, reached a decision
which no reasonable tribunal could have reached or abused its powers.78 The courts do
not decide on the merits of the decision and they may not accept applications for judicial
review if there is another avenue of appeal available. The nature of the complaints that
people have against their government, important as they are to the individual, are often
not matters of sufficient significance for the courts and may be better resolved through
other institutions which have procedures for conciliation or investigation into the causes
of the grievance.
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The Ombudsman
The rule of law and the Legislative Council redress system were never going to be
sufficient to satisfy the mounting political pressure for independent channels of redress.79
The colonial government was anxious to reduce friction between the administration and
the public in what were expected to be tension-filled years in the transition to Chinese
sovereignty. And so, in the mid-1980s, the proposal to create an Ombudsman, which the
Governor and the Colonial Secretary had killed fifteen years earlier, was re-visited. The
government was still ambivalent about creating an institution which had the potential
to uncover inequities and embarrass its senior officials. The consultative document on
the redress of grievances, released in August 1986, reflected its caution.80 After a selfcongratulatory review of the work of the existing complaint-handling institutions and the
possibility that no changes were required, the government suggested that an ombudsman
system or a Commissioner for Administration might be considered.

The Commission for Administrative Complaints was established on 1 March 1989.
From the outset, it suffered from the problems that had afflicted the British Parliamentary
Commissioner system, on which it was based, that complaints had to be referred to the
Commissioner by a member of the Legislative Council. Relatively few complaints were
actually referred: only 71 in 1989, 167 in 1990, 197 in 1991 and 150 in 1992.81 Even those
complaints which were substantiated tended to be concerned with small administrative
mistakes although there were exceptions. In 1991/1992, seven of 16 complaints about
the Hospital Services Department were found to be substantiated. At least one set of
complaints were potentially life-threatening, involving a group of kidney patients who
alleged unfair treatment in the selection of patients for renal transplant operations.82 But
such cases were rare and received little publicity. The Commissioner, a former judge,
usually kept a low profile although, in 1992, when the Legislative Council reviewed the
system, he did make recommendations for change.83

Not all of the Commissioners recommendations were adopted,84 but the Governor
soon announced that the powers of the office would be enhanced.85 The reforms
resulted in a much more effective system. Complaints could now be made directly to
the Commissioner; publicity for individual cases was permitted; statutory bodies, such
as the MTRC and the Kowloon-Canton Railway Corporation, were included in the
Commissioners jurisdiction; and the Commissioner was given the power, despite strong
and public opposition from the Chief Secretary, the head of the civil service, to initiate
direct investigations of complaints that had wide public significance.86 The powers of
the Commissioner now more closely resembled those of an ombudsman than the British
Parliamentary Commissioner and, in December 1996, it was renamed the Office of the
Ombudsman.

Although the ombudsman has the legal authority to take cases directly, to publicise
findings and to launch independent investigations, these are necessary, but not sufficient,
conditions for effective performance. Much depends on how the role of the office is
interpreted and how its performance is judged by the public and the departments against
which complaints are lodged. How does the ombudsman see that role? In her 2007/2008
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annual report, the Ombudsman said that her office investigates actions by Government
departments and public bodies for administrative deficiencies and recommends remedial
measures [and] fosters good public administration that is fair, open, accountable and
responsive.87 A previous Ombudsman described the functions of the office as including:
redressing individual grievances against maladministration in the public sector;
making bureaucracy more human; lessening the gap between the government and the
public; preventing abuses by acting as a bureaucratic watchdog; righting individual
wrongs; indicating the facts when public servants are unjustly accused; and facilitating
administrative reforms in the public sector.88 Two years later, protecting human rights
was added to this list.89

To fulfil these functions, the office must be seen to possess certain qualities which
place its integrity beyond doubt. At stake are: whether the ombudsman is thorough in
the investigation of the complaint and reaches decisions that are fair to all the parties
concerned; evidence that the public sees the office as an appropriate place to take
complaints and that the office itself provides for suitable and procedurally sound avenues
for redress; attention to the public interest and values, such as administrative fairness, to
which the office might contribute; and the autonomy of the office itself from government
interference, either directly or indirectly, in the way which the ombudsman carries out
her work.90 We consider each of the features in turn.

Impartiality is an essential quality for effective performance. Without it, the public
will quickly come to realise that there is little point in seeking redress through the
institution and will look elsewhere to resolve their grievances. For that reason, selecting
an ombudsman who has had a career in a profession that demands probity has usually
been regarded as an important way of re-assuring the public that the office will be fair
and above board. The power to appoint the ombudsman lies with the Chief Executive91
and the responsibility for ensuring that the impartiality of the office is beyond question
begins with the government. It has been argued, somewhat curiously, that the executives
appointment of the ombudsman in Hong Kong removes it from partisan politics, as
though the executive itself could not possibly be partisan or political in such matters.92
A government is often a judge in its own cause and it is complaints against arbitrary
executive action that the ombudsman is investigating. Legislative Councillors have in
fact been the strongest proponents of the independence and impartiality of the office.
In May 2003, for example, Cyd Ho introduced a motion in the Council calling for the
independence of statutory bodies with complaint-handling duties and expressing concern
about the governments appointment policy.93 There is a good case for the Legislative
Council to be involved at some stage in nominations for the office or in approving the
executives nomination.

The first Commissioner for Administrative Complaints, Arthur Garcia, was a former
judge while the second, Andrew So, had been a school-teacher. In neither case was there
any question about their impartiality. The appointment of the third ombudsman, Alice
Tai, in April 1999, did arouse controversy.94 She had been a senior civil servant for many
years and there was speculation that her appointment had been a consequence of the
administrations belief that the previous ombudsman, whose term was not renewed, had
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been too outspoken and critical. There is no reason to suppose a former civil servant
may not act independently and impartially as an ombudsman but there is the possibility
that the public might see such an appointment as a civil servant investigating other
civil servants. Legislative Councillors had pointed to the undesirability of appointing
former civil servants to the Commissioner of Administrative Complaints Office as early
as the debate on the creation of the office.95

Jurisdiction and autonomy from government are also critical features in assessing
the performance of the office. The ombudsmans jurisdiction presently covers 80
organisations including government departments and statutory bodies and all the registries
and administrative offices of courts and tribunals for which the Judiciary Administrator
has responsibility.96 Exclusions from the jurisdiction include the police, matters affecting
security, defence and international relations, court proceedings, civil service personnel
matters, any action taken personally by the Chief Executive, honours and awards,
contracts (excluding procedures affecting tenders), investigation of crimes, any action
taken in relation to the code on takeovers and mergers and decisions concerning the
imposition or variation of any condition of granting, extending or renewing any interest
in Government land.97

The government has made a public commitment to maintain the independence of
the office.98 It has supported amendments to the Ordinance which allowed the Office
to conduct its own financial and administrative matters and enabled the ombudsman
to determine the conditions of service of office staff separately from those of the civil
service. In 2007/2008, the Office had 98 regular staff on salaries slightly below equivalent
ranks in the civil service.99 What the government did not support was an amendment to
the Ordinance which would have restricted the reappointment of the Ombudsman to one
further period of five years.100 Although a majority of Legislative Councillors voted for
the amendment, it needed the support of a majority of both functional constituency and
directly elected members and that condition was not met. The term of the ombudsman
remains indefinite at the pleasure of the government.

The extent of the ombudsmans autonomy from government and a more extensive
jurisdiction would mean very little if they were not accompanied by significant powers
to investigate complaints. Under the Ombudsman Ordinance, the ombudsman may
investigate a complaint if it is made by the aggrieved individual provided that the
complaint is lodged within 24 months of the event and that it is not possible to appeal
or to seek a remedy through the Chief Executive, the Chief Executive in Council,
tribunals or the court system.101 There is an obligation to keep information relating to
the complainant confidential, which means that a case cannot be shared with another
complaint-handling institution unless the complainant agrees to have it transferred.102
In conducting an investigation, the ombudsman is required to inform the head of the
organisation against which a complaint has been lodged and may seek his comments.103
If the investigation proceeds further, the organisation may be required to provide any
information or documents the ombudsman needs and officials involved in the case may
be interviewed. These are substantial powers but they may only be required occasionally.
Many of the complaints are relatively minor and can be resolved quite easily.
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Table 11.2 shows the number of enquiries and complaints received and the number
of direct investigations undertaken by the ombudsman. Enquiries provide some indication
of public knowledge of the institution and have shown a steady rise. Ombudsman
offices often serve as a port of first call for citizens seeking guidance through the maze
of government departments and activities and it would appear that the Hong Kong
ombudsman is increasingly serving that function. Once the Legislative Council filter was
removed in 1994 and the number of complaints increased, there were also more cases
likely to be outside the ombudsmans jurisdiction. Even so, the number of complaints
fully investigated has dropped substantially in recent years. This is attributable in part to
ultra vires cases, to the introduction in 1996 of a referral system (the INCH programme)
whereby a complainant can be referred to another complaint-handling institution with
his or her approval, and to cases which could not be investigated because of restrictions
on the investigation or because the complaint was withdrawn (see Table 11.3).
Table 11.2 Complaints to the Ombudsman, 1994, 19972008
Year
Enquiries
Complaints

1993/1994
1997/1998
1998/1999
1999/2000
2000/2001
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
1,054
7,578
10,192
9,323
11,821
12,900
14,298
12,552
11,742
14,633
16,626
12,169
173
3,073
4,125
3,101
3,709
3,736
4,382
3,859
3,802
3,828
5,606
4,987
Percentage of
complaints concluded
74
84
81
85
81
83
85
80
88
86
85
78.3
Direct
investigations1
7
7
3
5
4
1
5
6
6
5
4
Source: Adapted from Commissioner for Administrative Complaints, Annual Report of the
Commissioner for Administrative Complaints 1993/1994 (Hong Kong: Government Printer, 1994);
Office of the Ombudsman, Annual Report of the Ombudsman, Hong Kong 1997/19982007/2008
(Hong Kong: Printing Department, 19972002, www.ombudsman.gov.hk).
Note: The ombudsman did not have the power to conduct direct investigations until 1994.

The most important reason for the decrease, however, is the way in which the
ombudsman treats complaints. Most complaints are of a relatively trivial nature: a letter
seemingly insulting a deceased relative, a kindergarten teacher falsely accused of being
an illegal hawker, a complaint that the KCRC had incorrectly claimed that a ticket was
invalid and so on. In 2007, over 71% of complaints fell into four categories: disparity
in treatment, unfairness and selective enforcement; error or wrong decision or advice;
failure to follow procedures or delay; and negligence or omission.104 Most of these
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complaints were dealt with under the category of rendering assistance or clarification
(see Table 11.3). The department may make changes or apologise to the complainant or
the preliminary investigation may find that the department acted correctly. Some cases,
however, do involve issues of principle, serious maladministration, gross injustice,
systemic flaws or procedural deficiencies.105 With such complaints, the ombudsman
may order a full investigation in which witnesses may be called or site visits may take
place. Implicitly, the ombudsman is drawing a distinction between those cases which can
be resolved by assistance or clarification and those which are of wider significance.
This distinction has important implications for the number of fully investigated cases,
which have dropped substantially (see Table 11.3), and for the number of substantiated
complaints which have also declined.
Table 11.3 Disposition of Concluded Complaints to the Ombudsman, 20032008

2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
203
1,631
284
7
328
1,892
4,345
209
1,664
125
6
1,071
1,948
5,023
185
1,573
55
12
1,371
1,113
4,309
143
1,500
71
2
1,239
2,385
5,340
81
1,857
38
1
1,421
1,246
4,644
Preliminary
Investigations
INCH
RAC
Full Investigation
Mediation
Not Pursued
Ultra Vires
Total
1,834
1,873
1,758
1,643
1938
Source: Adapted from Office of the Ombudsman, Annual Reports 20032008, www ombudsman.
gov.hk, Figure 3.4, Table 1.
Notes: 1. INCH is a referral programme to other complaint-handling institutions.

2. RAC is rendered assistance and clarification.

3. Not pursued includes cases that are withdrawn or discontinued.

4. Ultra vires includes cases that are beyond the ombudsmans jurisdiction or where
restrictions are placed on the investigation.

Under the second ombudsman, Andrew So, many complaints were found to be
substantiated; in 1995/1996, for example, 39% of all complaints investigated were
substantiated. Since his departure, there have been far fewer substantiated complaints. In
itself, this may be no more than a matter of classification. Many of the cases in which the
office of the ombudsman rendered assistance or clarification were no doubt substantiated
or partially substantiated; the ombudsman reported that government departments and
statutory bodies were required to take remedial action in 34.5% of cases.106 Of the 38
cases in which a full investigation was conducted, nine were found to be substantiated
and a further thirteen were partially substantiated.107 Substantiated complaints are not a
measure of the effectiveness of the office. But they do have symbolic importance. They
show the public that the ombudsman is willing to take on the bureaucracy on behalf of
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the citizen and point the finger, if necessary, to cases where civil servants or public sector
employees have been guilty of maladministration. Substantiated complaints, moreover,
send a message to civil servants that they will not be able to escape censure if they
behave in a manner which violates the legal, fair and proper treatment of citizens.

When the ombudsman finds a complaint substantiated or partially substantiated,
the government is expected to rectify the situation to ensure that it does not recur. Its
responses to the ombudsmans findings are brought together annually as a government
minute and tabled in the Legislative Council. Almost invariably, cases of justified
complaints are met with an apology, a correction of the error, and a promise to tighten
the regulations. The ombudsman can also recommend that compensation be paid in
cases where the complainant has been adversely affected by administrative negligence
or wrongful advice. In one case, for example, financial compensation was paid to a
prospective tenant who was not informed of the pending demolition of a housing block
in which she had entered into a tenancy agreement for a shop.108 Thus, although many
cases are relatively minor, they have the wider importance of improving government
procedures and of ensuring that similar problems do not arise again.

The present ombudsman has placed some emphasis on alternative dispute resolution,
that is, in referring a complaint to another, more appropriate complaint-handling body,
in rendering assistance or clarification without the need for a full investigation, or in
mediation where the parties to the dispute voluntarily come together and to seek to
resolve the problem.109 The number of complaints resolved by rendering assistance
or clarification has been steadily rising (see Table 11.3) but referrals, under the INCH
programme, have been dropping and mediation is never likely to involve more than a few
cases. In all cases, where a matter is resolved without a full investigation, the ombudsman
has to be satisfied that there is no evidence of maladministration and that the complaint
has been triggered by a public servants minor error or by the complainants failure
to understand government regulations or the reason for a decision. The ombudsmans
attempts to conciliate in such cases have become an increasingly significant part of the
institutions role.

Of the departments and public bodies about which the ombudsman receives the
largest numbers of complaints, the Housing Department normally ranks highest, some
24.7% of all complaints in 2007/2008.110 Other departments that attract a large number of
complaints are the Lands Department, the Food and Environmental Hygiene Department
some of whose activities, such as hawker control and inspection of commercial
premises to check on hygiene standards, have the potential to provoke friction the
Buildings Department, and the Immigration, Social Welfare and Transport Departments.
Complaints about departments or public bodies may be distorted by group complaints
or public annoyance about a specific matter. Prisoners, for example, at one time
preferred to resort to the ombudsman to complain about their treatment rather than use
the complaint-handling unit of the Correctional Services Department.111 In 2007, the
Television and Entertainment Licensing Authority ranked third on the most complained
about list, largely as a result of a single issue.112 In general, complaints received by the
ombudsman reflect areas in which there is greatest interaction between the government
and the public.
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The ombudsman has the power to initiate direct investigations into matters of
public concern in which there is alleged maladministration. There need not be a specific
complaint about the issue. The ombudsman may choose to examine administrative
practices where there is a suspicion that there may be systemic or widespread
deficiencies in the implementation of new or revised Government procedures or
repeated complaints about particular matters.113 The issue should be of sufficient
dimension and complexity, representing the general interest, desire or expectation of
the community, not an individual grievance, not normally subject to the jurisdiction of
a court or tribunal, and a matter of grave and immediate concern to the ombudsman.114
In 2007/2008, there were eight direct investigations completed or in progress into such
matters as improving mechanisms for handling conflicts of interest in organisations
subvented by the Leisure and Cultural Services Department, alleged overcharging of water
bills, and the effectiveness of the Integrated Call Centre in handling complaints.115

Because direct investigations focus on much larger issues than those normally
raised by individual grievances, the possibility of conflict with government over the
decision to conduct an investigation or over the ombudsmans recommendations is
greater. The government was originally unhappy about conceding the power of direct
investigation to the ombudsman and there have been occasional cases where it has
felt that an investigation was unnecessary. The Chief Secretary for Administration, for
example, thought that there was no need for the ombudsmans investigation into the
problems surrounding the opening of the airport, especially since there were two other
investigations under way. The ombudsman pointed out that the announcement of the
direct investigation preceded those of the Legislative Council and the administration
itself and that the investigation was focused on the question of whether there had
been maladministration.116 The results of direct investigations are reported at a media
conference which puts some pressure on the government to address the problem and
accept the recommendations.

The ombudsman has a mission to bring about improvement in the quality and
standard of public administration and to promote fairness in the way which government
departments treat citizens.117 The office has produced administrative ethics and
administrative fairness checklists which put questions to public servants about their
work practices, their sense of responsibility and accountability, their honesty and
integrity, their economy and environmental consciousness, and how they make decisions
and handle grievances.118 The administrative ethics checklist also included a code of
conduct.119 Efforts to regulate the ethical behaviour of civil servants are largely the
province of the ICAC and the Civil Service Bureau which is producing its own code
of behaviour but the ombudsman has a role to play because individual cases and direct
investigations can serve as examples of appropriate and inappropriate behaviour.

Because the principle remains in place that complaints should be resolved at the
lowest level possible and because the ombudsman refers complaints under the INCH
programme to departments, the office has an interest in how well departmental complainthandling units perform. In 1998, the office produced a guide to effective complainthandling which was probably intended for statutory bodies and the private sector as well
ch.11(p.257-288).indd 277
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as the government.120 It asserts that the effectiveness of complaint-handling institutions

depends on whether they help to resolve dissatisfaction of customers about the services
they have received or believe they should have received.121 A good complaint-handling
system should be easily accessible and conspicuous to customers; simple to invoke and
operate; efficient, offering speedy action and resolution within pre-determined time
limits; objective and free from undue influence or interference; and confidential so as
to protect the complainants privacy.122 How well does the ombudsman office itself live
up to these principles?

The Census and Statistics Department has conducted four comprehensive thematic
household surveys which seek to assess public awareness of the work of the ombudsman.
In 1997, in a survey of almost 10,000 households, the Department asked whether people
had heard of the office. Just over half of those surveyed knew about the office and its
functions. An even more comprehensive survey, which was published in late 2000, found
that nearly 65% of respondents had seen television advertising for the office and that
22% were aware that the ombudsman could conduct direct investigations on matters of
public concern.123 The 2003 and 2007 surveys showed similar results.124 There has been
some shift in public attitudes towards complaint-handling bodies over the decade. In
2000, District Council members were the preferred channel for lodging complaints. By
2007, departmental complaint-handling channels had become a more popular choice.125
Older people were still more inclined to go to District Council members but the younger
and more educated tended to favour departmental complaint-handling bodies or the
ombudsman.126 The popularity of the ombudsman as a preferred channel for making
a complaint has been rising. In 2003, 9.8% said they would take a complaint to the
ombudsman as their first port of call; by 2007, this had risen to 15.5%.127 The work of the
office is well appreciated with 75.2% of those who were aware of direct investigations
rating them very effective or effective and 69.1% believing that the ombudsman was
effective or very effective in exposing deficiencies in administration, a considerable
increase over the 2003 figures.128

Direct investigations have raised the public profile of the office. Its recommendations
have led to significant improvements in government practices and it has also served as
a model for other complaint-handling bodies in government departments and statutory
bodies. While these are positive achievements, if the office places its primary emphasis
on resolving the grievances of complainants without investigation rather than actively
seeking out maladministration, individuals may be satisfied with its efforts but something
of the wider value of the office will be lost. To some extent, this is compensated for
by the direct investigations and the depth of the fully investigated complaints which
contribute to improvements in public administration. At present, the office is functioning
well and has helped to raise confidence in an impartial and effective redress process.
Complaints against the Police

The Complaints Against Police Office (CAPO) was established in 1974 as part of the
Police Force. Over the ensuing years, there have been two perennial criticisms of its
ch.11(p.257-288).indd 278
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operations. The first is that the organisations which have monitored CAPOs work have
had inadequate powers and have been too dependent upon it for information. The second
criticism is that investigations lean too heavily towards giving policemen the benefit
of the doubt. Fundamental to both criticisms is the fact that CAPOs investigators are
police officers seconded from other parts of the Force and that, as a consequence, it has
been difficult to win public confidence.

The first attempt to monitor CAPO was in 1977 when it fell under the jurisdiction
of a panel of Legislative Council members (the OMELCO Police Group). In 1986,
as a result of a rise in the number of complaints and a working party report, the
monitoring organisation became known as the Police Complaints Committee and
ceased to be a Legislative Council panel. In 1993, the Legislative Councillor, James
To Kun-sun, proposed that the government should set up an independent body to
investigate complaints against the police. Following the debate in the Legislative
Council, the government decided to introduce changes to the Police Complaints
Committee. In 1994, it was renamed the Independent Police Complaints Council
(IPCC). Plans were then made to turn the IPCC into a statutory body, to empower it
to refer a case back to the Commissioner of Police for re-investigation, to monitor
CAPOs investigative actions and to require it to submit annual reports which would
be tabled in the Legislative Council.129

The legislation to bring these measures into effect reached the Legislative Council
in July 1996 and was then referred to the Bills Committee for further consideration.
The Committee met with the administration thirteen times in what turned out to be
a controversial debate over the powers of the IPCC. James To sought to increase its
remit by enabling it to investigate any complaint where it was not satisfied with the
results of a CAPO investigation and to determine the acceptability of the findings and
results of the investigation of all complaints.130 Both amendments were carried in the
Bills Committee but the proposed clause to empower the IPCC to investigate cases in
its own right seems finally to have led the administration to decide that the bill should
not proceed.131

When the bill was withdrawn in June 1997, the Chairman of the Bills Committee
called for its re-introduction as expeditiously as possible.132 The administration
subsequently made some changes to the functions of the IPCC including setting up
a special panel to monitor serious cases, preventing tipping-off an officer whose
behaviour was about to be investigated, undertaking more surveys of attitudes towards
the police complaints system, setting time limits on handling complaints and opening
part of IPCC meetings to the public.133 It also undertook to monitor every case that
CAPO investigated. But criticism continued. In September 1999, when the Legislative
Council was considering Hong Kongs report on the International Covenant on Civil
and Political Rights, some deputations noted that it did not address the concern that
investigation of complaints against the Police remained in the charge of the Police.134
The United Nations Human Rights Committee, commenting on the Hong Kong report,
voiced similar concerns, stating that the IPCC
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has not the power to ensure proper and effective investigation of

complaints against the police. The Committee remains concerned that
investigations of police misconduct are still in the hands of police themselves,
which undermines the credibility of these investigations.135
Another United Nations committee, the Committee against Torture, also favoured
strengthening the independence of the IPCC and recommended continued efforts to
ensure that it became a statutory body with increased competence.136

In the April 2000 budget debate, To moved that the item covering CAPO should
be deleted, the effect of which would have been to abolish the office which at the time
had an annual expenditure of $60 million and employed 180 staff.137 To argued that
CAPO was ineffective in handling complaints. He pointed to the death of a young man
in custody where the coroner had found the investigation into the reasons for the death
questionable but where no action could be taken. He also criticised the administrations
approach, noting the lengthy period which had expired without legislative reforms
since his first motion in 1993.138 In her response, the Secretary for Security pointed to
improvements that the administration had made to the system and quoted the chairman
of the IPCC to the effect that he doubted whether a fully independent body was really
necessary to monitor the work of CAPO.139

In March 2002, the Security Bureau produced a consultation paper which
incorporated some of the amendments passed at the committee stage in 1996 but
continued to reject the proposal that the IPCC should have the right to determine
whether the findings and results of the police were acceptable and to conduct its own
investigation if they were not.140 This, the Security Bureau said, might create two sets
of findings and results in respect of a complaint, and cause confusion.141 The Bureau
also thought that it would change the practice of seeking a consensus between the CAPO
findings and the IPCC determination. The proposed bill did widen the powers of the
IPCC although it also omitted some of the amendments passed at the committee stage
in 1996, notably the provision that two Legislative Councillors should be appointed
to the IPCC and that the Council should be empowered to refer cases to the (then)
Attorney-General and the ICAC.142

Neither the government nor its critics significantly changed their positions. The
government wanted to retain CAPO as an organisation staffed by police officers
because, it said, they were familiar with the work of the police.143 Critics called for an
independent CAPO and an IPCC with much stronger powers. The government made
some concessions to give the IPCC more authority, independence and resources and
appointed two Legislative Councillors as vice-chairmen of the Council but it did not
significantly strengthen the monitoring powers of the IPCC. The legislation was not
re-introduced until June 2007 when the draft bill provoked critical submissions from
human rights groups and from the Bar Association.144 The legislation was eventually
passed in July 2008 by 29 votes to 13 with democratic members voting against it.145
The IPCC became a statutory body with slightly increased powers.
ch.11(p.257-288).indd 280
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The second issue which has caused concern is the process of investigating
complaints. There have been repeated charges that the process is biased in favour of
police explanations of incidents. The long-held police view is that every officer is entitled
to be presumed innocent of crime or misconduct until the contrary is proven beyond
reasonable doubt. It follows that complaints are not necessarily without foundation but
that, in one-on-one situations when versions of events are irreconcilable, it is not always
possible to reach a definite conclusion.146 This concern with procedural justice continues
to pervade the entire investigative and classification process.

The process of dealing with complaints against the police has four stages: initial
categorisation; investigation; monitoring; and disposal and classification of complaints.147
When the complaint or report is received, it is classified according to the most serious
allegation made in the complaint. Table 11.4 shows this initial categorisation. Since many
complaints contain more than one allegation, the initial classifications are subsequently
re-considered by the IPCC and endorsed as allegations. In 2007, for example, there
were 2,569 complaints and 4,341 allegations.148 Table 11.5 shows the final categorisation
by allegation. There has been a marked improvement in relations between the police
and the public over the last decade but it is perhaps surprising that complaints are not
higher given the number of demonstrations since 1997. The Legislative Council Panel
on Security considered separately, however, police action during the World Trade
Organisation demonstrations in 2005, the detention of fifteen protesters in 2007, and
police attitudes towards offences under the Public Order Ordinance.149
Table 11.4 Complaints against the Police by Initial Categorisation, 20022007
Categorisation
Assault
Misconduct
Neglect of duty
Unnecessary use of authority
Fabrication of evidence
Threat
Other offences
Police procedures
Reports received
2002
602
1080
1586
230
167
127
13
17
3822
2003
594
922
1443
172
168
65
9
10
2906
2004
682
971
1130
164
134
123
9
9
3222
2005
522
828
976
144
124
85
5
7
2691
2006
541
688
930
89
120
134
4
5
2511
2007
467
717
1063
103
97
119
0
3
2569
Source: Independent Police Complaints Council, Report of the Independent Police Complaints
Council 20022007 (Hong Kong: Printing Department, 19972003), Appendix VI.

Between 1997 and 2007, the number of assault cases, the most serious of complaints,
declined from 967 complaints (33% of all complaints) to 467 complaints (18% of all
complaints) and from 976 allegations (33.2% of all allegations) to 587 allegations
(13.5% of all allegations).150 This may be a result of improvements in police practices
ch.11(p.257-288).indd 281
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but it could also be a consequence of changes in the interpretation of what constitutes

assault. It is CAPO, not the complainant, which makes the initial determination of the
category into which the complaint should fall. The nature of the alleged offence may
prove difficult to categorise and different standards may apply at different times. In one
case, a complainant was categorised as alleging unnecessary use of authority when he
was being restrained by two officers and sprayed with pepper spray by a third.151 From
the complainants perspective, this might well be regarded as assault. An alleged punch
during the same incident, which appears to have done very little damage, was categorised
as an assault complaint. There is a widespread view that the police are sometimes violent,
especially to those in custody.152 Attempts have been made to make medical evidence
in assault cases more specific and to adopt suggestions for improvements arising from
individual cases. But none really overcomes the fundamental concern that policeman
are undertaking investigations of other policemen.

The initial categorisation is important largely because it determines the resources
devoted to the investigative process. Assault cases are treated most seriously and a
team is set up to investigate the complaint. Many cases cannot be pursued because the
complainant cannot be identified, because they are withdrawn, or because there are no
witnesses or insufficient evidence. Critics claim that many complaints are withdrawn
because complainants have no faith in the integrity of the process.153 As Table 11.5
shows, a large number of complaints fall into the withdrawn, curtailed or not pursuable
category. In cases other than assault, such as misconduct, which may involve overbearing
behaviour, abusive language or improper manner, or unnecessary use of authority, which
may cover a multitude of sins from minor infringements to quite serious incidents, CAPO
puts the emphasis on conciliation. In 2007, 21.3% of all complaints and allegations were
resolved in this way (see Table 11.5).154
Table 11.5 Resolution of Allegations against the Police, 20022007
Categorisation
Substantiated/substantiated
other than reported
Not fully substantiated
Unsubstantiated
False
No fault
Curtailed
Withdrawn/not pursuable
Informal resolution
Total no. of allegations
2002
2003
2004
2005
2006
2007
246
19
986
354
397
16
2526
1669
6213
265
21
1040
255
395
12
2735
1539
6262
253
14
1070
296
410
5
2570
1219
5837
145
8
854
244
271
25
2246
902
4695
100
4
610
187
152
7
1719
739
3518
100
5
769
160
148
1
2232
926
4341
Source: Independent Police Complaints Council, Report of the Independent Police Complaints
Council 20022007 (Hong Kong: Printing Department, 20032008), Appendix IX.
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CAPO may decide to conduct a full investigation of a complaint on its own initiative
or because the complainant demands that it do so.155 In 2007, CAPO fully investigated
1182 allegations of which 36 (8.9%) were found to be substantiated, 64 substantiated
other than reported and five were not fully substantiated (see Table 11.5).156 As the IPCC
points out, there is a much higher percentage of substantiated cases in fully investigated
cases than of the total number of allegations where the substantiated rate is only 2.3%
(see Table 11.5). Once CAPO has completed its investigation, the results are passed to
the IPCC for consideration. In 2007, the IPCC had only 22 full-time staff and the extent
to which all cases can be examined in detail must be in question. It has the power to call
witnesses but this is only rarely used. The examples provided in the annual report suggest
that the Council gives most attention to cases where it believes that there may be major
discrepancies between its own views and those of CAPO and where there are serious
cases that warrant attention. The Council has a Serious Complaints Committee which
monitored five cases in 2007.157 After its consideration of CAPOs findings, the IPCC
may ask for explanations on the thoroughness of the investigation, the classification, or
compliance with police procedures.158 It may also make suggestions for improvements.
In 2007, a total of 1700 queries/suggestions were raised of which 1205 were accepted
by CAPO and satisfactory explanations were given for the remainder.159 The final stage
of the investigation is the disposition of cases and their classification. The classification
does have an important bearing on the disciplinary action that will be taken. In 2007,
90 officers were disciplined of whom 78 were given advice, ten were cautioned or
reprimanded and two were warned.160 One officer was prosecuted and given a custodial
sentence. After the classification has been decided, the IPCC ratifies the decision and
the process comes to an end.161

Two conclusions may be drawn from CAPOs experience. The first is that whether
or not CAPO conducts investigations fairly in most cases, it would appear to do so
the public perception of what it does is more important than the actual practice. And
that perception is that CAPO is not impartial. The police argue that only they have the
knowledge to investigate cases properly. But this was the original argument against
independent investigations of corruption and it has not held up. A related argument that
an independent body would affect police morale has also been largely discredited by the
ICAC experience which probably has helped to improve the image of the Police Force
and increased public confidence in the investigation of complaints against corruption. A
second conclusion is that it should be possible for the police to take a less procedural
and more substantive view of justice. The presumption of innocence for police officers
who are accused of some form of misconduct does accord with normal legal practice
under the common law. But CAPO is not a court and many of those who are aggrieved
the young men and blue collar workers who constitute a majority of complainants
may have little experience of what constitutes evidence or of how to present a case.
To apply strict procedural guidelines under such circumstances may be inappropriate.
In a court of law, ideally, both procedural and substantive justice should be seen to
be done. In an institution concerned with redress, the balance should perhaps be tilted
rather more towards substantive justice. The playing field, as it presently stands, is not
entirely level.
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Departmental Complaint-handling Units

In line with the principle, which has been in applied since 1979, that complaints should be
handled at the lowest level possible, almost all departments in the Hong Kong government
have some form of complaint-handling mechanism. Those departments which have the
most direct dealings with the public have developed the most sophisticated systems for
dealing with them.

The Transport Complaints Unit, for example, is well established. In 2007, it received
20,190 complaints of which 15,402 were about public transport issues, many related
to taxis, 1184 were about traffic conditions, 318 were about road maintenance, 2968
were about enforcement and 318 were on miscellaneous matters.162 Over the decade
19972007, there has been a steady increase in complaints about public transport and
the enforcement of the traffic regulations and a decline in complaints about traffic
conditions and road maintenance. The Unit has a number of features characteristic
of successful complaint-handling bodies. First, it is independent. It is monitored by a
sub-committee of the Transport Advisory Committee, which is composed of non-civil
servants and does not come under the Transport Department. Second, it is very easy
to make a complaint; most complaints are made through the Units telephone hot-line
with the remainder coming through e-mail, fax or mail. Third, complainants can expect
action on their complaints. A majority of complaints some 66% in 2007 were
found to be substantiated.163 The relevant departments or organisations were contacted
and complainants were informed of the outcome. Fourth, the Transport Complaints Unit
relays its statistics to the Transport Department to help solve persistent problems and
refers reports of serious infractions to the police. Finally, the Unit is inexpensive and the
number of officers involved is small, considering the number of complaints involved.
There have been occasional criticisms that investigations are superficial and that the
complainants are often only fleetingly concerned about the issue. But that may also mean
that the complaint can be rectified or explained quickly and that there is no need for a
more extensive investigation. Similar simple types of complaint-handling mechanisms
have also been established in the Inland Revenue and Water Supplies Department, both
of which also receive a large number of complaints.

Other types of complaints may pose more difficult problems. Medical complaints,
for example, may range from relatively minor problems to potentially life-threatening
situations. One case, in particular, aroused public interest: a patient complained that
her doctor had answered a mobile phone call while conducting an operation. The
case led to a debate in the Legislative Council over the need to reform the medical
complaints system. Complaints against doctors are handled by the Medical Council of
Hong Kong, a body with responsibility for regulating the conduct of doctors mainly
composed of 24 doctors but with four lay members who take part in most stages of
the complaints procedure.164 The Council has a Preliminary Investigation Committee
to which complaints are initially referred but it seems that this includes any potential
problems that the Council faces with doctors (such as, for example, advertising or a
court conviction for careless driving). Complaints from patients constitute only part of
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the work of the Committee. Of the 472 complaints that the Council received in 2007,
320 were concerned with doctors professional responsibility towards patients.165 Most
complaints were dismissed as frivolous or groundless and only 99 complaints of all
kinds were considered by the Committee which then referred 34 of them to the Council.
Twelve complaints concerned with professional responsibilities to patients were found
to be substantiated and a further eight relating to the issuance of false or misleading
certificates were found to be justified.166

The mobile phone case added to concerns about the complaints procedures
employed by the Medical Council. The Legislative Council discussed the issue in May
2001 with members calling for the creation of an independent body.167 The Secretary
for Health and Welfares view was that a Complaints Office, dealing with patient care,
should be set up within the Department of Health. The motion to establish an independent
medical complaints body was defeated.168 A Legislative Councillor returned to the issue
in 2008, eliciting a response from the Secretary of Food and Health which suggested that
the procedures employed were not transparent and that, while it was easy for patients
to lodge complaints, the Medical Council provided them with no assistance in ensuring
that they had the appropriate documentation.169

The mobile phone doctor case also raised the issue of how other professional
bodies handle complaints against their members. The dominant position of professional
elites in Hong Kong has made it difficult to reform bodies which traditionally have
been self-regulating. But a more critical public, and several scandals, have led some
professional bodies, such as the legal and surveying professions, to examine their
practices more closely. At the same time, the closer relationship between complainthandling institutions has led to attempts to standardise practices and to ensure that
referred complaints are handled with appropriate thoroughness.170 These efforts and the
well-publicised criticisms of CAPO and the Medical Council of Hong Kong are likely to
lead to greater scrutiny of the practices of the departmental complaint-handling units.
Administrative Tribunals and the Administrative Appeals Board

Administrative tribunals may be established to serve a variety of different purposes. They
may resolve disputes, hear appeals against government decisions, act as commissions of
inquiry, or to make policy decisions on behalf of the government. These functions are
not necessarily performed exclusively by bodies primarily designated as administrative
tribunals. In some respects, for example, the Executive Council may be regarded as an
administrative tribunal because some ordinances permit appeals to be made to it. The
Administrative Appeals Board also hears appeals under the provisions of 46 ordinances
and may reverse the original administrative decision. With the range of laws and
institutions involved, it is scarcely surprising that the practices of administrative tribunals
have sometimes been criticised. Do complainants have the right of appeal against the
findings of the tribunal? Are the powers of the tribunal sufficiently publicised? Should
procedures meet standards and rules of evidence that might apply in a court of law or
should they be more informal? Should tribunals provide reasons for their decisions?
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Do those who hear the cases have appropriate qualifications? We consider these issues
below.

One criticism of the work of tribunals is that they allow no appeal against their
decisions except for the general remedy of judicial review. Many tribunals have
been created to hear appeals from individuals against a government action which has
detrimentally affected them. A complaint which falls into this category might not even
be considered by other complaint-handling institutions. The ombudsman, for example,
may not take a complaint if the complainant has a right of appeal or an objection to
the Chief Executive, the Chief Executive in Council, any tribunal constituted by or
under any ordinance, or any board or other authority so constituted.171 In practice, the
complainant may have no choice as to where the case is heard and there may be no
appeal against its decision.

Yet many of the matters that come before tribunals are extremely important. The
Immigration Tribunal, for example, hears appeals against deportation from Hong Kong.
As a leading lawyer has pointed out, those affected by the decision of the Director of
Immigration to deport them may not even know that they have the right of appeal to the
tribunal.172 Even if they were to appeal against the Directors decision, the Immigration
Tribunals finding would be final. Similarly, the Registration of Persons Tribunal,
the Mental Health Review Tribunal and the Addiction Treatment Centre Board make
decisions from which there is no appeal. Where the provisions of an ordinance require
cases to be heard by a tribunal, when its decisions are final and no reasons need be given
for its decision, and where there may be questions about its procedures, there is cause
for concern that this form of redress does not meet the criteria of fairness and natural
justice for the complainant.

There have been attempts to improve the practices of tribunals. Some tribunals
do give reasons for their decisions and there has been more concern over procedure.
There are nonetheless evident weaknesses that still have to be addressed. The Director
of Immigration has wide discretionary powers and rarely gives reasons for his decisions,
which makes it difficult to take a case to court on the grounds of unreasonableness. Dykes
has argued that the powers are so wide that there is a case for immigration guidelines
which would explain the use of discretionary powers to be presented to, and approved
by, the Legislative Council.173 The tribunal is chaired by a retired High Court judge and
some of the adjudicators are legal professionals, at least one of whom must sit on each
case.174 But it is not clear how the other adjudicators are selected, what qualifications
they have, and what procedures must be followed. A related tribunal, the Registration
of Persons Tribunal, which hears appeals against the decision of a registration officer
to refuse to issue an applicant with a permanent identity card, does provide guidelines
for its adjudicators whose role is restricted by the ordinance to the factual determination
of whether or not a person is entitled to right of abode in Hong Kong.175 Again, it is
unclear how the adjudicators are selected.

The Labour Tribunal has suffered from procedural problems. The Tribunal was
set up in 1973 to provide a quick, informal and inexpensive means to settle monetary
disputes between employees and employers, precepts to which it still subscribes.176 It
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does not permit legal representation although, apparently, some companies simply sent
along their lawyer to represent them, a practice which placed the worker at a considerable
disadvantage.177 There were also complaints from employers, many of whom found the
practices of the Tribunal to be cumbersome and time-consuming.178 In 2004, a review
made recommendations which extended its jurisdiction, improved its processes for
conciliation and settlement and tightened other procedures.179 Since the review, there has
been a marked improvement in waiting times for cases to be heard and settled.180 The
Labour Tribunal, together with the Lands Tribunal, the Obscene Articles Tribunal and
the Small Claims Tribunal, falls under the Judiciary. There are considerable variations
in practice between these tribunals because each fulfils a specialist purpose. But there is
still room for considering whether those who are party to a dispute or are appealing an
administrative decision are being best served by those who are appointed to the tribunals
and by those who oversee their procedures.

The Administrative Appeals Board meets the criterion that practices should, as far
as possible, be standardised in the interests of fair play. It was established in 1994 by
the Administrative Appeals Board Ordinance and allows the right of appeal against some
administrative decisions under 66 ordinances. The Board does draw on legal experts,
its sessions are public, the appellant has the right to attend and to be represented and
the Board is required to state its reasons in writing. Despite these positive elements, the
Board seems little known as an avenue for redress and there is almost no government
publicity for its activities.

Each of the types of institutions which we have been considering those that
protect civil liberties, those that can make systemic improvements, and those that redress
individual grievances can all play a significant role in reducing the legitimacy deficit.
The government starts with the disadvantage in dealing with these organisations that
it is likely to be seen as the principal cause of inadequate protection of civil liberties,
the source of policy weaknesses or the reason for insufficient corruption controls, or
the perpetrator of arbitrary, unfair or illegal administrative decisions. Hong Kong has a
civil society, which is deeply and continually concerned about the preservation of civil
liberties, and a relatively free press, which brings violations of human rights or dubious
practices in the institutions which are supposed to protect them to public attention.
Under such circumstances, the government gains no political benefit from ensuring
that the institutions which protect civil liberties or make contributions to the resolutions
of complaints or grievances function well. If these institutions do perform well, they
receive credit from the public; if they do not, the governments numerous critics will
soon identify their shortcomings. Institutions which protect civil liberties or resolve
complaints or grievances are not, in short, likely to increase the governments support
or legitimacy. What they may do over time, if they function successfully, is to reduce
the legitimacy deficit under which the political system labours by providing support for
values which ensure that citizens have recourse to justice in the face of arbitrary, illegal
or corrupt action by public officials.

Our question, then, is not whether the government can benefit in terms of support
from the effective performance of these organisations but rather whether the actions
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which it has taken protect citizens from the arbitrary exercise of power and, in so doing,
reduce the legitimacy deficit. The answer to that question, on the evidence presented
in this chapter, is somewhat mixed. The post-1997 government has been moderately
supportive of these institutions. It has formally endorsed the principal values of the
redress system: impartiality, fairness and thoroughness of the investigative process.
Some organisations have become so much part of the fabric of the system and have
so much public support that it would be difficult for the government to undermine
what have become institutionalised procedures. The Legislative Council, the ICAC
and the ombudsman all act in ways which are well known and well respected. The
government has implicitly recognised their role and there has been no suggestion that
their investigative procedures or independence should be compromised.

For other organisations, the government appears to have taken the view that it would
prefer not to see issues become matters of public controversy and that, if they become
so, it will seek to change the direction of the organisation. The failure to re-appoint Anna
Wu as Chair of the EOC was widely interpreted to have been a consequence of her
confrontation with the government in the courts on issues relating to the implementation
of its own legislation. There remain, too, problems with other redress institutions
which the government has yet to resolve satisfactorily. Critics of the handling of police
complaints would argue for stronger powers for the Independent Police Complaints
Tribunal; there is a case for a medical complaint-handling body independent of the
Medical Council; some administrative tribunals have been reformed but many others
could benefit from review; and the Administrative Appeals Board could function more
effectively as a redress institution. The government has been intent on maintaining the
quiet, if sometimes unsatisfactory, routine operation of these institutions. It seems to have
missed the potential to use them to reduce tensions within an executive-led system in
which there is no prospect of changing the government and where democratic checks
and balances have not been fully developed.
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12
The Public Sector and Its Future
t is not easy to govern Hong Kong. Aside from the overarching problem of the
relationship between the government and its people, there are many specific
constitutional, organisational and policy issues which affect the way in which the public
sector works. The Basic Law does not function in accordance with its central precept:
the executive cannot lead and provide strong governance because it is constrained
by a civil society which is often less than convinced that the government is acting in
its best interests. Relationships between the executive and the legislature have still not
been sufficiently delineated. There is no majority government party and no certainty that
government proposals will be accepted. The civil service maintains its high administrative
capacity but it suffers from some structural and human resource management weaknesses
and low policy capacity. The public sector beyond the civil service is not properly
accountable and does not always work in harmony with the government. There are major
problems in formulating and implementing new policies because of frequent trenchant
opposition from civil society groups and the legislature. And above all this the polity
is polarised between those who support the existing order and those who want to see
a rapid transition to a more democratic system. Under such circumstances, to provide
responsible government is a daunting task, especially if external challenges, over which
the government has little control, require urgent action.

In this concluding chapter, we revisit those issues, seeking to understand how the
present problems arose and looking to the future to see how they might be resolved.
The Problems of the Transition

An important feature of colonial administration was that the principal institutions
the Governor, the Executive Council, the Legislative Council, the Judiciary and
the Civil Service were very closely integrated. The fusion of administrative and
political functions, the absence of direct control from London, and public acceptance
of the bureaucratic order resulted in a centralised, autonomous system that restricted
political participation but still managed to maintain stability and promote economic
growth. It was a system that held some attraction for the Chinese government. By the
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time negotiations were completed on the future of the territory, it seemed possible that,
although there might be a change of sovereignty, the system would remain intact. On
the Chinese side, the concept of one country, two systems gave recognition not only
to the importance of capitalism but also to the political, administrative and legal supports
that made it possible. On the British side, there was a clear intention to leave a legacy
of freedom without democracy, executive government without the embarrassment of too
many legislative controls, and the continuing dominance of an efficient civil service.
The Chinese government proved quite willing to write such provisions in very general
terms into the Basic Law. The existing political and administrative arrangements had
the backing of the business community and pro-China groups and, with the exception
of some vague concessions to future democratic development, the political framework
strongly resembled the pre-1997 colonial constitution.

There were three problems. The first was that the population became increasingly
politicised as a result of the Sino-British agreement and the Tiananmen Square massacre,
and began to demand more representative government and more protection of their civil
liberties. Just before the retrocession in 1997, Patten observed that whenever there was a
fair test of public opinion approaching two-thirds of the electorate support a democratic
agenda.1 It may be, as some scholars have argued, that there was uncertainty about the
kind of system that might be introduced, the niceties of different types of democratic
political order, or the degree to which constitutional development should take priority
over the pressing problems of the economy, unemployment and housing.2 But that was
perhaps less important than the fact that every poll showed that a majority were not
happy with the existing political system and that they had declining levels of trust in their
government.3 The changes to protect civil liberties and expand the franchise introduced
by the colonial administration towards the end of the transitional period were responses
to that dissatisfaction. And, although the electoral reforms did not survive the handover,
and the measures designed to protect civil liberties were seen to be fragile, they created
expectations of progress towards a system that was more representative. When the
incoming government dissolved the Legislative Council on 1 July 1997 and subsequently
introduced an electoral system which the democratic parties felt discriminated against
them, support for the new political framework, which appeared to be more autocratic
than the departing colonial administration, was eroded from the outset.

A second problem was that the position of Chief Executive did not equate as easily
with the old position of Governor as might have been supposed. In colonial Hong Kong,
the Governor tended to meld with the civil service rather to stand apart from it. There
were governors, such as MacLehose, who sought to transform the colony, but they tended
to be the exception rather than the rule. When Tung Chee-hwa became Chief Executive,
there was little doubt that he wanted to bring about major changes. Some problems were
inherited from the transitional period where difficult decisions were postponed to avoid
political unrest, but most of the impetus for change probably came from Tungs desire
to stamp his own imprint on the administration, from behind-the-scenes advice from
his political supporters, and from the Chinese government. Whatever the cause, there
was an increasing tension between Tung and his senior civil servants, especially when
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The Public Sector and Its Future 291
policies could not be successfully implemented. Pollitt and Bouckaert have described a
similar process in other countries as distancing and blaming where a Chief Executive
seeks political distance from the government by blaming it for failure to perform to
expectations.4 This may set the political stage, as it did in Hong Kong, for public sector
reform. The existing civil service system was no longer seen as appropriate for the kind
of public service which Tung wished to create.

A third problem was that the values that underpinned the bureaucratic polity,
critical as they were, were not formalised into the constitutional arrangements. Neither
the Joint Declaration nor the Basic Law captures the intricate relationship between the
values which the civil service held dear and the construction of its dominant position
within the polity. There is no mention in the Basic Law of such values as meritocracy
and political neutrality. But a bureaucratic polity requires, as any political system
does, a justification for the particular arrangements that entitle its office-holders to
exercise power. Legitimacy requires consent and moral and legal authority. The colonial
administration had a continuing deficit on each of these counts although it did claim
to have the consent of the people. What evidence supported that claim? How could
consent be justified in a system which provided no means of democratic legitimation?
The colonial administration offered a number of elaborate answers to those questions,
including its performance, its efficiency and its support for such values as meritocracy
and political neutrality, all of which were used to justify its moral claims to rule. Perhaps
the most important of those claims was that senior civil servants had epistemocratic
authority, that is, that they were entitled to rule because they were the wisest and most
able people available and because they were imbued with a public service ethos which
meant that the decisions that they took, as far as they were able to ensure, were in the
best interests of the people of Hong Kong.

If one reads the memoirs and speeches of senior civil servants in Hong Kong, the
importance of the public service ethos is a recurring theme. In her valedictory speech,
Anson Chan, the outgoing head of the civil service, said that as a young administrative
officer she had been told that:
you have joined a very special service which has an excellent reputation
built up by the people who have gone before you. Your obligations as an
administrative officer are simple. You must serve the people well and you
must serve them with honour.5
It was, she said, advice that she passed on to her younger colleagues. When her successor,
Donald Tsang, was asked about the differences between himself and Anson Chan, he
stressed instead their common commitment to the people.6 Many other senior civil
servants have testified to the importance of the public service ethos as a value which
created expectations about the role that civil servants would play in the community.7 In
the Civil Service Training Centre, as it then was, fresh graduates on the first day of their
induction course were asked why bright young men and women such as themselves were
prepared to serve a colonial regime. In the embarrassed silence that usually followed,
the instructor provided the answer: they were not there to serve a colonial regime; they
were there to serve the people of Hong Kong.
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To be overly-cynical or overly-nostalgic about such professions of the importance
of the public service ethos misses a critical point. In any Weberian system of public
administration, public service as a vocation, meritocratic recruitment and political
neutrality are central values. But in most Weberian systems, such values did not by
themselves legitimate the exercise of power because there was also normally a political
order, often democratically legitimated, which gave elected representatives a mandate to
decide on what was in the best interests of the people. In the bureaucratic polity of Hong
Kong, if civil servants were to exercise power, they needed legitimating principles to
justify what they were doing. Public service as a vocation provided one such justification.
Because the commitment of senior civil servants to the public interest was a value that
was rarely called into question and because civil servants were supposedly drawn from
the most able members of the community, the bureaucratic polity derived political
authority and legitimacy from the notion that it not only provided for rule by the wise
but that those officials were committed to the public good. Nor should we be surprised
that this justification proved so successful. Although it is sometimes argued that Hong
Kongs pre-1997 political system was unique, the ideas on which it was based had a
long pedigree. Confucius and Plato would both have approved of a system in which
able new recruits to the civil service were socialised and trained in a commitment to
public service and where popular influence on government was restricted.

Despite the importance of these bureaucratic supports for the system, they were not
sufficient to prevent the colonial administration from suffering from occasional crises
of legitimacy and from an enduring legitimacy deficit. There remained major problems
of consent and of legal and moral authority which the colonial administration could
attempt to reduce but could never entirely resolve. The absence of alternative forms
of legitimation became even more evident when it became clear that Hong Kongs
democratic development was about to be curtailed. The authority of the post-1997 system
was undermined by the dissolution of the Legislative Council and it was to be further
compromised by the blame that the government received for its handling of the economy
and for its policy failures. The question was which values, if any, might replace those
of the colonial order.
The Values of the Post-1997 Government

The answer to that question was not immediately obvious. If Tung Chee-hwa had
assumed the mantle of a colonial governor and defended his civil service against the
criticisms of his own supporters in the business world, and if the Chinese government
had refrained from interfering in Hong Kong, as it initially seemed inclined to do, then
it is possible that the existing system might have continued for some time. But the life of
the bureaucratic polity was essentially limited by the political pressures from Tung, his
supporters, and the Chinese government, on the one hand, and from the democrats, on
the other. There was declining public support for a system based on rule by civil servants.
The Tung administration wanted a new order which asserted political control over the
civil service. It sought to bring to government what it regarded as the virtues of private
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sector practices. The relative autonomy which the civil service had previously exercised
in relation to decisions affecting the business community was eroded. The democrats,
for their part, were looking for a more accountable system, especially following the
tensions between the Legislative Council and senior civil servants in the immediate
aftermath of the retrocession.8 To fill the void, the government proposed two solutions.
The first was the introduction of managerial reforms which either re-interpreted the
meaning of old values, such as efficiency or responsiveness, or sought to establish new
values within the civil service which undermined the traditional norm of public service
as a vocation. With more managerialism in government, the emphasis was on the ability
to accomplish politically-determined ends rather than the notion of the public service
ethos. Managerialist values tend to emphasise the achievements of the individual rather
than collective efforts. The reform programme, introduced in 1999, put some of these
values in the forefront of future civil service practice. It supported the introduction of
more contractual conditions of employment, under which renewal would be determined
by performance, the use of performance pay as a motivator, and harsher sanctions for
failure to meet minimal standards.

As the experience of other countries has shown, to pursue such an agenda is difficult
enough under normal conditions. In Hong Kong, the government introduced its public
sector reforms at a time when it was suffering from a significant budget deficit. This
was attributed in part to the high operating costs of a civil service which the government
and the business community believed was too large and too well paid. It is possible to
introduce reform programmes, as the Hong Kong government itself showed in the mid1990s, which enjoy the support of civil servants. But the public sector reform initiatives
soon became synonymous with downsizing and salary cuts. The notion of employment
in the civil service as a life-time career was replaced with programmes which brought
in new recruits on short-term contracts and offered voluntary retirement to longerserving officials. As salaries were cut, new organisational changes were introduced,
and public criticism grew, morale in the civil service declined alarmingly.9 Core values
seemed increasingly under threat. And there was nothing to replace them except for the
governments hope that increased productivity and efficiency would result from a leaner
civil service.

The second measure taken to replace the bureaucratic polity was to shift political
control from senior civil servants to a new hand-picked political executive under the
Principal Officials Accountability System. Tungs diagnosis of the problem was probably
correct. There were demands for greater accountability after a series of scandals
relating to the handling of the avian flu issue, the opening of the airport, and the faulty
construction of housing projects. But the Principal Officials Accountability System did
not resolve the problem. Its fundamental weakness was that the Principal Officials were
only accountable to the Chief Executive because only he and the Standing Committee of
the National Peoples Congress in China could appoint and remove them. To legitimise
the system would have required a role for the Legislative Council in the appointment
process but that was not possible under the Basic Law and would probably not have
been approved by the Chinese government even if it had been feasible.
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A second weakness was that the Principal Officials Accountability System was
interpreted as an attempt to undermine the concept of political neutrality. In its reiteration of the importance of political neutrality, the government shifted ground from
the emphasis that Anson Chan had placed on speaking truth unto power 10 to the
notion that a civil service should be loyal to the government in power. The difficulty
was that the government did not have express consent to exercise power; the source of
its authority was the Basic Law which had never been approved by the people of Hong
Kong. A third weakness was that Principal Officials soon had their own policy and
personal scandals with which to contend. Tung contributed to the problem by failing
to ask for the resignation of policy secretaries who had made serious mistakes which
gave the impression that the system was no more accountable than its predecessor. The
new system also meant that some senior civil servants had to make a choice between
becoming Principal Officials or remaining as civil servants. This fragmented the senior
civil service between those who were willing to make a political commitment and those
who continued to see themselves as career civil servants albeit with reduced powers.

Neither the managerialist reforms nor the Principal Officials Accountability System
answered the problem of providing new values and institutions to replace the bureaucratic
polity. Rather, they contributed to the further disarticulation of the political system.
The Basic Law does not specify sufficiently how co-ordination between the principal
institutions will occur; the emphasis is on the powers and duties of the institutions, not
their relationships with one another. It may be surmised that the drafters thought that
co-ordination would probably occur much as it had done in the past: that an executiveled government would ensure that other institutions were brought into line and that
policy formulation and implementation would consequently be unproblematic. That
was a reasonable assumption at the time that the Basic Law was drafted. But it became
less plausible in the last years of the transition as the Legislative Council became more
critical of government action, as parties and pressure groups began to emerge, and as
senior civil servants found that they had to play politics to get their policies accepted.

After the handover, some senior civil servants attempted to return to less political
roles by appearing less frequently before the legislature which they were entitled to
do under the provisions of the Basic Law. Relations between the government and the
Legislative Council deteriorated as a consequence and, on the part of the democrats,
became increasingly hostile. The right of abode issue and its impact on the relationship
between the government and the judiciary and the attempt to legislate under Article
23, which resulted in very large street demonstrations, further exacerbated the distance
between the government, other major institutions and the people. The democrats began
to call for Tungs resignation. This was already a volatile mix. When the government
added to that mix a public sector reform programme, which was seen to focus on
downsizing and salary cuts, and attempted to increase political control over the civil
service, bureaucratic dominance came to an end. The cost of those highly political
decisions was a more fragmented polity and greater disarticulation among its principal
institutions.
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When Tsang became Chief Executive, he was faced with the task of re-vitalising a
demoralised civil service. Reversions to past practices helped to resolve some problems.
The Chief Secretary for Administration and the Financial Secretary were re-instated as
the principal gatekeepers through which new policy proposals must pass; the central role
of the administrative grade as the glue that held the structure together was re-affirmed;
and an end to downsizing, salary increases, and some modest increases in recruitment
helped improve morale. But there were other aspects of Tungs legacy that were not
so easily resolved. The attempts to exert greater political control over the civil service
through the Principal Officials Accountability System could not be reversed and, amid
considerable controversy, was extended to include Deputy Directors of Bureaus and
political assistants. The effects of reducing salaries at entry points and then raising them
when the standard of new recruits dropped had a detrimental impact on the morale of
those recruited at the lower level. Formulating and implementing new policies remained
as intractable a problem for Tsang as it had been for Tung.
Policy and the Disarticulated System

A disarticulated system has detrimental effects at different stages of the policy process.
If the central institutions are not co-ordinated, there may be problems initially at the
formulation stage, especially if the policy requires that different departments, and
possibly non-government agencies, are to be involved in its implementation. The
Principal Officials Accountability System enhanced the autonomy of bureaus and
maximised vertical policy formulation and implementation at the expense of lateral coordination. Since Tsang came to office, there have been some improvements in policy
co-ordination although nothing appears to have been done to speed up the often laborious
processes of consultation over policy between bureaus and between departments.

Other dangers for successful policy formulation and implementation emerge once the
policies become public. Although the Legislative Council is hampered by the relatively
weak powers allocated to it under the Basic Law, it has utilised its powers to good
effect. The government faces a number of different problems in its attempts to persuade
the legislature to adopt its proposals. First, and perhaps most serious, it does not have
a majority government party in the Legislative Council to ensure that its policies are
endorsed. Tung Chee-hwa made it clear that he had little time for political parties, a
view that echoed the position of the Chinese government. Although the governments
policies under Tung and in the first Tsang administration were generally supported by
the Liberal Party and the DAB, the political climate has gradually become more fluid
as parties have become more sensitive to the electoral implications of policy measures.
After the September 2008 elections, the election of a small majority of left-of-centre
legislators, and the decline of the Liberal Party, meant that the government faced even
greater difficulties in obtaining policy approval. For that reason alone, its attitude towards
constitutional reform, which could involve a reduction of its support from the present
functional constituency members, may well be ambivalent. Second, there are now many
experienced legislators who use their knowledge of Council procedures to grill Principal
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Officials and senior civil servants on their proposals and attempt to ensure that they
are accountable once policy is implemented. Unlike the colonial legislature, where the
appointment system, until the last few years of the transitional period, ensured that the
government always had a majority, the Legislative Council has now emerged as an
alternative source of constituted authority.

Even if a policy proposal passes the scrutiny of the Legislative Council, there is
no guarantee that it will be successfully implemented. Opposition to a government
policy on a massive scale such as greeted the proposal to legislate under Article 23 is
rare. But there are many smaller pressure groups that can join in coalition to frustrate
government intentions. These are often new political actors. They are not the usual
suspects but well-educated citizens who may be campaigning at a higher, smarter
level on such issues as taking the government to court over the harbour reclamation
issue or organising investors who claim banking malpractices on the sale of Lehman
Brothers minibonds and equity-linked notes.11 These groups are difficult to deal with
because they are sometimes created in response to a policy announcement or an event,
and consequently cannot be consulted prior to the decision, or they may be fragmented
into many smaller groups. Their methods include thorough research of policy issues,
development of possible alternative courses of action, and knowledge of how to
campaign and get media attention.12 The government cannot easily mollify these loose
coalitions of pressure groups; the opposition is hydra-headed and concessions to one
group may not necessarily satisfy another.

Policy, in this sense, creates its own politics. Rather than controlling the timing,
presentation and politics of the process, as the colonial administration did, policy ideas in
the disarticulated, polyarchic system of post-1997 Hong Kong can come from anywhere.
If the policy comes with the backing of the government, it will often provoke opposition
from civil society which may be strong enough to veto the proposal. There are areas,
even controversial areas, where the government can still formulate and implement
policies successfully and where senior civil servants make policy much as they did in
the past. But the long string of policy failures under Tung and the delays and retreats
under Tsang suggests that more attention needs to be paid not only to the consultative
framework but to the politics of the policy-making process.

Successful policy-making is critical to a regime which seeks to pin its colours to the
banner of performance legitimacy. If the government believes that it can gain support, or
reflected glory, from a more prosperous Hong Kong, then its policies must contribute to
that prosperity. There are evidently considerable doubts about whether that has occurred
during the chequered economic experience of Hong Kong since 1997.
The Legitimacy Problem

In the course of this book we have explored in passing the consequences of legitimacy
problems for the way in which power can be exercised. A crisis of legitimacy occurs
when the political arrangements do not have the consent of the people and where there
are serious doubts about whether the government has the legal and moral authority
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to exercise power. Short of a crisis, there are ways in which legitimacy deficits may
be reduced. However, they require addressing systemic problems, not simply efforts
to increase support for the government. Governments may generate support in many
different ways by cutting taxes, for example, or by providing desired collective goods.
But those short-term political gains should not be confused with resolving fundamental
issues of consent and legal and moral authority. Nor should legitimacy be confused with
political stability. A regime may preside over long periods of stability and still suffer
from a legitimacy deficit; colonial Hong Kong is a case in point.

It follows that there are three analytically distinct courses of action that a government
may take to resolve the problems of lack of consent and of insufficient legal and moral
authority. It may seek, first, to increase its own support in the short-term. This will not
resolve its legitimacy problems but it may temporarily dampen opposition and promote
greater political stability. Second, it may attempt to improve governance mechanisms
by investing resources, for example, in the way that it makes policy and delivers public
goods, in enhancing its consultative arrangements, or in strengthening its complainthandling and redress institutions. Again, this does not resolve the fundamental legitimacy
problem but it does reduce friction and may help to avoid financially and politically
costly policy failures. Third, addressing the legitimacy problem requires answers to the
question of how power is to be exercised, what supports and values are central to the
system, and how authority may be constructed so that it is seen to be both legal and
moral. What is the post-1997 governments record in these respects?
Generating Support
Tung Chee-hwa believed that, if people were economically satisfied, any problems with
the political system would be greatly reduced and might even disappear.13 His successor,
while initially recognising that the political order constituted the fundamental problem for
his administration, subsequently looked to address economic issues as a priority during
the global financial crisis.14 Governments do rely on economic performance for their
political support but it is often a short-term electoral consideration rather than a matter
which affects the legitimacy of the system. In Hong Kong, however, the performance
legitimacy which the government derives from economic success has been viewed
rather differently. The sustained period of growth under colonialism was attributed not
simply to the sound policies of the government but to the values and practices which
underlay the political system. The administration claimed legitimacy from its vigilance
in defending such core values as a low tax regime, small government and free trade;
prosperity was a function of the system, not only of specific policies. The post-1997
government, similarly, placed its record in managing the economy as the benchmark
by which it should be judged. By implication, governments which could not attain that
end were not deserving of support and did not deserve to rule.

The economic difficulties which Hong Kong has faced over the last decade or so
have been well beyond the reach of the administration. Global economic conditions
and uncontrollable epidemics have provided the government with an escape clause. But
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they have also highlighted the limits to its jurisdiction. It has been unable to deliver
on its promises and the economic vitality of the community has only been sporadically
maintained. Tung presided over a period of economic under-performance and budget
deficits; Tang reaped the benefits of a recovery only then to experience the consequences
of the global financial crisis. When the government cannot deliver, even if the causes
of its failure are beyond its control, the connection between economic well-being and
the political system is lost. It is not possible to claim that prosperity is the result of
a particular system of government if there is no prosperity. Performance legitimacy
consequently has a much more restricted ambit than it had under colonialism. Economic
policies may still be used to garner short-term support but their contribution to the
maintenance of the system is likely to be minimal.
Investing in Political Infrastructure

One way in which a regime can avoid a legitimacy crisis is to invest in its own political
infrastructure. The colonial administration not only absorbed economic and social elites
into the decision-making system but also offered a career structure for the most able local
graduates. This reduced potential dissent from outside the administrative system because
it meant that there were paths to power through the bureaucratic polity for those who
otherwise might have provided a formidable opposition to colonial rule. Civil servants
who reached the highest positions in the government were well-rewarded financially
and in terms of their status in the community. In exchange, they provided loyal service
and support for the system.

The colonial administration also invested in its consultative networks. Although
this was often little more than window-dressing, it did provide the government with
some sense of public opinion even if its political antennae were not always sensitive
to changing views. What the government did manage to avoid was a groundswell of
opinion against colonial rule. The consultative process, however meaningless it was in
changing official policy, had the symbolic value of showing that the government wanted
to include, rather than to exclude, citizens from decision-making. In practical political
terms, this also meant that concessions could be made to groups if they were thought
to be necessary; opposition could be fragmented.

With the exception of the establishment of the Principal Officials Accountability
System, the Tung administration did not made any significant investments in political
infrastructure. Its circumstances were very different from those of the colonial
administration. The intention to exert more political control over the civil service,
coupled with salary reductions and downsizing, had the effect of disinvestment in what
was the central governing institution. It reduced the attractiveness of the civil service as
a career path for able young people but provided no other alternative channels for those
who wanted a stable career in government or who wished to accede to power. It was no
accident that the Tung administration was profoundly unpopular among the young and
the educated. Even the efforts that were made to invest in the political infrastructure
had little success; the consequence was that the political authority appeared to be
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distant from the people it purported to serve. The public service ethos was diminished,
if not destroyed, and the connecting links between government and the people were not
replaced and fell into disrepair.

The Tsang administration has shown more inclination to invest in the political
infrastructure, justifying, for example, more political appointees on the grounds that this
would create a career path in government for young people.15 Attempts have also been
made to strengthen the central consultative committees although not with the positive
results for which the government might have hoped. The opposition to the administration
is such that it is very difficult to institutionalise a consultative framework. Pressure
groups emerge, coalesce over certain issues, and then disappear. The more permanent
groups operate from entrenched positions and consensus is difficult to achieve. The
government, unlike its colonial predecessor, cannot use the consultative process to divide
and rule. There is a disjunction between the government and the society which requires
investment in new political infrastructure and support for those organisations, such as
those protecting civil liberties and providing redress, which help to reduce legitimacy
deficits.
Changing the Constitutional Framework

Constitutions are codified versions of power relationships between governments and
their people which may or may not reflect the realities of that relationship. The Basic
Law is based on colonial power relationships which prevailed before 1984. The degree
to which it is out of step with present realities has been a subject of continuing debate
and controversy, with the Chinese government and the administration stressing the need
to maintain existing provisions intact, and democrats, unionists, and some professional
and business groups arguing the need for change. The Basic Law does provide for
some progress towards democratic legitimation. Article 45 states that the ultimate aim
is for the Chief Executive to be selected by universal suffrage albeit after nomination
by a broadly representative nominating committee. Article 68, similarly, holds out the
prospect that eventually all the members of the Legislative Council will be elected by
universal suffrage. In April 2004, however, the Chinese government, formally acting on
the advice of the Chief Executive, but in fact stating its own clearly preferred position,
announced that there would be no universal suffrage for the selection of the Chief
Executive in 2007 or the Legislative Council elections of 2008.16 In 2007, it announced
a tentative date for the possible direct election of the Chief Executive in 2017 and of the
Legislative Council in 2020 but without providing any details on how the elections would
be structured and under what conditions. It is unclear whether functional constituencies
would be phased out to make way for universal suffrage or what provisions would govern
elections to the Legislative Council in 2012.17

The Chinese government has specified how it believes that the Hong Kong political
system should operate. It holds that certain principles should be in place before the
introduction of universal suffrage and greater democratisation. These include:
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One country, two systems which means the supremacy of the Chinese constitution:
without one country, there would not be a second system;
Hong Kong people running Hong Kong which means that patriots, defined as
those who would not harm their country, must run the SAR;
a high degree of autonomy but only exercised under authorisation by the Central
Government;
executive-led government: constitutional development in Hong Kong should not
deviate from this principle;
balanced participation which means regard for the interests of all sectors of the
society; and
gradual and orderly progress and the actual situation which should be reflected
in constitutional development.18
In short, Hong Kongs political executive would be composed only of those who
had the confidence of the Chinese government and would be supported by balanced
participation, a euphemism for the disproportionate representation of business interests
and pro-Beijing political parties in the Legislative Council and other influential bodies.
The Chinese government would monitor developments and would intervene if necessary
even if this meant that the guarantees of Hong Kongs high degree of autonomy in
the Joint Declaration and Basic Law were nullified. It is difficult to see how universal
suffrage, and the assumption that this might lead to democratic legitimation and to Hong
Kong people choosing their own government, could be introduced if these conditions
are strictly observed.

Constitutional issues do not simply go away because governments want them to.
Hong Kong people have been debating questions relating to the political order and
civil liberties for over 25 years, largely because the provisions in place do not match
their aspirations or are under threat from the actions of their government. Even Chinese
government officials concede that, if Hong Kong people were asked whether they wanted
a more democratic government or preferred the existing arrangements, a substantial
majority would opt for the former.19 If no regard is paid to those views and if the present
political system remains unreformed, the problems of poor governance and unsuccessful
policy-making which have plagued the post-1997 regime will continue. Even business,
traditionally governments strongest ally, ultimately cannot afford a situation in which
the administration is unable to deal authoritatively with pressing issues.

Many different political agendas are being pursued in the constitutional reform
debate. In an interview in late 2008, Tsang frankly admitted that he was not optimistic
about achieving a consensus. He said:
... the active politicians are miles apart on what they want. Some want a pure
one-man, one-vote single chamber which I have not seen anywhere else in
the world. Some others want the retention of all the functional constituencies,
re-constituted to meet the universal suffrage criteria.20
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Eventually, based on public consultation, Tsang will have to put a proposal to the
Legislative Council where it would need a two-thirds majority for approval. Since the
pan-democrats have over one-third of the seats, it is unlikely that any proposition which
does not show real progress towards universal suffrage would meet with their support.
The ingredients in this constitutional mix an intransigent Chinese government, a
weak Hong Kong government, a volatile civil society, and a global financial crisis
suggest that there will be increased, rather than reduced, polarisation within the polity.
For public sector organisations, the resolution of these constitutional and legitimacy
issues is critical for more efficient and successful performance. That they have not
performed to expectations since 1997 is not the result of a sudden decline in the ability
of their personnel or their commitment to the public interest but rather a result of the
disarticulated political system in which they have been required to operate.
A Reform Agenda
We began this book by identifying four areas in which the public sector had experienced
major difficulties: accountability and constitutional issues; organisational and personnel
difficulties; deficiencies in policy formulation and implementation; and relationships
between the government and the people. In this concluding section, we suggest in
broad outline reforms which might be undertaken to improve administrative and policy
capacity in those areas.
Accountability and Constitutional Issues

Although the resolution of the universal suffrage and democratic legitimation issues
remain highly problematic, there are reforms which could be undertaken to reduce the
level of disarticulation within the system and to improve governance. These reforms
could be introduced without amendments to the Basic Law and without involving
bitter party and factional disputes. They rest on the interpretation of conventions of the
constitution and the willingness of the executive to enhance its relationship with the
legislature. They assume that the Legislative Council has a fundamental role to play in
ensuring accountability.

First, there is a need to ensure that Article 64 of the Basic Law which stipulates
that the government should be accountable to the legislature is properly implemented.
The Directors of Bureaus are answerable to the legislature in the sense that they
respond to members questions and participate in debates and panels. But they are not
accountable to the Legislative Council in the important respect that they do not bear
ultimate responsibility for their actions. No matter what mistakes they make, their
political futures are not dependent on the Legislative Council. The legislature has no
say in the appointment or removal of the Directors of Bureaus who are not elected and
whose only source of legitimacy is their appointment by a Chief Executive elected by
a small electoral college. The accountability of the government would be strengthened
considerably if all political appointees (Directors and Deputy Directors of Bureaus and
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political assistants) were required to resign if a vote of no confidence in their performance

was passed in the Legislative Council.

A second area in which the legislature could enhance accountability is by adopting
a more proactive role in monitoring public sector organisations beyond the civil service.
A public sector organisation that is fully funded by taxpayers money should be required
to report annually to the legislature and to answer questions on its performance. Most
public sector organisations do provide annual reports but they are rarely examined in
detail by the legislature. The Director of Audit has begun to take a greater interest in the
affairs of non-departmental public bodies in recent years and has been responsible for
uncovering problems in such organisations as the Sports Development Board and the
Tourism Board but there is a need to supplement that role with legislative oversight. The
Public Accounts Committee can only respond some time after the problem has occurred.
There is a need for a permanent Legislative Council panel dealing with public sector
organisations outside the civil service. Related areas which require attention include
the composition of advisory and statutory bodies. The Home Affairs Bureau review
of those bodies has successfully increased the governments control over them but it
has not improved their wider accountability, representativeness or transparency. The
composition of statutory and advisory bodies still favours long-serving supporters of
the government. They still do not meet the governments own rule, and Donald Tsangs
electoral promise, that no member should serve on more than six boards or for longer
than six years. The Legislative Council has an important role to ensure that they move
in a direction which requires them to account more fully for the public money which
they spend.

To hold the executive and public sector organisations more accountable, the number
of members of the Legislative Council should be increased in 2012. The present 60
members are over-loaded and cannot devote the time necessary to provide more than
cursory monitoring of executive action. They also need more members to speed up the
passage of new legislation. The Bills Committee is at present restricted in the amount
of new legislation that it can consider and further delays may occur if issues prove to
be controversial. Members are also heavily involved in work on advisory committees, in
hearing complaints from groups, liaising with district councils and attending community
events. There is a need to spread the load to ensure that the Legislative Council has the
capacity to hold the executive accountable.
Organisational and Personnel Problems

Despite its turbulent post-1997 experience with reform, salary reductions and downsizing,
the Hong Kong civil service has retained its ability to administer existing policies
efficiently and effectively. The organisation of the civil service is appropriate for its
goals, staff are well qualified and trained in specific skills, and bureaucratic accountability
is realised through the hierarchy, through the reports of the Director of Audit and in
explanations of policies and procedures to Legislative Council panels. Nonetheless, the
civil service does have problems with formulating and implementing new policies, which
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we consider in the next section, with the erosion of the public service ethos, and with
the legacy of past attempts to reform, downsize and cut the costs of administration.

The attempts to introduce managerialist public sector reforms after 1999 have
had three important consequences. First, they have eroded the public service ethos
by emphasising managerial efficiency over responsiveness and by changing the
interpretation of such values as political neutrality. Now that the new public management
reforms appear to have been largely abandoned, there is a need to re-assert the public
service ethos, which could be done inter alia through the new Civil Service Code and
through the ICACs integrity management programmes.

Second, the public sector reforms affected recruitment and morale as a result of
the reduction of salary scale entry points to the civil service. The civil service became
another competitor for labour in the job market. In times of economic hardship, the
number of applicants for positions remained high but, as the economy improved, some
departments and grades, such as the Police Force, the Fire Services Department and the
executive grade, had difficulty retaining staff who had joined the service at the reduced
entry point.

Third, the staff who did remain found that the entry points were raised when the
government found it difficult to recruit. This resulted in a morale problem both for
staff recruited at reduced entry points who were often required to undertake the same
work as those on much higher salaries and, once entry points were raised, for those
who saw their years of service count for nothing in salary terms. There have also been
problems with the recruitment of non-civil service staff who have taken on the same
work as civil servants at lower pay. The logic of the reforms would make sense if the
Hong Kong civil service were to encourage substantial interchange of public and private
service personnel. But this has not happened. Once the government retreated from its
reform programme, the existing traditional bureaucracy was left without uniform terms
of service which has resulted in feelings of relative deprivation.

Downsizing and reducing salaries have also resulted in a loss of morale. Staff have
taken on heavier loads and, partly because of early retirements, the number of acting
positions has risen. Because of cost considerations, there has been a tendency to extend
acting appointments rather than make substantive appointments. The salary reductions
in 2003 and 2004 also caused a loss of morale. It is questionable whether the savings
in costs of lowering entry points, downsizing, and reducing salaries have been justified
in their effects on staff and the damage to the governments reputation as an employer
which leads rather than follows the private sector in good employment practices. There
is a need for the Standing Commission on Civil Service and Conditions of Service to
conduct a comprehensive review of the present situation and to make recommendations
to resolve the dysfunctions that result from it.

The inability of the government to formulate and implement policies to deal with longstanding issues in constitutional reform, health, housing, education and welfare has
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less to do with the structure and competence of its personnel than it has to do with its
relationship with civil society. The Tung administration was determined to implement
its policy agenda but eventually often found itself confronting hostile civil society
organisations which in effect exercised a veto over policy. When Tsang succeeded Tung
in 2005, he was necessarily cautious about introducing new policies both because his
first term was only for two years and because there had been no significant change in
the views of many groups on policy issues. Even after he was re-elected in 2007, the
government was far less executive-led than it had been in the first few years of the
Tung administration. The government has been more equivocal about what it regards
as satisfactory solutions to community problems.

In this respect, the Tsang administration has made some progress. There have been
some improvements in civic engagement on individual policies.21 The difficulty is that
there is no single recipe that is likely to work in all cases. The annual policy address was
once seen as an authoritative document outlining policies which the government would
formulate and implement. Increasingly, it has become a starting point for negotiations
with civil society where the politics of each separate issue has to be taken into account
if success is to be achieved. So there is a need for the government to build in specific
implementation strategies which take account of the positions of the major stakeholders.
On narrowly-focused policies, civic engagement may well produce a modus vivendi for
successful implementation. On more complex issues, such as healthcare financing, the
outcome affects the entire community, many of whom are opposed to the governments
proposals. In those cases, civic engagement may help to clarify points of difference but
it is unlikely to facilitate agreement on the way forward.

Civic engagement is a supplement to political representation and not a substitute
for it.22 If the system does not allow for the aggregation of demands into policies that
can be formulated and implemented, then civic engagement may help to alleviate that
problem but it will not entirely resolve it. Civic engagement as a strategy also suffers
from two other problems. First, the governments willingness to engage with civic groups
is not standard practice; it engages on some issues but not on others. There needs to be
a more formal requirement that policy-makers pay attention to stakeholders as a matter
of course. Second, civic engagement may, in some instances, simply result in delaying
a decision on what could conceivably be a pressing issue. Deadlines need to be set to
ensure that decisions are reached within a reasonable time-frame.
Government and the People

The government seeks to improve its relationship with the people through civic
engagement, the development of a more responsive civil service and an effective redress
system. These institutions, procedures and mechanisms are especially important because
of the deficiencies in the constitutional arrangements and the extent of the legitimacy
deficit. The major institutions do not provide adequately for the representation of
individual interests through Legislative Councillors or for collective interests expressed
in the form of the policy platforms of political parties. Because Legislative Councillors
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do not represent their constituents directly but rather are one among many Councillors
representing a district, it is often easier and more effective for those with grievances to use
the redress institutions. Because political parties cannot win office, their policy platforms
lack credibility and elections often centre on personalities rather than issues.

In this context, the role played by civil society and by the redress institutions in
ensuring that voice is given to public opinion and that instances of arbitrary administrative
action are addressed is important in reducing the legitimacy deficit. Informal channels
for the expression of the views of civil society organisations consequently need to be
protected and strengthened. The media provides one avenue through which those views
may be conveyed but there is also a need to ensure that government hears their message,
a point which Tsang stressed in his 2008 policy address.23 Although the organisations
dealing with rights, complaints and redress have generally functioned well, there are
weaknesses that need to be addressed, such as the development of a proper complainthandling system for medical patients, a review of the work of administrative tribunals
to ensure that their practices conform with natural justice, and a greater willingness on
the part of government to be proactive in the protection of the rights of citizens.

In a non-democratic system, the way in which the executive and legislature deal
with public opinion is critical for the formulation of policy responses and for taking
administrative action to remedy grievances. Both the government and the legislature
collect a good deal of information through responses to consultation documents, meetings
with concerned groups and from submissions by individuals and groups on current
policy issues. On some matters, the executive and the legislature co-operate in arriving
at solutions but, on others, the government seems to rely solely on its own view of the
state of public opinion. Establishing accountability to the people in a non-democratic
system is not the easiest of tasks. But if it is ever to be achieved, it does require taking
public opinion into account. Legislative Councillors, with an ear to the views of their
constituents, are perhaps best placed to provide government with that information.
Whether there are enough formal and informal channels between executive and
legislature to convey those views and whether the government pays sufficient attention
to them is a moot point. What is certain is that executive-led government, unqualified
by serious attention to public opinion, carries with it the danger of inappropriate policymaking, sometimes with disastrous results.

In summary, the following reforms would help improve the accountability of the
Hong Kong government and increase its administrative and policy-making capacities:
as a convention of the constitution, Directors of Bureaus and all other political
appointees should resign if the Legislative Council passes a motion of no confidence
in their performance;
the Legislative Council should increase its oversight of fully-funded public sector
organisations beyond the civil service;
the number of Legislative Councillors should be increased for the 2012 elections;
there should be a re-assertion of the public service ethos through the Civil Service
Code and the ICACs integrity management programmes;
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the Standing Commission on Civil Service Salaries and Conditions of Service

should ensure that raising grade entry point levels does not financially or in any
other way disadvantage currently-employed civil servants and compensation should
be provided for those who have been disadvantaged in this way in the past;
the Standing Commission on Civil Service Salaries and Conditions of Service and
the Public Service Commission should ensure that the principle of equal work for
equal pay is more uniformly observed;
civic engagement should be institutionalised as part of the policy process;
the channels through which the views of civil society organisations are conveyed to
government should be examined with the aim of formalising those channels, where
feasible, and of ensuring that coverage of public opinion is as comprehensive as
possible;
the procedures of administrative tribunals should be reviewed to ensure that they
are in accord with the principle of natural justice.
These measures would help to improve governance and reduce the legitimacy deficit. But
they would not entirely resolve the legitimacy problem. The constitutional arrangements
and the way in which they affect institutional relationships remain the single greatest
barrier to better policy-making and administrative performance. Until the political
relationship between the people and its government is addressed through constitutional
reform and until there is evidence that the problems of consent and of legal and moral
authority have been accommodated within a political framework in which executive
authority is properly accountable, the government will continue to be constrained in its
ability to deal quickly and effectively with pressing policy issues.
ch.12(p.289-306).indd 306
11/4/09 4:25:46 PM
Notes
Chapter 1
1. This definition is a conventional one which lays stress on the funding of public sector
organisations through taxation. In Hong Kong, the sale of Crown land, all of which is
owned by the government, has been an important source of revenue and the definition
has been amended accordingly. On definitions of the public sector, see Kai Wegrich,
Public Sector in Encyclopedia of Governance, ed. Mark Bevir, Vol II (California:
Sage 2007), 776777 and the discussion in Jan-Erik Lane, The Public Sector: Concepts
and Approaches (London: Sage, 2000).
2. The government web-site, www.gov.hk, lists 60 departments and agencies but includes
the Audit Commission, the Independent Commission Against Corruption, The Office of
the Ombudsman and the University Grants Committee and some advisory committees,
which, strictly speaking, are not departments but what the government calls related
organisations. If a department is defined as an agency which has executive powers, the
number of departments is smaller. See also Chapter 4.
3. Civil Service Bureau, Civil Service Personnel Statistics 2008 (Hong Kong: Civil
Service Bureau, 2008), Table 1.1. The figures are for the number of people actually in
position (the strength) rather for the establishment which is slightly higher.
4. Calculated from Independent Commission Against Corruption, Annual Report 2007,
www.icac.org.hk, Appendix 1.
5. It is difficult to estimate the exact numbers employed in the public sector outside the
civil service. If the criterion that defines the public sector organisation is the subsidy
that it receives from government, then it would be necessary to determine for each
organisation how much of the subsidy is spent on staff and how much comes from fees
and charges levied by the organisation itself.
6. A.B.L. Cheung, Public Sector Reform and the Re-legitimation of Public Bureaucratic
Power: The Case of Hong Kong, International Journal of Public Sector Management
9(56) (1996), 3750; Ian Scott, Organisations in the Public Sector in Hong Kong:
Core Government, Quasi-Government and Private Bodies with Public Functions,
Public Organisation Review 3(3) (September 2003), 247267.
7. The Commission appointed to investigate the claim that the government infringed
academic autonomy at the Hong Kong Institute of Education found that the government
had the right to encourage, steer or direct tertiary institutions but that it should use
proper channels. The government then asked for a judicial review of the finding. See
ch.13 Notes(p.307-359).indd 307
11/4/09 4:32:33 PM
308 Notes to pages 37
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Yeung Chun Kuen and Lee Jark Pui, Report of the Commission of Inquiry on Allegations
relating to the Hong Kong Institute of Education (Hong Kong: Government Logistics
Department, June 2007), 101. See also Chapter 3.
See Rikkie Yeung, Moving Millions: The Commercial Successes and Political
Controversies of Hong Kongs Railways (Hong Kong: Hong Kong University Press,
2008), Chapter 11, Epilogue.
Public goods and services are commonly defined as those goods and services which
are provided by governments because the market cannot allocate them efficiently. They
have the important characteristics that they are non-rivalrous, in the sense that more
than one person can derive benefits from [their] consumption when its supply does not
change, and non-excludable, in the sense that consumption does not preclude further
use by another person. See Karthik Srinivasan, Public Goods in Encyclopedia of
Governance, ed. Mark Bevir, Vol. II, op. cit., 765766.
Donald Tsang, Strong Governance for the People, www.policyaddress.gov.hk (2005),
para 71; Donald Tsang, Big market, small government key, www.3.news.gov.hk,
September 19, 2006.
Financial Secretary, The 200809 Budget (Hong Kong: Government Logistics
Department, 2008), Appendix B.
For a comparison of Hong Kongs public expenditure as a percentage of Gross Domestic
Product with that of other developed countries, see Wilson Wong and Sabrina Luk,
Economic Policy in Contemporary Hong Kong Politics: Governance in the Post1997 Era, eds. Lam Wai-man, Percy Luen-tim Lui, Wilson Wong and Ian Holliday
(Hong Kong: Hong Kong University Press, 2007), 187.
Quoted in Tsang, Big market, small government key, op. cit.
See Eliza W.Y. Lee, The Political Economy of Public Sector Reform in Hong Kong:
The Case of a Colonial-Developmental State, International Review of Administrative
Sciences 64(4) (1998), 625641; Ian Scott, Administration in a Small Capitalist State,
Public Administration and Development 9(2) (AprilMay, 1989), 185199.
To quote Miliband, it acts on behalf of capitalists but not necessarily at their behest.
Ralph Miliband, Marxism and Politics (Oxford: Oxford University Press, 1977), 74.
Joint Declaration of the Government of the United Kingdom of Great Britain and
Northern Ireland and the Government of the Peoples Republic of China on the Question
of Hong Kong (Hong Kong: Government Printer, 1984); The Basic Law of the Hong
Kong Special Administrative Region of the Peoples Republic of China (Hong Kong:
The Consultative Committee for the Basic Law, April 1990).
See Peter Wesley-Smith, Unequal Treaty: China, Great Britain and Hong Kongs New
Territories (Hong Kong: Oxford University Press, 1980), Chapter 5; Urban Council,
Annual Report 197879 (Hong Kong: Michael Stevenson, 1979), 56.
McKinsey and Company, The Machinery of Government: A New Framework for
Expanding Services (Hong Kong: mimeo, May 1973).
Ibid., 1417.
Civil Service Branch, Civil Service Personnel Statistics 1997 (Hong Kong: Civil
Service Branch, 1997), 12.
This was the rule-of-thumb adopted by government at the time. The precise numbers
were not known.
Public Service Commission, Annual Report 2000 (Hong Kong: Printing Department,
2001), 12.
ch.13 Notes(p.307-359).indd 308
11/4/09 4:32:33 PM
Notes to pages 711 309
23. See Ian Scott, Civil Service Neutrality in Hong Kong in Democratization and
Bureaucratic Neutrality, eds. Haile K. Asmeron and Elisa P. Reis (Basingstoke:
Macmillan, 1996), 277293.
24. Carol Jones, Politics Postponed: Law as a Substitute for Politics in Hong Kong and
China in Law, Capitalism and Power in Asia: The Rule of Law and Legal Institutions,
ed. K. Jayasuriya (London: Routledge, 1999), Chapter 3; Leo F. Goodstadt, Prospects
for the Rule of Law: The Political Dimensions in Judicial Independence and the Rule
of Law in Hong Kong, ed. Steve Tsang (Basingstoke: Palgrave, 2001), Chapter 8.
25. Ian McWalters, Bribery and Corruption Law in Hong Kong (Singapore: LexisNexis
Butterworths, 2003), 1619.
26. On the events preceding the establishment of the Independent Commission Against
Corruption, see H.J. Lethbridge, Hard Graft in Hong Kong: Scandal, Corruption
and the ICAC (Hong Kong: Oxford University Press, Hong Kong, 1985); Ian Scott,
Political Change and the Crisis of Legitimacy in Hong Kong (London: Hurst, 1989),
146152; T. Wing Lo, Corruption and Politics in Hong Kong and China (Buckingham:
Open University Press, 1993), 88108; Jon S.T. Quah, Curbing Corruption in Asia:
A Comparative Study of Six Countries (Singapore: Eastern Universities Press, 2003),
133143; Melanie Manion, Corruption by Design: Building Clean Government in
Mainland China and Hong Kong (Cambridge : Harvard University Press, 2004), 27
83.
27. Milton Friedman, Free to Choose (Harmondsworth: Penguin, 1980), 4749, 5455.
28. Ibid., 53.
29. Hong Kong Government, Hong Kong 1980 (Hong Kong: Government Printer, 1981),
91.
30. See, for example, Elizabeth Sinn, Power and Charity: The Early History of the Tung
Wah Hospital, Hong Kong (Hong Kong: Oxford University Press, 1989), 13.
31. See McKinsey and Company, op. cit.
32. District Commissioner, New Territories to Hon. Colonial Secretary, Ref (23) in
NT4811C, April 19, 1973.
33. G.B. Endacott, Government and People in Hong Kong 18411962 (Hong Kong: Hong
Kong University Press, 1964), 93.
34. H.J. Lethbridge, Hong Kong: Stability and Change (Hong Kong: Oxford University
Press, 1978), 117.
35. Hong Kong Government, Report on the Riots in Kowloon and Tsuen Wan October 10th
to 12th 1956 with Covering Despatch dated 23rd December 1956 from the Governor of
Hong Kong to the Secretary of State for the Colonies (mimeo, 1956), ii.
36. Commission of Inquiry, Kowloon Disturbances 1966: Report of the Commission of
Inquiry (Hong Kong: Government Printer, 1967).
37. See Norman Miners, The Government and Politics of Hong Kong, 1st Edition (Hong
Kong: Oxford University Press, 1975), viii.
35.
39. Anthony B.L. Cheung, Performance Pledges Power to the Consumer or a Quagmire
in Public Service Legitimation, International Journal of Public Administration 19(2)
(1996), 233260.
40. Hong Kong Government, Serving the Community (Hong Kong: Government Printer,
1995), 21.
41. Ibid., 2122.
ch.13 Notes(p.307-359).indd 309
11/4/09 4:32:34 PM
42. The Basic Law, op. cit., Article 100; Joint Declaration op. cit., Section IV.
43. Ian Scott, The Disarticulation of Hong Kongs Post-Handover Political System, The
China Journal No. 43 (January 2000), 2953.
44. Government of the HKSAR, CEs speech given at the Hong Kong Association, Press
Release, November 12, 2003; Y.C. Jao, The Asian Financial Crisis and the Ordeal of
Hong Kong (Westport, Conn.: Quorum Books, 2001), 4.
45. Government of the HKSAR, Hong Kong 2003 (Hong Kong: Printing Department,
2004), 99.
46. See Agnes S. Ku, The Public up against the State: Narrative Cracks and Credibility
Crisis in Postcolonial Hong Kong, Theory, Culture and Society 18 (1) (2001), 121
144.
47. The Basic Law, op. cit., Article 23.
48. Jimmy Lee and Claudia Mo, 500,000 march through the streets, SCMP, July 2, 2003;
see also Joseph Y.S. Cheng, ed., The July 1 Protest Rally: Interpreting a Historic Event
(Hong Kong: City University of Hong Kong Press, 2005), Chapters 1, 2.
49. Constitutional Affairs Bureau, Review of District Organisations: Consultation
Document (Hong Kong: Printing Department, June 1998), vivii.
50. The Basic Law, op. cit., Article 62.
51. See, for example, Jimmy Cheung, Civil service neutrality is a British thing: state
leader, SCMP, October 17, 2003.
52. Ian Scott, The Disarticulation of Hong Kongs Post-Handover Political System,
op. cit.
53. Civil Service Bureau, Civil Service Reform: Consultation Document: Civil Service into
the 21st Century (Hong Kong: Printing Department, March 1999).
54. See John P. Burns, Government Capacity and the Hong Kong Civil Service (Hong
Kong: Oxford University Press, 2004), 163, 166167.
55. Civil Service Branch (1997), op. cit., 16; Civil Service Bureau (2008), op. cit., 36.
56. Civil Service Branch (1997), op. cit., 12; Civil Service Bureau (2008), op. cit., Table
1.1.
57. Tsang, Strong Governance for the People, op. cit., para 5.
58. Ma Ngok, Political Development in Hong Kong (Hong Kong: Hong Kong University
Press, 2007), Appendix 5.
59. Advisory Committee on New Broad-Based Taxes, Final Report to the Financial
Secretary (Hong Kong: Printing Department, February, 2002), 27.
60. Constitutional Development Task Force, The Second Report of the Constitutional
Development Task Force: Issues of Principle in the Basic Law Relating to Constitutional
Development (April 2004), www.info.gov.hk/cab (April 2004), 3739; Chief Executive,
Report by the Chief Executive of the Hong Kong Special Administrative Region to the
Standing Committee of the National Peoples Congress on Whether there is a Need
to Amend the Methods of Selecting the Chief Executive of the Hong Kong Special
Administrative Region in 2007 and for Forming the Legislative Council of the Hong Kong
Special Administrative Region in 2008, www.info.gov.hk/ce/cdreport (April 2004).
61. Hansard, December 21, 2005, 33133559.
62. The Basic Law, op. cit., Articles 45, 68.
63. See Suzanne Pepper, Keeping Democracy at Bay: Hong Kong and the Challenge of
Chinese Political Reform (Lanham, MD: Rowan and Littlefield, 2008), 379380.
Pepper cautions that voters may not necessarily opt for democratic parties because they
are seeking to accelerate democratic development. See also Joseph Chan and Elaine
ch.13 Notes(p.307-359).indd 310
11/4/09 4:32:34 PM
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
Chan, Perceptions of Universal Suffrage and Functional Representation in Hong

Kong: A Confused Public? Asian Survey XLVI (2) (March/April 2006), 257274.
Chris Yeung, Anson Chan admits to risks in election debut, SCMP, October 2, 2007.
See www. elections.gov.hk/legco2007by (accessed December 15, 2007).
See www.elections.gov.hk (accessed October 15, 2008).
Government of the HKSAR, Green Paper on Constitutional Development (Hong Kong:
Government Logistics Department, July 2007).
Jimmy Cheung, Tsang targets 60pc for suffrage plan, SCMP, March 22, 2007.
Chief Executive, Report on Consultation on Green Paper on Constitutional Development
(Hong Kong: Government Logistics Department, December 2007), 62.
Chief Executive, Report by the Chief Executive of the Hong Kong Special Administrative
Region to the Standing Committee of the National Peoples Congress on the Public
Consultation on Constitutional Development and on Whether there is a Need to Amend
the Methods for Selecting the Chief Executive of the Hong Kong Special Administrative
Region and for Forming the Legislative Council of the Hong Kong Special Administrative
Region in 2012 (Hong Kong: Government Logistics Department, December 2007), 6.
Chief Executive, CEs statement on the decision by the Standing Committee of the
National Peoples Congress, Press Release, December 29, 2007.
Electoral Commission, Chief Executive Election, www.eac.gov.hk, 70. See also Sonny
Shiu-Hing Lo, The Dynamics of BeijingHong Kong Relations: A Model for Taiwan?
(Hong Kong: Hong Kong University Press, 2008), Chapter 8.
Constitutional Affairs Bureau, Adoption of the Principles of Universal Suffrage and
Balanced Participation in Some Democratic Countries, CSD/GC/W/1/2006. See also
Jimmy Cheung, Albert Ho warns over suffrage, SCMP, February 4, 2008.
Gary Cheung, Jurists leave no doubt: 2007 is out, SCMP, January 20, 2004.
Dagong Bao, Zhou Nan on the political review, January 30, 2004.
Qiao Xiaoyang, Striving in a pragmatic spirit to find the right path to political
development, SCMP, April 29, 2004. On the reasons given by the Chinese government
for refusing to extend the suffrage, see also Ming Pao, NPC rules out direct elections
for 2007, April 27, 2004.
Government of the HKSAR, Green Paper on Constitutional Development (Hong Kong:
Government Logistics Department, July 2007).
Chief Executive, CEs statement on the decision by the Standing Committee of the
National Peoples Congress, op. cit.
Ibid.
Ian Thynne and John Goldring, Accountability and Control: Government Officials and
the Exercise of Power (Sydney: Law Book Company, 1987), 11.
Ibid., 79; Mark Bovens, The Quest for Responsibility: Accountability and Citizenship
in Complex Organisations (Cambridge: Cambridge University Press, 1998), 2628.
Thynne and Goldring, op. cit., 6.
Kenneth F. Warren, Administrative Law in the Political System, 3rd edition (New Jersey:
Prentice Hall, 1996), 155157.
Albert H.Y. Chen, An Introduction to the Legal System of the Peoples Republic of
China (Hong Kong: Butterworth, 1992), 40.
For discussions of accountability in the Hong Kong context, see Burns, op. cit., Chapter
5; Kit Poon, The Political Future of Hong Kong: Democracy within Communist China
(London: Routledge, 2008), Chapter 6.
ch.13 Notes(p.307-359).indd 311
11/4/09 4:32:34 PM
86. Anthony Cheung, Policy Capacity in Post-1997 Hong Kong: Constrained Institutions
Facing a Crowded and Differentiated Polity, The Asia Pacific Journal of Public
Administration 29(1) (June 2007), 5175.
87. Stephen Brown et al., The Budget and Public Finance in Hong Kong (Hong Kong:
Civic Exchange, 2003), 16.
88. See Gavin Ure, The Origins of the Hong Kong Governments Autonomy 1918 to 1955
(Unpublished Ph.D. dissertation, Perth: Murdoch University, 2007), 332333.
89. Ian Scott, Legitimacy, Governance and Public Policy in Post-Handover Hong Kong,
The Asia Pacific Journal of Public Administration 29(1) (June 2007), 2949.
90. David Beetham, The Legitimation of Power (Basingstoke: Macmillan, 1991), 1519.
See also Ian Scott, Legitimacy and Its Discontents: Hong Kong and the Reversion
to Chinese Sovereignty, Asian Journal of Political Science 1(1) (June 1993), 5575;
Muthiah Alagappa, ed., Political Legitimacy in Southeast Asia: The Quest for Moral
Authority (Stanford: Stanford University Press, 1995), 1424.
Chapter 2
1. Yash Ghai, The Legal Foundations of Hong Kongs Autonomy: Building on Sand,
The Asia Pacific Journal of Public Administration 29(1) (June 2007), 11.
2. For a further exploration of the unique features of the one country two systems model
on which the Basic Law is based, see Peter T.Y. Cheung, Towards Federalism in China?
The Experience of the Hong Kong Special Administrative Region in Federalism in
Asia, eds. Baogang He, Brian Galligan and Takashi Inoguchi (Cheltenham: Edward
Elgar, 2007).
3. Ian Thynne, Autonomy and Integration in Institutional Change and the Political
Transition in Hong Kong, ed. Ian Scott (Basingstoke: Macmillan, 1998), 238.
4. Xu Jiatun, Xu Jiatun Xianggang Hu Yi Lu [The Hong Kong Memoirs of Xu Jiatun] Vol.
2 (Hong Kong: United Daily News, 1993), 183.
5. On functional constituencies, see Christine Loh and Civic Exchange, eds., Functional
Constituencies: A Unique Feature of the Hong Kong Legislative Council (Hong Kong:
Hong Kong University Press, 2006).
6. Joint Declaration of the Government of the United Kingdom of Great Britain and
of Hong Kong (Hong Kong: Government Printer, 1984).
7. Ibid., Annex V, 1.
8. See Ming K. Chan and David J. Clark, The Hong Kong Basic Law: Blueprint for
Stability and Prosperity under Chinese Sovereignty? (Hong Kong: Hong Kong
University Press, 1991), 78; Emily Lau, The Early History of the Drafting Process
in The Basic Law and the Hong Kongs Future, eds. Peter Wesley-Smith and Albert
Chen (Hong Kong: Butterworth, 1988), 101104; Karen Tang Shuk Ta, An Analysis
of the Basic Law Drafting and Consultative Process (Unpublished MPA dissertation,
Hong Kong: University of Hong Kong, 1990), 8991.
9. The Basic Law of the Hong Kong Special Administrative Region of the Peoples
Republic of China (Hong Kong: The Consultative Committee for the Basic Law, April
1990), Annex 1.
10. Hansard, May 21, 2003, 66996762.
11. The Article 45 Concern group was formed in November 2006 and was dissolved on the
creation of the Civic Party in March 2006.
ch.13 Notes(p.307-359).indd 312
11/4/09 4:32:34 PM
12. The text of the Standing Committees decision is reproduced in the SCMP, Full text of
the Standing Committees decision, April 27, 2004. For an explanation of the Chinese
governments position on progress towards universal suffrage, see Wang Zhemin, The
Significance of Chinas Decision on Universal Suffrage, The Hong Kong Journal No.
10, www.hkjournal.org (April 2008).
14. See Sonny Shiu-Hing Lo, The Dynamics of BeijingHong Kong Relations: A Model for
Taiwan? (Hong Kong: Hong Kong University Press, 2008), Chapter 8.
15. Chief Executive, CEs statement on the decision by the Standing Committee of the
16. Benny Y.T. Tai, The Development of Constitutionalism in Hong Kong in The New
Legal Order in Hong Kong, ed. Raymond Wacks (Hong Kong: Hong Kong University
Press, 1999), 39.
17. Hansard, July 11, 2001, 7535.
18. Chief Executive Election Ordinance, Cap 569, Clause 4c.
19. On the electoral system, see Ma Ngok, Political Parties and Elections in Contemporary
Hong Kong Politics: Governance in the Post-1997 Era, eds. Lam Wai-man, Percy
Luen-tim Lui, Wilson Wong and Ian Holliday (Hong Kong: Hong Kong University
Press, 2007).
20. Preliminary Working Committee, Some Views of the Preliminary Working Committee
of the HKSAR Preparatory Committee on Maintaining the Stability of the Hong Kong
Civil Service and Its System (Hong Kong: mimeo, December 8, 1995).
21. Ibid.
22. On the conditions for the legitimate exercise of power, see David Beetham, The
Legitimation of Power (Basingstoke: Macmillan, 1991), 1519.
23. Qiao Xiaoyang, Striving in a pragmatic spirit to find the right path to political
development, SCMP, April 29, 2004.
24. See Ma Ngok, The Political Development of Hong Kong (Hong Kong: Hong Kong
University Press, 2007), Chapters 5, 6.
25. Ian Scott, The Disarticulation of Hong Kongs Post-Handover Political System, The
China Journal No. 43 (January 2000), 2953.
26. Lau Siu-kai and Kuan Hsin-chi, Hong Kongs Stunted Party System, The China
Quarterly No. 172 (December 2002), 10201028; see also Lau Siu-kai and Kuan Hsinchi, Partial Democratization, Foundation Moment and Political Parties in Hong
Kong, The China Quarterly No. 163 (September 2000), 705720.
27. See Constitutional Development Task Force, The Second Report of the Constitutional
Development Task Force: Issues of the Legislative Process in the Basic Law (April
2004), www.info.gov.hk/cab, 20.
28. Yash Ghai, Hong Kongs New Constitutional Order: The Resumption of Chinese
Sovereignty and the Basic Law, 2nd edition (Hong Kong: Hong Kong University Press,
1999), 293295.
29. Chloe Lai, Carrie Chan and Ambrose Leung, Legislators change of heart on the
harbour, SCMP, October 8, 2003.
30. M. Alagappa, Political Legitimacy in Southeast Asia: The Quest for Moral Authority
(Stanford: Stanford University Press, 1995), 46.
31. Court of Final Appeal, Final Appeal No 14 of 1998 (Civil) (Ng Ka Ling v Director of
Immigration) 1 HKC 291 (January 29, 1999).
32. Ibid.
ch.13 Notes(p.307-359).indd 313
11/4/09 4:32:34 PM
33. Xiao Weiyun and others, Why the Court of Final Appeal Was Wrong: Comments of
the Mainland Scholars on the Judgment of the Court of Final Appeal in Hong Kongs
Constitutional Debate: Conflict over Interpretation, eds. Johannes M.M. Chan, H.L. Fu
and Yash Ghai (Hong Kong: Hong Kong University Press, 2000), 6468.
34. SCMP, Judges say they never intended to question NPC, Internet edition, February
26, 1999.
35. Government of the HKSAR, Speech by Secretary for Security, Press Release, May
19, 1999; No Kwai-yan, Basic Law amendment not answer on abode, SCMP, May
1, 1999.
36. The last abode seekers lost their appeal in March 2008. See Nick Gentle, Last 14
abode seekers left in limbo by Beijing lose appeals, SCMP, March 19, 2008.
37. Chris Yeung, NPC lays down the law, Sunday Morning Post, June 27, 1999.
38. Stephen Lam, Abode rulings prove autonomy is safe and sound, SCMP, January 16,
2002.
39. Albert H.Y. Chen, The Constitution and the Rule of Law in The First Tung Chee-hwa
Administration, ed. Lau Siu-kai (Hong Kong: Chinese University Press, 2002), 8485.
40. Alan Leong, Does the system protect our rights as before? Not as much, SCMP,
January 14, 2003; Sunday Morning Post, Much more than an interpretation is at stake,
editorial, June 27, 1999.
41. See, for example, documents on the public debate over the right of abode in Chan, Fu
and Ghai (2000), op. cit., Part II; Byron Weng, Judicial Independence under the Basic
Law in Judicial Independence and the Rule of Law in Hong Kong, ed. Steve Tsang
(Basingstoke: Palgrave, 2001).
42. Security Bureau, Proposals to Implement Article 23 of the Basic Law: Consultation
Document (Hong Kong: Printing Department, 2002).
43. Chris Yeung, Anti-sedition laws finally unveiled, SCMP, September 25, 2002.
44. Draft Committee for the Basic Law, The Draft Basic Law of the Hong Kong Special
Administrative Region of the Peoples Republic of China (For Solicitation of Opinions)
(Hong Kong: The Committee, April 1988), Article 22.
45. Secretariat of the BLDC of the Hong Kong SAR of the PRC, The Draft Basic Law of
the Hong Kong SAR of the PRC (Hong Kong: mimeo, January 18, 1989).
46. H. Fu, The National Security Factor: Putting Article 23 of the Basic Law in Perspective
in Tsang, op. cit., 78.
47. Ibid., 79.
48. Security Bureau, op. cit., 10.
49. Ibid., 37.
50. Ibid., 30.
51. Hong Kong Bar Association, Response to the Consultation Document on the Proposals
to Implement Article 23 of the Basic Law, www.hkba.org (2002).
52. Philip Segal, Business: The Biggest Victim, Far Eastern Economic Review, December
19, 2002, 3034.
53. Hong Kong Bar Association, op. cit.; Anson Chan, Hong Kong needs a new consensus,
SCMP, October 3, 2002; Martin Lee, Officials must reveal true colour of Article 23,
SCMP, October 1, 2002.
54. Ibid.; Angela Li and Ambrose Leung, Article 23 White Bill considered pointless,
SCMP, October 6, 2002.
55. May Sin-mi Hon and Angela Li, Most back security law, says Regina Ip, SCMP,
October 29, 2002.
ch.13 Notes(p.307-359).indd 314
11/4/09 4:32:35 PM
56. Christine Loh, Hitler comments undermine democracy, SCMP, November 1, 2002.
57. Government of the HKSAR, Chief Executives statement about Falun Gong, Press
Release, February 8, 2001.
58. Hong Kong Bar Association, op. cit.
59. May Sin-mi Hon, Will it or wont it breach the rules? SCMP, September 25, 2002.
60. See Richard Cullen, Freedom of the Press and the Rule of Law in Hong Kong in
Tsang, op. cit., 159, 175 note 10; Margaret Ng, Government sharpens its knives against
the media, SCMP, October 23, 2002.
61. Bob Allcock, No change in freedom of speech, SCMP, September 30, 2002.
62. Margaret Ng, op. cit. See also Ma Ngok, State-Press Relationship in Post-1997 Hong
Kong: Constant Negotiation amidst Self-Restraint, The China Quarterly No. 192
(December 2007), 949970.
63. See www.basiclaw23.gov.hk (accessed May 20, 2003).
64. Ibid.
65. Ibid.
66. Hong Kong Transition Project, Accountability & Article 23: Freedom, Fairness and
Accountability in Hong Kong (Hong Kong: The Project, December 2002), 57.
67. Ravina Shamdasani and Quinton Chan, Fears over analysis of security law views,
SCMP, January 13, 2003.
68. Legislative Council, Legislative Council Brief: National Security (Legislative
Provisions) Bill (Hong Kong: mimeo, February 13, 2003).
69. Government of the HKSAR, Secretary of Security speaks in Legco, Press Release,
February 12, 2003.
70. Ibid.
71. Legislative Council (2003), op. cit.
72. Article 23 Concern Group, Why the Blue Bill on National Security (Legislative
Provisions) is not Good Enough (Hong Kong: The Group, April 2003); Klaudia Lee,
Most people oppose security bill, SCMP, June 28, 2003.
73. Government of the HKSAR, Government announces draft amendments to the National
Security (Legislative Provisions) Bill, Press Release, June 3, 2003.
74. Government of the HKSAR, Speech by Deputy Solicitor General (Constitutional),
Press Release, June 14, 2003.
75. SCMP, Scrutiny of Bill makes a mockery of the system, editorial, June 16, 2003.
76. Klaudia Lee (2003), op. cit.
77. Jimmy Cheung and Klaudia Lee, 500000 march through the streets, SCMP, July 2,
2003.
78. Government of the HKSAR, Chief Executives transcript on the Basic Law Article
23, Press Release, July 5, 2003.
79. Jimmy Cheung, James Tien quits over Article 23, SCMP, July 2, 2003.
80. Government of the HKSAR, Statement by CE, Press Release, July 7, 2003.
81. Government of the HKSAR, Statement by Secretary of Security, Press Release, July
16, 2003.
82. Jimmy Cheung, Tung opens door to change, SCMP, July 18, 2003.
83. Catherine Armitage, Beijing puts Hong Kong on notice, The Australian, July 21,
2003.
84. Matt Pottinger, How Pro-Beijing Politician Made Hong Kong Retreat, The Asian
Wall Street Journal, September 8, 2003.
85. Jimmy Cheung, Klaudia Lee and J. Ma, Tung shelves Article 23 legislation, SCMP,
September 6, 2003.
ch.13 Notes(p.307-359).indd 315
11/4/09 4:32:35 PM
86. J. Ma, DAB wins praise from Vice-President, Sunday Morning Post, September 7,
2003.
87. Lau Nai-keung, Still the mainlands man, still with legitimacy problem, SCMP, July
21, 2003.
88. See Joseph Y.S. Cheng, Introduction: Causes and Implications of the July 1 Protest
Rally in Hong Kong in The July 1 Protest Rally: Interpreting a Historic Event, ed.
Joseph Y.S. Cheng (Hong Kong: City University of Hong Kong Press, 2005).
89. Polly Hui, Judicial review legal aid bids on the rise, SCMP, March 3, 2008.
90. Ibid.
91. Peter Po Fun Chan v Winnie C.W. Cheung and Another, FACV10/2007, www.legalref.
judiciary.gov.hk.
92. HKSAR v Ma Wai Kwan and Others, CAQL1/1997, www.legalref.judiciary.gov.hk.
93. The Association of Expatriate Civil Servants v The Chief Executive of HKSAR, HCAL
90/1997, www.legalref.judiciary.gov.hk.
94. Chan Shu Ying v The Chief Executive of the Hong Kong Special Administrative Region,
HCAL151/1999, www.legalref.judiciary.gov.hk.
95. Town Planning Board v Society for the Protection of the Harbour, FACV14/2003,
www.legalref.judiciary.gov.hk.
96. Catholic Diocese of Hong Kong v Secretary for Justice, HCAL157/2005, www.legalref.
judiciary.gov.hk.
97. Leung TC William Roy v Secretary for Justice, HCAL160/2004, www.legalref.judiciary.
gov.hk
98. Leung Kwok Hung and Another v Chief Executive of the HKSAR, CACV73/2006, www.
legalref.judiciary.gov.hk.
99. Secretary for Justice v Ocean Technology Limited and Others, HCA 70/2008, www.
legalref.judiciary.gov.hk.
Chapter 3
1. John P. Burns, Government Capacity and the Hong Kong Civil Service (Hong Kong:
Oxford University Press, 2004), 157158.
2. Norman Miners, The Government and Politics of Hong Kong, 5th edition (Hong Kong:
Kong: Oxford University Press, 1991), 160163.
3. Constitutional Affairs Bureau, Review of District Organisations: Consultation
Document. (Hong Kong: Printing Department, June 1998), 1112.
4. Tung Chee-hwa, Building Hong Kong for a New Era (Hong Kong: Printing Department,
1997), 4950.
5. Constitutional Affairs Bureau (1998), op. cit., vivii.
6. Ibid., 3337.
7. Hansard, July 29, 1998, 1199.
8. Constitutional Affairs Bureau, Review of District Organisations: Consultation Report
(Hong Kong: Printing Department, October 1998), v, 43.
9. Ibid., 23.
10. Ibid.
11. Ibid.
12. Hansard, July 29, 1998, 1204.
13. Jimmy Cheung, Democrats in battle to head councils, SCMP, December 10, 2003.
14. Tung Chee-hwa, Serving the Community, Sharing Common Goals (Hong Kong: Printing
Department, 2000), 38.
ch.13 Notes(p.307-359).indd 316
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15. Burns, op. cit., 161167. See also Christine Loh, Accountability without Democracy?
The Principal Officials Accountability System in Hong Kong (Hong Kong: Civic
Exchange, 2002); Cheung Chor-yung, The Quest for Good Governance: Hong Kongs
Principal Officials Accountability System, China: An International Journal 1(2)
(2003), 249272.
16. Constitutional Affairs Bureau, Legislative Council Paper: Accountability System for
Principal Officials (Hong Kong: The Bureau, April 17, 2002), 6. In 2002, the Director
of the Chief Executives Office also became a Principal Official. The Directors
conditions of service were aligned with those of Directors of Bureaus in July 2007. See
Constitutional and Mainland Affairs Bureau, Report on the Further Development of the
Political Appointment System, www.cmab.gov.hk (October 2007), 43. The position is
not mentioned in the Basic Law but the government presumably would argue that it can
create new Principal Official positions under the category Directors of Bureaux in
Article 48(5) without the need to amend the law.
17. Tung Chee-hwa, Building on Our Strengths, Investing in our Future (Hong Kong:
Printing Department, 2001), 3536.
18. Constitutional Affairs Bureau (2002), op. cit.
19. Ibid., 5.
20. Hansard, April 17, 2002, 5499. The Legislative Council has occasionally passed a
motion condemning the actions of a Principal Official and has also sometimes defeated
the government on critical policy issues. But this has not prompted resignations. See
Hansard, February 2, 2005, 43924466.
21. Constitutional Affairs Bureau (2002), op. cit., 6.
22. Ibid., 11.
23. Secretary for the Civil Service, SCS writes to colleagues on Accountability System,
Press Release, April 18, 2002.
24. Emily Lau, So, just what is the point of Exco? SCMP, September 10, 2003.
25. Government of the HKSAR, New team of Principal Officials appointed, Press
Release, June 24, 2002.
26. Secretary for the Civil Service (2002), op. cit.
27. Robert G. Kotewall and Gordon C.K. Kwong, Report of the Panel of Inquiry on the
Penny Stocks Incident (Hong Kong: Printing Department, 2002), 100.
28. Ibid., 158161.
29. Ibid., 153.
30. Ibid., 158159.
31. Legislative Council, Panel on Financial Affairs, Minutes of a Special Meeting held on
31st July 2002 (Hong Kong: mimeo, 2002).
32. Kotewall and Kwong, op. cit., 110.
33. Legislative Council, Panel on Financial Affairs, op. cit., 8, 14, 17.
34. Ibid., 8.
35. Secretary for Constitutional Affairs, Twelve Month Report on Implementation of the
Accountability System for Principal Officials (Hong Kong: mimeo, 2003), 18.
36. Kotewall and Kwong, op. cit., 169.
37. Angela Li and Ambrose Leung, Whitewash attacked by all sides, SCMP, September
11, 2002.
38. Ambrose Leung and Jimmy Cheung, Reports on car purchase made public, SCMP,
March 22, 2003.
39. Tung Chee-hwa, Letter to Antony Leung Kam-chung, www.info.gov.hk/ce, March
25, 2003.
ch.13 Notes(p.307-359).indd 317
11/4/09 4:32:35 PM
40. Jimmy Cheung and Gary Cheung, Tung admonishes his finance chief, SCMP, March
11, 2003.
41. Legislative Council, Panel on Constitutional Affairs, Minutes of a Meeting held on 17th
March (Hong Kong: mimeo, 2003) (translated from Chinese).
42. Ibid., 1.
43. Ibid., 345; Hansard, April 9, 2003, 55295593.
44. Government of the HKSAR, DPP decides not to prosecute Antony Leung, Press
Release, December 15, 2003.
45. Ambrose Leung and Quinton Chan, Civil Service chief asked to explain retirement,
SCMP, November 1, 2003.
46. Constitutional Affairs Bureau (2002), op. cit., 10.
47. Leung and Chan, op. cit.
48. Constitutional and Mainland Affairs Bureau (October 2007), op. cit., 40.
49. SARS Expert Committee, SARS in Hong Kong: From Experience to Action: Report of
the SARS Expert Committee (Hong Kong: Information Services Department, 2003),
159.
50. Ibid.
51. Hospital Authority Review Panel, Report of the Hospital Authority Review Panel on the
SARS Outbreak (Hong Kong: The Authority, September 2003), 20, 147, 158.
52. Legislative Council, House Committee, Minutes of a Meeting held on 10th October
2003 (Hong Kong: mimeo, 2003), 10; Chris Yeung, A question of accountability,
SCMP, June 27, 2003.
53. Jimmy Cheung and Mary Ann Benitez, Legislators unanimous on holding SARS
probe, SCMP, October 11, 2003. See also Mark Richard Hayllar, Governance and
Community Engagement in Managing SARS in Hong Kong, Asian Journal of Political
Science 15 (1) (April 2007), 3947.
54. Legislative Council, House Committee (October 10, 2003), op. cit., 10.
55. Legislative Council, House Committee, Minutes of a Meeting held on 17th October
2003 (Hong Kong: mimeo, 2003), 11.
56. Legislative Council, Report of the Select Committee into the Handling of the Severe
Acute Respiratory Syndrome Outbreak by the Government and the Hospital Authority,
www.legco.gov.hk (July 2004), 251252.
57. Mary Ann Benitez et al., Officials accept responsibility over SARS but wont step
down, SCMP, July 6, 2004.
58. Mary Ann Benitez and Klaudia Lee, Dedicated Yeoh quits over SARS, SCMP, July
8, 2004.
59. Hansard, March 16, 2005, 5621.
61. Chief Executive, Responsibilities of the Financial Secretary and the Secretary for
Financial Services and the Treasury, www.info.gov.hk/fstb/fsb/prr/report (June 2003).
62. Donald Tsang, Strong Governance for the People (Hong Kong: Logistics Department,
2005), para 89.
63. CE thanks outgoing principal officials, www.news.gov.hk, June 28, 2007.
64. Three officials named to new posts, www.news.gov.hk, January 24, 2006.
65. Ibid.; Government of the HKSAR, CEs remarks on the appointment of Principal
Officials of the Third Term of the HKSAR Government, Press Release, June 23,
2007.
ch.13 Notes(p.307-359).indd 318
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66. Ibid.
67. Yeung Chun Kuen and Lee Jark Pui, Report of the Commission of Inquiry on Allegations
relating to The Hong Kong Institute of Education, www.gov.hk, 112.
68. Ibid., 113.
69. Ibid., 86, 99.
70. Ibid., 1.
71. Ibid.
72. Ibid.
73. Chief Executive, CE speaks on the report submitted by the Commission of Inquiry on
Allegations relating to The Hong Kong Institute of Education, Press Release, July 20,
2007.
74. Ibid.
75. Education Bureau, Education Bureau launches judicial review, Press Release,
September 17, 2007.
76. Government of the HKSAR, CE issues statement, Press Release, June 16, 2003.
77. Chief Executive (July 20, 2007), op. cit.
78. Stephen Vines, Accountability is not just for the little people, SCMP, February 22,
2008.
79. Donald Tsang, Strong Governance for the People, www.policyaddress.gov.hk, (October
2005), para 25.
80. Constitutional Affairs Bureau, Consultation Document on Further Development of the
Political Appointments System, www.cmab.gov.hk (July 2006), 1516.
81. Ibid., 2829. The rank title is Deputy Director of Bureau. The position title is Under
Secretary.
82. Ibid., 30.
83. Constitutional and Mainland Affairs Bureau (October 2007), op. cit.
84. Ibid., 14.
85. Ibid., 14, 15.
86. Ibid., 46.
87. Ambrose Leung and Fanny W.Y. Fung, Tsang names eight deputy ministers, SCMP,
May 21, 2008.
88. Eva Wu and Ambrose Leung, Anson Chan attacks new appointments, SCMP, May
22, 2008; Chris Yeung, Running the show, SCMP, May 30, 2008.
89. Constitutional and Mainland Affairs Bureau (October 2007), op. cit., 44; Chris Yeung,
Fresh faces get a harsh dose of political reality, SCMP, May 30, 2008.
90. Eva Wu and Fanny W.Y. Fung, Come clean on aides pay, say parties, SCMP, May
31, 2008.
91. Government of the HKSAR, Under secretaries recruitment lawful: CE, www.news.
gov.hk, May 31, 2008.
92. Mary Ma, Storms in a tea-cup, The Standard, June 6, 2008.
93. Ambrose Leung, Albert Wong and Eva Wu, New team nationality row
underestimated, SCMP, June 6, 2008.
94. Ibid.
95. Burns, op. cit., 157158; Governance Reform Group, How to Take Accountability
Reform Forward? Accountability to Whom and How? (Hong Kong: Synergynet,
2002), 8.
96. Constitutional Affairs Bureau (July 2006), 34.
ch.13 Notes(p.307-359).indd 319
11/4/09 4:32:36 PM
97. Secretary for Constitutional Affairs (2003), op. cit.; Constitutional Affairs Bureau (July
2006), op. cit., Chapter 1; Constitutional and Mainland Affairs Bureau (October 2007),
op. cit., Chapter 2.
98. Ibid., 6.
99. Hansard, April 17, 2002, 54935494.
100. Constitutional and Mainland Affairs Bureau (October 2007), op. cit., 6.
Chapter 4
1. See Ho Pui-yin, The Administrative History of the Hong Kong Government Agencies
18412002 (Hong Hong: Hong Kong University Press, 2004).
2. John P. Burns, Civil Service Reform in the HKSAR in The First Tung Chee-hwa
Administration, ed. Lau Siu-kai (Hong Kong: Chinese University Press, 2002), 278
280; John P. Burns, Government Capacity and the Hong Kong Civil Service (Hong
Kong: Oxford University Press, 2004), 105108.
3. Sir Philip Haddon-Cave, The Making of Some Aspects of Public Policy in Hong
Kong in The Business Environment in Hong Kong, 2nd edition, ed. David Lethbridge
(Hong Kong: Oxford University Press, 1984); Chief Secretary, The Hong Kong
Government Serving the Community, Briefing to Legislative Council Members (Hong
Kong: Government Printer, February 10, 1995), 3; Finance Branch, Practitioners
Guide: Management of Public Finances (Hong Kong: Government Printer, 1995), 31;
Donald Tsang, Strong Governance for the People (Hong Kong: Government Logistics
Department 2005), para 72.
1995), 29; Chief Secretary, op. cit., 3.
5. Terry Lui Ting, Changing Civil Servants Values in The Hong Kong Civil Service
and Its Future, eds. Ian Scott and John P. Burns (Hong Kong: Oxford University Press,
1988), 139140; Chris Patten, Hong Kong: Transition (Hong Kong: Government
Printer, 1996), 29; Ahmed Shafiqul Huque, Grace O.M. Lee and Anthony B.L.
Cheung, The Civil Service in Hong Kong: Continuity and Change (Hong Kong: Hong
Kong University Press, 1998), 25; Anson Chan, Speech by the Chief Secretary of
Administration at an Asia Society luncheon, Press Release, April 19, 2001.
6. Independent Commission Against Corruption, Support Clean Government: Handbook
for Managers (Hong Kong: Government Printer, 1996), passim; Chan, op. cit.
7. G.B. Endacott, An Eastern Entrepot: A Collection of Documents Illustrating the History
of Hong Kong (London: HMSO, 1964), 255259. See also Ho Pui-yin, op. cit.
8. Sir Charles Collins, Public Administration in Hong Kong (London: Royal Institute of
International Affairs, 1952), 51.
9. Norman Miners, The Localization of the Hong Kong Police Force, 18411947,
Journal of Imperial and Commonwealth History 18(3) (1990), 298315.
10. Steve Tsang, Governing Hong Kong: Administrative Officers from the Nineteenth
Century to the Handover to China, 18621997 (London: IB Taurus, 2007), 1920.
11. Steve Tsang, A Modern History of Hong Kong (Hong Kong: Hong Kong University
Press, 2004), 31.
12. James Hayes, Friends and Teachers: Hong Kong and Its People 19531987 (Hong
Kong: Hong Kong University Press, 1996), Chapter 8; Patrick Hase, The District
Office in Hong Kong, British Crown Colony, Revisited, ed. Elizabeth Sinn (Hong
Kong: Centre of Asian Studies, University of Hong Kong, 2001).
ch.13 Notes(p.307-359).indd 320
11/4/09 4:32:36 PM
13. Hayes, op. cit., 85107.

14. Colonial Secretariat, Report on the Organisation, Methods and Staff Survey (Hong
Kong: Legislative Council Sessional Paper, 1949), 7378.
15. McKinsey and Company, The Machinery of Government: A New Framework for
Expanding Services (Hong Kong: mimeo, May 1973), 7.
16. Ibid., 1617.
17. Ibid., 12.
18. The Public Service (Administration) Order gave the Chief Executive the same powers
over the civil service as those previously enjoyed by the Governor. The Association of
Expatriate Civil Servants argued unsuccessfully in court that the Basic Law required
that procedures for appointing and dismissing civil servants should be established by
legislative authority.
19. Secretary for Constitutional Affairs, Twelve Month Report on Implementation of the
Accountability System for Principal Officials (Hong Kong: mimeo, 2003).
20. Tsang (2005) op. cit., para 89.
21. Secretary for the Civil Service, Establishment of the AO and EO Grades, Press
22. Secretary for Constitutional Affairs (2003), op. cit.
23. Ibid.
24. In July 2003, a new Government Logistics Department was created by the merger of
the Government Land Transport Agency, the Government Supplies Department and the
Printing Department, a move that cut 60 posts, and the Labour Branch was merged with
the Labour Department. In 2004, the Civil Engineering Department was merged with
the Territory Development Department and there was a further review of the Education
and Manpower Bureau; the Housing Department, which had already seen swingeing
cuts in its establishment, was again re-organised.
25. Civil Service Bureau, Reorganisation of Policy Bureaus in the Government Secretariat:
Changes in Civil Service Organisation Structure, EC (200708), www.legco.gov.hk,
(May 2007).
26. The Hong Kong Institute of Education saga is a case in point. The government sought
judicial review over the finding of a Commission of Enquiry that the actions of the
Permanent Secretary for Education had violated academic autonomy, claiming that
it was necessary for officials to contact university administrators to implement its
policies.
27. Education and Manpower Bureau, Legislative Council Brief on the Merger of the
Education and Manpower Bureau with the Education Department and Education
Commission with the Board of Education, EMBCR 6/2/3321/90 Pt.3 (Hong Kong:
mimeo, November 18, 2002), 2.
28. Ian Scott, Generalists and Specialists in The Hong Kong Civil Service and Its Future,
eds. Ian Scott and John P. Burns (Hong Kong: Oxford University Press, 1988).
29. Personal communication, Civil Service Bureau, July 17, 2008.
30. Legislative Council, Bills Committee on Independent Police Complaints Council Bill,
LC Paper No. CB (2) 184/07/08(1), April 18, 2008.
31. See Ian Scott, Public Sector Reform and Middle Managers in Hong Kong, Asian
Journal of Public Administration 22(2) (December 2000), 107134.
32. Personal communication, Civil Service Bureau, July 17, 2008. Administrative officers
have usually made up about 19% of the directorate level. See Burns (2004), op. cit.,
110.
ch.13 Notes(p.307-359).indd 321
11/4/09 4:32:36 PM
33. For a detailed analysis of the composition of the grade, see Burns (2004), op. cit. For
a history of the grade, see Steve Tsang (2007), op. cit. For autobiographical accounts
of the experiences of administrative officers, see, for example, Austin Coates, Myself a
Mandarin (Hong Kong: Heinemann Educational Books, 1975); Hayes, op. cit.; Denis
Bray, Hong Kong Metamorphosis (Hong Kong: Hong Kong University Press, 2001).
Eric Peter Ho, Times of Change: A Memoir of Hong Kongs Governance 19501991
(Hong Kong: Hong Kong University Press, 2005).
34. N.J. Miners, The Government and Politics of Hong Kong, 2nd edition (Hong Kong:
Oxford University Press, 1977), 90.
35. Burns (2004), op. cit., 110.
36. By 2008, only 282 officers of a strength of 153, 195 were non-local officers. See Civil
Service Bureau, Civil Service Personnel Statistics 2008 (Hong Kong: Civil Service
Bureau, 2008), Table 3.1.
37. Steve Tsang (2007), op. cit., 110.
38. Hase, op. cit., 144.
1990), Articles 61, 101.
40. Preliminary Working Committee, Some Views of the Preliminary Working Committee
of the HKSAR Preparatory Committee on Maintaining the Stability of the Hong Kong
Civil Service and Its System (Hong Kong: mimeo, December 8, 1995).
41. May Sin-mi Hon, Support Tung, Qian tells Anson, SCMP, September 27, 2000;
SCMP, Ansons reprimand, editorial, September 27, 2000.
42. David Lague, Standing Up to the Boss, Far Eastern Economic Review, July 25, 2002,
2223.
43. Ibid., 23.
44. Tung Chee-hwa, Capitalising on Our Advantages, Revitalising Our Economy (Hong
Kong: Printing Department, 2003), 22.
45. In November 2003, this view was very strongly expressed by the Chairman of the Hong
Kong Senior Government Officers Association, Peter Chan Pak-fong, an engineer, who
reportedly said that the generalist approach inherited from the colonial era no longer
suited the needs of a knowledge-based society and that laymen should not be allowed
to lead experts. See Jimmy Cheung, Colonial civil service system attacked, SCMP,
November 3, 2003.
46. Chan (2001), op. cit. See also Anson Chan, Beware of blurring the dividing line,
Financial Times, July 1, 2002.
47. Jimmy Cheung, Civil service neutrality is a British thing: state leader, SCMP, October
17, 2003.
48. Secretary for the Civil Service, Principal Officials Accountability System, Press
Release, April 17, 2002; Civil Service Bureau, Circular setting out the Working
Relationship between Civil Servants and Principal Officials under the Accountability
System, LC Paper CB (2) 2467/0102 (01) (June 28, 2002); Government of the HKSAR,
SCSs transcript on the political neutrality of the civil service, Press Release, October
14, 2003.
49. Civil Service Bureau, Note for Establishment Sub-Committee of the Finance Committee,
ECI (20052006) 6 (November 2005), www.legco.gov.hk.
51. Ibid.
ch.13 Notes(p.307-359).indd 322
11/4/09 4:32:36 PM
52. Constitutional Affairs Bureau, Consultation Document on Further Development of the

Political Appointments System, www.cmab.gov.hk (July 2006), 57.
53. Quoted in Robert G. Kotewall and Gordon C.K. Kwong, Report of the Panel of Inquiry
on the Penny Stocks Incident (Hong Kong: Printing Department, 2002), 109.
54. Secretary for Constitutional Affairs (2003), op. cit.
55. Ibid., 28.
56. Constitutional and Mainland Affairs Bureau, Report on the Further Development of the
Political Appointment System, www.cmab.gov.hk (October 2007), 7.
57. Donald Tsang, A New Direction for Hong Kong, www.ceo.gov.hk (October 2007), para
110.
58. Milton Friedman and Rose Friedman, Free to Choose (Harmondsworth: Penguin, 1979),
55; See also Alvin Rabushka, Hong Kong: A Study in Economic Freedom (Chicago:
University of Chicago Press, 1979), 7, 31.
59. See, for example, H.J. Lethbridge, Hong Kong: Stability and Change (Hong Kong:
Oxford University Press, 1978); Elizabeth Sinn, Power and Charity: The Early History
of the Tung Wah Hospital, Hong Kong (Hong Kong: Oxford University Press, 1989).
60. Y.C. Jao, The Asian Financial Crisis and the Ordeal of Hong Kong (Westport, Conn.:
Quorum Books, 2001).
61. McKinsey, op. cit.
62. Finance Branch, Public Sector Reform (Hong Kong: The Branch, 1989), 3.
63. Ibid.
64. Hong Kong Government, Report of the Hong Kong Salaries Commission 1947 (Hong
Kong: Government Printer, 1949), 33.
65. Hong Kong Government, Annual Report by the Commissioner for Resettlement for the
Financial Year 195455 (Hong Kong: Government Printer, 1955), 4445.
66. Commission of Inquiry, Kowloon Disturbance 1966: Report of the Commission of
Inquiry (Hong Kong: Government Printer, 1967), 127.
67. Civil Service Branch, Civil Service Personnel Statistics (Hong Kong: The Branch,
1982), 1.
68. To take two examples: small class teaching was proposed in 1992 but not implemented
and civil service personnel reforms were mooted in 1993 but not pursued to any great
extent.
1995), 29.
70. Civil Service Bureau, Civil Service Personnel Statistics 1997 (Hong Kong: The Bureau,
1997), 12.
1997), 1623.
72. Ibid., 51.
73. For more detail on the programme, see Ian Scott, Public Administration in Hong Kong:
Regime Change and Its Impact on the Public Sector (Singapore: Marshall Cavendish,
2005), 9597.
74. Tung (2003), op. cit., 22.
75. Legislative Council, Panel on Public Service, General Overview of the Civil Service
Strength, Retirement and Resignation, LC Paper CB (1)1817/0708(01) (Hong Kong:
mimeo, June 16, 2008) .
76. Government of the HKSAR, Civil service establishment to rise by 1%, Administration
and Civic Affairs, March 31, 2008.
ch.13 Notes(p.307-359).indd 323
11/4/09 4:32:36 PM
77. Legislative Council, Panel on Public Service, Review of Employment Situation of NonCivil Service Contract Staff, LC Paper No. CB (1)471/0607(03) (December 2006),
34.
78. Ibid., 2; see also Ada Chan Ka Wing, A Review of the Non-Civil Service Contract
Scheme of the Hong Kong Government (Unpublished MPA dissertation, Hong Kong:
University of Hong Kong, 2008).
79. Legislative Council, Panel on Public Service (December 2006), op. cit., 7; Legislative
Council Panel on Public Service, Employment of Non-Contract Staff, LC Paper No.
CB(1)377/0708(03) (December 2007), 3.
80. Chang Lai-yin, An Analysis of the Impact of Civil Service Reform on Recruitment and
Retention in the Hong Kong Police Force (Unpublished MPA dissertation, Hong Kong:
University of Hong Kong, 2008), 24.
81. Public Service Commission, 2007 Annual Report (May 2008), www.psc.gov.hk, 4245;
see also Jimmy Cheung, Watchdog criticizes civil service management, SCMP, May
6, 2008; Civil Service Bureau, Civil Service Personnel Statistics 2008 (Hong Kong:
The Bureau, 2008), Table 1.1.
82. Ibid., Figure 1.4a.
83. Civil Service Bureau (2008), op. cit., Figure 1.4a.
85. Civil Service Bureau, Civil Service Personnel Statistics 2003 (Hong Kong: Printing
Department, 19972003), Table 1.6.
86. James Tien, Stop indulging the civil service, SCMP, February 29, 2000.
87. Secretary for the Civil Service, SCSs speech on Public Officers Pay Adjustment Bill,
88. Klaudia Lee and Sarah Bradford, Case has not ended legal battle for redress, SCMP,
June 11, 2003.
89. Legislative Council, Panel on Public Service, Minutes of a Meeting held on 23rd May,
LC Paper No. CB (1)2628/0102 (Hong Kong: mimeo, May 23, 2002).
90. Hong Kong Confederation of Trade Unions, No pay cuts. Collective bargaining rights
now! www.hkctu.org.hk (2002).
91. Secretary for the Civil Service, SCSs transcript on the pay cut consensus reached with
the staff sides, Press Release, February 21, 2003.
92. Secretary for the Civil Service (2002), op. cit.
93. Secretary for the Civil Service, SCS writes to all colleagues, Press Release, April 14,
2004.
94. Financial Secretary, The Budget 200304 (Hong Kong: Printing Department, 2003),
17.
95. Civil Service Bureau, 200809 civil service pay adjustment, Information and News,
www.csb.gov.hk, June 3, 2008,
96. Government of the HKSAR (2008), op. cit.
97. Joan Y.H. Leung and Ho-mun Chan, The School Management Reform in Hong
Kong: Administrative Control in a New Cloak of Managerialism in Public Sector
Reform in Hong Kong: Into the 21st Century, eds. Anthony B.L Cheung and Jane
C.Y. Lee (Hong Kong: The Chinese University Press, 2001); Joan Y.H. Leung, The
Politics of Decentralization: A Case Study of School Management Reform in Hong
Kong, Education and Society 19(3) (2001), 1736; Joe C.B. Leung, The Advent of
Managerialism in Social Welfare: The Case of Hong Kong, The Hong Kong Journal
of Social Work 36 (1/2) (2002), 6181.
ch.13 Notes(p.307-359).indd 324
11/4/09 4:32:37 PM
98. Joe C.B. Leung, op. cit.; See also NGO corner, www.swd.gov.hk (accessed July 22,
2008).
99. Leung and Chan, op. cit.
100. Brian Brewer and Mark Hayllar, Building Public Trust through Public-Private
Partnerships, International Review of Administrative Sciences 71(3) (2005), 475
492.
101. Efficiency Unit, Serving the Community by Using the Private Sector: A General
Guide to Outsourcing, 3rd edition, www.eu.gov.hk (March 2008), 7. See also Mark
Richard Hayllar, Outsourcing: Enhancing Private Sector Involvement in Public Sector
Provision in Hong Kong in Public Service Reform in East Asia, ed. Anthony B.L.
Cheung (Hong Kong: The Chinese University Press, 2005).
102. Donald Tsang, Big market, small government key, www3.news.gov.hk, September
19, 2006.
103. Efficiency Unit (March 2008), op. cit., 11.
104. Brewer and Hayllar, op. cit.
105. The establishment of the Housing Department declined from 14,098 in 2000 to 7, 624
in 2008. Civil Service Bureau, Civil Service Personnel Statistics (Hong Kong: Printing
Department, 2000), 27; Civil Service Bureau (2008), op. cit., 27. On privatisation in
Hong Kong, see Miron Mushkat and Roda Mushkat, The Transfer of Property Rights
from the Public to the Private Sector in Hong Kong: A Critical Assessment, Global
Economic Review 35 (4) (December 2006), 445461.
Chapter 5
1. Anthony B.L. Cheung, Public Sector Reform and the Re-legitimation of Public
Bureaucratic Power: The Case of Hong Kong, International Journal of Public Sector
Management 9 (5/6)(1996), 3750; Richard Common, Are Hong Kongs Public Sector
Reforms Converging with International Trends? in Public Sector Reform in Hong
Kong: Into the 21st Century, eds. Anthony B.L. Cheung and Jane C.Y. Lee (Hong Kong:
The Chinese University Press, 2001); see also Martin Painter, Against the Trend:
Public Management Reforms in Hong Kong in Public Reform, Policy Change and
New Public Management: From the Asia and Pacific Perspective, ed. Akira Nakamura
(Tokyo: EROPA Local Government Center, 2004), 3149.
2. Hansard, January 14, 1999, 4652.
3. Civil Service Bureau, Civil Service Reform: Consultation Document: Civil Service into
the 21st Century (Hong Kong: Printing Department, March 1999), 5.
4. Even in the Provisional Legislative Council (19971998), from which all but one of the
democrats were excluded, there was considerable criticism of government policies and
their implementation. See Hansard, April 8, 1998, 312395 and Legislative Council,
Report of the Select Committee to Inquire into the Circumstances Surrounding the
Commencement of the Operation of the New Hong Kong International Airport at Chep
Lap Kok since 6 July 1998 and Related Issues Vol. 1 (Hong Kong: Printing Department,
January 1999).
5. Civil Service Bureau (1999), op. cit., 5.
6. Civil Service Branch, Civil Service Consultation Document on Civil Service Terms
of Appointment and Conditions of Service (Hong Kong: Government Printer, 1993),
23; Civil Service Branch, Human Resource Management (Hong Kong: Government
Printer, December 1995), 54.
ch.13 Notes(p.307-359).indd 325
11/4/09 4:32:37 PM
7. Ian Scott, Public Sector Reform and Middle Managers in Hong Kong, Asian Journal
of Public Administration 22(2) (December 2000), 107134.
8. Hansard, April 5, 2000, 5662; Hansard, December 21, 2001, 2364.
9. Christopher Cheng, Public service must change with the times, SCMP, January 8,
2003.
1 0. Hansard, March 29, 2000, 53835383.
11. Cherry Cheung, Civil Service Pay Adjustments and Pay Trend Surveys (Hong Kong:
Research and Library Services Division, Legislative Council Secretariat, 2002), 1.
13. Hansard, April 5, 2000, 5660.
15. Ibid., 9.
16. Legislative Council, Panel on Public Service, Background Brief on Civil Service
Recruitment Policy, LC Paper No. CB (1)974/0708 (Hong Kong: mimeo, March 11,
2008), 1
17. Ibid., 2.
18. Article 101 also provides that British and foreign nationals may continue to work for
the Hong Kong government after 1997 although they may not hold the most senior
positions.
19. Civil Service Bureau, Recruitment, www.csb.gov.hk.
20. Public Service Commission, 2007 Annual Report, www.psc.gov.hk (May 2008), 4.
21. Civil Service Bureau, op. cit., 910.
22. Ibid.
23. Civil Service Branch, Civil Service Personnel Statistics (Hong Kong: The Branch,
1982), 1920.
24. Sa Ni Harte, Redundancy boost for expatriates, Sunday Morning Post, August 30,
1987.
25. Civil Service Branch (1993), op. cit., 3.
26. Tai Ming Cheung, Patriots, Expatriates, Far Eastern Economic Review, September
23, 1993.
27. Hansard, October 13, 1993, 136139; November 24, 1993, 1093137; December 15,
1993, 16351656; Brian Butt Yiu-ming, Local Terms of Employment for Expatriate
Civil Servants (Unpublished MBA dissertation, Hong Kong: University of Hong Kong,
1995), 1617.
28. Civil Service Branch (1993), op. cit., 19.
29. Civil Service Bureau, Civil Service Personnel Statistics (Hong Kong: Government
Printer, 1997), 1415.
30. Civil Service Branch (1993), op. cit., Annex E.
31. Ibid., 8.
32. Kue Mei Wah, Karen, Civil Service Reform in Hong Kong: New Appointment Policy
(Unpublished MPA dissertation, University of Hong Kong, 2001), 74.
33. Standing Commission on Civil Service Salaries and Conditions of Service, Civil Service
Salaries Starting Salaries 1999 (Report No. 36) (Hong Kong: Printing Department,
June 1999), 1819.
34. Ibid.
35. Ibid., 19.
36. Government of the HKSAR, New civil service entry system and fringe benefits
package, Press Release, April 7, 2000.
ch.13 Notes(p.307-359).indd 326
11/4/09 4:32:37 PM
37. Public Service Commission, Annual Report, 2000 (Hong Kong: Printing Department,
2001), 14.
38. Kue, op. cit., 76.
39. John P. Burns, Civil Service Reform in the HKSAR in The First Tung Chee-hwa
Administration, ed. Lau Siu-kai (Hong Kong: Chinese University Press, 2002), 278.
40. Public Service Commission, Annual Report, 2001 (Hong Kong: Printing Department,
2001), 8.
41. Ada Chan Ka Wing, A Review of the Non-Civil Service Contract Scheme of the Hong
Kong Government (Unpublished MPA dissertation, Hong Kong: University of Hong
Kong, 2008), passim.
42. Civil Service Bureau, Civil Service Newsletter, No. 69 (June 2007), 13.
43. Ibid.; see also Chang Lai-yin, An Analysis of the Impact of Civil Service Reform
on Recruitment and Retention in the Hong Kong Police Force (Unpublished MPA
dissertation, Hong Kong: University of Hong Kong, 2008).
44. See Tsang Wa-chung, A Review of Staff Relations in Relation to Public Sector Reform
in Hong Kong (Unpublished MPA dissertation, Hong Kong: University of Hong Kong,
2007).
45. Legislative Council, Panel on Public Service, General Overview of the Civil Service
Strength, Retirement and Resignation, LC Paper CB (1)1817/0708(01) (Hong Kong:
mimeo, June 16, 2008), 2.
46. Public Service Commission, 2006 Annual Report, www.psc.gov.hk, Appendix V.
47. Public Service Commission (2007), op. cit., 22.
48. Ibid., 1314.
49. Standing Commission on Civil Service Salaries and Conditions of Service, The First
Report of the Pay Level Survey (Report No. 16) (Hong Kong: Government Printer,
1986), 1; Civil Service Bureau, Progress Report on the Development of an Improved
Pay Adjustment Mechanism for the Civil Service, www.csb.gov.hk/hkgcsb/doclib
(November 2003), 5.
50. Ibid., Annex A.
51. Jack Arn, Public Sector Unions in The Hong Kong Civil Service: Personnel Policies
and Practices, eds. Ian Scott and John P. Burns (Hong Kong: Oxford University Press,
1984).
52. Standing Commission on Civil Service Salaries and Conditions of Service, Report No
1: First Report on Principles and Practice Governing Civil Service Pay (Hong Kong:
Government Printer, 1979), 1.
53. Standing Commission on Civil Service Salaries and Conditions of Service, Report No.
42 (January 2008), www.jsscs.gov.hk, Appendix A.
23 (Hong Kong: Government Printer, 1990).
55. Anthony B.L. Cheung, The Civil Service Pay System in Hong Kong: Implications
for Efficiency and Equity in Asian Civil Service Systems: Improving Productivity
and Efficiency, ed. John P. Burns (Singapore: Times Academic Press, 1994); Ahmed
Shafiqul Huque, Grace O.M. Lee and Anthony B.L. Cheung, The Civil Service in Hong
Kong: Continuity and Change (Hong Kong: Hong Kong University Press, 1998),
100; Grace O.M. Lee, Hong Kong: Institutional Inheritance from Colony to Special
Administrative Region in Reward for High Public Office: Asia and Pacific Rim States,
eds. Christopher Hood and B. Guy Peters (London: Routledge, 2003).
ch.13 Notes(p.307-359).indd 327
11/4/09 4:32:37 PM
56. For the text of the 1968 agreement, see John P. Burns, Government Capacity and the
Hong Kong Civil Service (Hong Kong: Oxford University Press, 2004), Appendix D.
57. Legislative Council, Panel on Public Service, Staff Consultation Mechanism in the Civil
Service, LC Paper No. CB (1) 1769/0405 (Hong Kong: mimeo, June 2005), 13.
4 (Hong Kong: Government Printer.1980).
59. Legislative Council, Panel on Public Service (2005), op. cit., 34.
60. Task Force on the Review of Civil Service Pay Policy and System, Interim Report:
Phase 1 Study (Hong Kong: Printing Department, April 2002), Appendix IX.
61. Standing Commission (2008), op. cit., 5.
62. Ibid., 45.
63. Committee of Inquiry into the 1988 Civil Service Pay Adjustment and Related Matters,
Report (Hong Kong: Government Printer, 1989), 21.
64. Ibid.
65. Ibid., 105.
66. Task Force on the Review of Civil Service Pay Policy and System, Phase One Final
Report, www.csb.gov.hk/hkgcsb/doclib (September 2002), Appendix 1.
67. Ibid.
68. Task Force, Interim Report (2002), op. cit.
69. Ibid., 22.
70. Task Force, Final Report (2002), op. cit., 1213.
71. Ibid.
72. Hansard, June 5, 2002, 70107015; Klaudia Lee and Sarah Bradford, Case has not
ended legal battle for redress, SCMP, June 11, 2003.
73. Civil Service Bureau, Brief for the Legislative Council Public Officers Pay Adjustments
(2004/2005) Bill, CSB CR PG 4085001/33 (May 13, 2003), 6.
74. Civil Service Bureau, Progress Report on the Development of an Improved Pay
Adjustment Mechanism for the Civil Service, www.csb.gov.hk/hkcsgcsb/doclib
(November 2003).
75. Ibid., 78.
76. Ibid., 9.
77. Ibid., 1114.
78. Legislative Council, Panel on Public Service, Progress Update on the Pay Level Survey
and the Development of an Improved Pay Adjustment Mechanism for the Civil Service,
LC Paper No. CB (1)248/0607(04) (November 2006).
79. HKSAR, Improved civil service pay adjustment mechanism announced, Press
Release, April 24, 2007.
80. Ibid.
81. Ibid.
82. Ibid.
84. T.T. Lui, Performance Appraisal in Ian Scott and John P. Burns, op. cit.; Brian
Brewer and Mark R. Hayllar, An Exploratory Study of the G.F.1 Performance Appraisal
System in the Hong Kong Civil Service (Hong Kong: Department of Public and Social
Administration, City Polytechnic of Hong Kong, September 1991).
85. Tom Coens and Mary Jenkins, Abolishing Performance Appraisals: Why They Backfire
and What to Do Instead (San Francisco: Berrett-Koehler, 2000).
86. Public Service Commission (2000), op. cit., 15.
ch.13 Notes(p.307-359).indd 328
11/4/09 4:32:37 PM
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
Ibid., 23.
Public Service Commission (2007), op. cit., 50.
Civil Service Bureau, Performance Management Guide (1999), www.csb.gov.hk, 6.
Public Service Commission (2007), op. cit., 52.
Civil Service Bureau (1999), op. cit., 15.
Legislative Council, Panel on Public Service, Performance Management in the Public
Service, LC Paper No. CB (1) 1459/0203(04) (Hong Kong: mimeo, April 2003), 1.
Personal communication, Civil Service Bureau, July 29, 2008.
Legislative Council (2003), op. cit., 3.
Legislative Council, Panel on Public Service, Updated Overview of Civil Service
Conduct and Discipline, LC Paper No. CB (1) 1915/0607(02) (Hong Kong: mimeo,
June 2007), 5.
Ibid., Appendix B; see also Public Service Commission (2007), op. cit., Appendix 6.
Ibid., 50.
Coens and Jenkins, op. cit., 2024.
Civil Service Bureau (1999), op. cit., 2324.
Ibid.
Legislative Council, Panel on Public Service, Integrity Enhancement Initiatives for
Civil Servants, LC Paper No. CB (1)764/0708(05) (Hong Kong: mimeo, February
2008); Legislative Council, Panel on Public Service, Update on National Studies and
Basic Law Training for Civil Servants, LC Paper No. CB (1) 764/0708(04) (Hong
Kong: mimeo, February 2008); Civil Service Bureau, LCQ 6: Civil Service Code,
July 9, 2008, www.csb.gov.hk.
Government of the HKSAR, Hong Kong 2001 (Hong Kong: Printing Department,
2002), 23.
Legislative Council, Panel on Public Service, Reorganisation of the Civil Service
Training and Development Institute, LC Paper No. CB (1) 551/0304 (03) (Hong
Kong: mimeo, December 2003).
Legislative Council, Update on National Studies and Basic Law Training (February
2008), op. cit., 13.
Ibid.
Ibid., 3.
Ibid., 57; Donald Tsang, A New Direction for Hong Kong (October 2007), www.ceo.
gov.hk, para. 115.
See Ian McWalters, Bribery and Corruption Law in Hong Kong (Singapore: LexisNexis
Butterworths, Singapore, 2003), 17.
Legislative Council, Panel on Public Service, Integrity Enhancement Initiatives
(February 2008), op. cit., 5.
Independent Commission against Corruption and Civil Service Bureau, Ethical
Leadership in Action: Handbook for Senior Managers in the Civil Service (Hong Kong:
ICAC and CSB, 2008), 1923.
John P. Burns, The Hong Kong Civil Service in Transition, Journal of Contemporary
China 8(20) (1999), 80.
Legislative Council, Panel on Public Service (June 2007), op. cit., 3.
Civil Service Branch, Summary Guide on Civil Service Regulations (Hong Kong: The
Branch, 1997).
Civil Service Bureau, Disciplinary Mechanism, www.csb.gov.hk/hkgcsb (2001).
Burns (2002), op. cit., 279.
ch.13 Notes(p.307-359).indd 329
11/4/09 4:32:38 PM
116. Civil Service Branch (1997), op. cit., 12.1012.36.

117. Legislative Council, Panel on Public Service, Supplementary Information on Corruptionrelated Statistics, LC Paper No. (1) 989/0708(03) (March 2008), Annex A.
118. Ibid., Annex B.
119. Ibid., Annex C.
120. Public Service Commission, Annual Report 2003 (Hong Kong: Printing Department,
2003), 2627.
121. Public Service Commission (2007), op. cit., Appendix 8.
122. Ibid. A civil servant who is dismissed loses pension benefits while one who is
compulsorily retired is entitled to keep those benefits.
123. Legislative Council, Panel on Public Service (June 2007), op. cit., Annex A.
124. Burns (2004), op. cit., 254257; Brian Brewer, Human Resource Management Reforms
in the Hong Kong Government in Cheung and Lee (2001), op. cit., 274.
125. Legislative Council, Report of the Select Committee to Inquire into the Circumstances
Surrounding the Departure of Mr Leung Ming-yin from the Government and Related
Issues Vol. 1 Report and Minutes of Proceedings (Hong Kong: Government Printer,
June 1997), 3132.
126. Legislative Council, Panel on Public Service, Post-retirement Employment of Ms Elaine
Chung, Former Deputy Director of Housing/Deputy Secretary for Housing, LC Paper
No. CB (1)1095/0405(01) (Hong Kong: mimeo, March, 2005), 5.
127. Elaine Chung, Letter to Secretary-General, Legislative Council, LC Paper No. CB
(1)548/0405(01), November 25, 2004; Elaine Chung, Letter to Clerk of the Panel on
Public Service, LC Paper No. CB (1)545/0405(01), December 18, 2004.
128. Fanny W.Y. Fung and E. Wu, Arculli heads committee to review jobs policy for excivil servants, SCMP, October 1, 2008; Chief Executive, Statement of the Chief
Executives Office, Press Release, August 15, 2008.
129. Office of the Ombudsman, Administrative Ethics Checklist (Hong Kong: Printing
Department, 1998), 14; Civil Service Bureau, Civil Servants Guide to Good Practices,
www.csb.gov.hk (2005).
130. Independent Commission against Corruption and Civil Service Bureau (2008), op. cit.,
4.
131. Civil Service Bureau, LCQ6: Civil Service Code, www.csb.gov.hk.
Chapter 6
1. Anthony B.L. Cheung, Reform in Search of Politics: The Case of Hong Kongs
Aborted Attempt to Corporatise Public Broadcasting, The Asian Journal of Public
Administration 19(2) (December 1997), 276302; Anthony B.L. Cheung, How
Autonomous are Public Corporations in Hong Kong? The Case of the Airport Authority,
2. Hansard, June 16, 1999, 8791.
3. Hansard, June 16, 1999, 87878788.
4. Hansard, June 16, 1999, 88558856.
5. Hansard, June 16, 1999, 8858.
6. Elizabeth Y.Y. Sinn, Power and Charity: The Early History of the Tung Wah Hospital
(Hong Kong: Oxford University Press, 1989); H.J. Lethbridge, Hong Kong: Stability
and Change (Hong Kong: Oxford University Press, 1978), 71103.
7. See Alan Smart, The Shek Kip Mei Myth: Squatters, Fires and Colonial Rule in Hong
Kong, 19501963 (Hong Kong: Hong Kong University Press, 2006), Chapter 6.
ch.13 Notes(p.307-359).indd 330
11/4/09 4:32:38 PM
8. Anthony Sweeting, A Phoenix Transformed: The Reconstruction of Education in PostWar Hong Kong (Hong Kong: Oxford University Press, 1993), 218219.
9. Hansard, February 14, 1973, 440.
10. Hansard, April 2, 1975, 658.
11. Lam Pun-lee, The Scheme of Control on Electricity Companies (Hong Kong: City
University of Hong Kong Press, 1996), 1729.
12. Ian Scott, Political Change and the Crisis of Legitimacy in Hong Kong (London: Hurst,
1989), 152165; James Lee, Housing, Home Ownership and Social Change in Hong
Kong (Aldershot: Ashgate, 1999), 13.
13. Paul Morris and Ian Scott, Educational Reform and Policy Implementation in Hong
Kong, Journal of Education Policy 18(1) (2003), 7184.
14. W.D. Scott and Company, Report on the Delivery of Medical Services (Hong Kong: The
Company, 1985), 23.
15. Robin Gauld and Derek Gould, The Hong Kong Health Sector: Development and
Change (Hong Kong: The Chinese University Press, 2002), 5173.
16. Hansard, March 9, 1988, 899.
17. Cheung (December 1997), op. cit., 276302.
18. Trading Funds Ordinance, Cap 430, S. 3(2).
19. Anthony B.L Cheung, The Trading Fund Reform in Hong Kong in Public Sector
Reform in Hong Kong: Into the 21st Century, eds. Anthony B.L. Cheung and Jane C.Y.
Lee (Hong Kong: The Chinese University Press, 2001), 204; Lam Pun-lee and Yuecheong Chan, Privatising Water and Sewage Services (Hong Kong: City University of
Hong Kong Press, 1997), 3.
20. Cheung (2001), op. cit., 21820; Ahmed Shafiqul Huque et al., Public Sector Reform
in Hong Kong: The Performance of Trading Funds, Occasional Papers Series (Hong
Kong: Department of Public and Social Administration, City University of Hong Kong,
1999), 1.
21. Cheung (2006), op. cit.
22. Hansard, April 24, 1994, 3267.
23. Financial Secretary, The 20012002 Budget: Honing Our Strengths, Striving to Excel
(Hong Kong: Printing Department, March 2001), 18.
24. Financial Secretary, The Budget 200304 (Hong Kong: Printing Department, 2003),
25.
25. Financial Secretary, The 200405 Budget (Hong Kong: Government Logistics
Department, March 2004), 25; Enoch Yiu, Tolls back Mas drive to sell $6b in bonds,
SCMP, April 20, 2004.
26. Joel Baglole, Hong Kongs Big Sell-Off, Far Eastern Economic Review, October
23, 2003; Florence Chong, Bonkers over property float, The Australian, February 5,
2004.
27. Lo Siu Lan v Hong Kong Housing Authority, FACV 10/2005, www.legalrefjudiciary.
hk.
28. Rikkie Yeung, Moving Millions: The Commercial Successes and Political Controversies
of Hong Kongs Railways (Hong Kong: Hong Kong University Press, 2007), 264265.
29. Jimmy Cheung, Exco endorses formation of an anti-trust agency, SCMP, April 30,
2008; Financial Secretary, The 200809 Budget (Hong Kong: Government Logistics
30. Home Affairs Bureau, Legislative Council Panel on Home Affairs: Review of Advisory
and Statutory Bodies: Interim Report No. 14 Review of the Classification System of
ch.13 Notes(p.307-359).indd 331
11/4/09 4:32:38 PM
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
Advisory and Statutory Bodies in the Public Sector (Hong Kong: The Bureau, 2005),
Annex 1. In December 2007, the government reported that there were about 400
advisory and statutory bodies rather than the 509 that it had recorded in June 2005. It
seems unlikely that the number would had been reduced by 20% in such a short time
and the 2005 figure would seem to be more accurate. See Hong Kong Government,
Hong Kong 2007 (Hong Kong: Government Logistics Department, 2008), 16.
Government of the HKSAR, Management contract for the Cross Harbour Tunnel
awarded, Press Release, May 30, 2002.
See Yeung (2007), op. cit.; Cheung (2006), op. cit.; Legislative Council, Background
Brief on Airport Authority (Amendment) Bill 2004, LC Paper No. CB (1) 1693/0304
(May 2004); Economic Development and Labour Bureau, Consultation Document
on Partial Privatization of the Airport Authority (Hong Kong: Government Logistics
Department, November 2004).
Government of the HKSAR, Statement by CS on the review of the institutional
framework for housing, Press Release, June 20, 2002.
Banking Ordinance, Cap 155, S.7.
Jackie Wu and Michael Yu, The Governance of the Hong Kong Monetary Authority
and Comparable Authorities in Hong Kong and Overseas Jurisdictions (Hong Kong:
Research and Library Services Division, Legislative Council Secretariat, 2003), 10,
25.
Hong Kong Monetary Authority, Annual Report 2007, www.hkma.gov.hk (accessed
August 26, 2008).
Hong Kong Housing Authority, Annual Report 2000/2001 (Hong Kong: The Authority,
2001), 98.
Ibid., 99.
Kowloon-Canton Railway Corporation, Annual Report 2000 (Hong Kong: The
Corporation, 2001), 109.
Hansard, April 2, 1975, 659660.
Timothy V. Runnacles, Nigel G. Wilson and Edward C.T. So, Constraints and
Opportunities of Planning the Mass Transit Railway in Land-Use/Transport Planning
in Hong Kong: The End of an Era, eds. Harry T. Dimitrou and Alison H.S. Cook
(Aldershot: Ashgate, 1998), 120.
Environment, Transport and Works Bureau, 2 railway corporations invited to start talks
on possible merger, Press Release, February 24, 2004; Environment, Transport and
Works Bureau, Legislative Council Brief on Rail Merger Bill, ETWB(T) CR1/986/00
(June 2006); Yeung (2007), op. cit.
Ibid., Annex B.
Cheung (2001), op. cit., 215217; Lam and Chan, op. cit., 3.
Social Welfare Department, Social Welfare Services in Figures (2007 edition), www.
swd.gov.hk (accessed August 26, 2008); Legislative Council, Panel on Welfare
Services, Lump Sum Grant Subvention System, LC Paper No. CB (2) 1875/0708(03)
(May 2008), 1.
Community Chest, Annual Report 2007/ 2008, www.commchest.org.hk, 1418; Hong
Kong Jockey Club, Community Services, ww.hkj.com.hk (accessed August 28,
2008).
Hong Kong Council of Social Service, Membership List, www.hkcss.org.hk (accessed
August 28, 2008).
ch.13 Notes(p.307-359).indd 332
11/4/09 4:32:38 PM
48. Raymond Ngan and Mark Kin-yin Li, Responding to Poverty, Income Inequality and
Social Welfare: The Neo-Liberalist Government versus a Social Investment State
in The Hong Kong Special Administrative Region in its First Decade, ed. Joseph Y.S
Cheng (Hong Kong: City University of Hong Kong Press, 2007); Joseph C.W. Chan
et al., From Consultation to Civic Engagement: The Road to Better Policy-making and
Governance in Hong Kong (Hong Kong: Centre for Civil Society and Governance,
University of Hong Kong, March 2007), Chapter 7.
49. Nelson Chow, The Past and Future Development of Social Welfare in Hong Kong in
Hong Kong in Transition, ed. Joseph Y.S. Cheng (Hong Kong: Oxford University Press,
1986), 409.
50. Legislative Council, Panel on Welfare Services (May 2008), op. cit., 34.
51. Environment, Transport and Works Bureau, Background Brief on Fare Increase
Applications by Franchised Bus Companies, LC Paper No. CB (1) 829/0708 (April
25, 2008).
52. Dorothy Chan, Modern Transport Services in Hong Kong in Modern Transport in
Hong Kong for the 21st Century, eds. Anthony G.O. Yeh, Peter R. Hills and Simon
W.K. Ng (Hong Kong: Centre of Urban Planning and Environmental Management,
University of Hong Kong, 2001), 106.
53. Hong Kong Government (2007), op. cit., 234235.
54. Hong Kong Housing Authority (2001), op. cit., 1314.
55. Efficiency Unit, Serving the Community by Using the Private Sector: A General Guide
to Outsourcing, 3rd edition (March 2008), www.eu.gov.hk, 7.
56. Legislative Council, Panels on Information Technology and Broadcasting and Planning,
Lands and Works, Minutes of a Joint Meeting, LC Paper No. CB (1)1817/9899 (April
29, 1999); Leo F. Goodstadt, Uneasy Partners: The Conflict between Public Interest
and Private Profit in Hong Kong (Hong Kong: Hong Kong University Press, 2005),
134135.
57. Tourism Commission, Economic Services Bureau, Briefing Paper Hong Kong
Disneyland (Hong Kong: mimeo, November 1999).
58. Tourism Commission, Commerce and Economic Development Bureau, Progress
Update on Hong Kong Disneyland, LC Paper No. CB (1) 457/0708(05) (December
2007); SCMP, Swift action needed to revive Disneyland, editorial, April 16, 2008.
59. Brian Brewer and Mark Hayllar, Building Public Trust through Public-Private
partnerships, International Review of Administrative Sciences 71(3)(2005), 475491;
Home Affairs Bureau, Assessment of the Financial Implications of the WKCD Project,
WKCD511 (January 2008), 13.
60. Moses Mo-chi Cheng and Brian Stevenson, Report of the Independent Inquiry on the
Harbour Fest (Hong Kong: mimeo, May 2004), iii, 124.
61. Efficiency Unit (2008), op. cit., 7.
62. Donald Tsang, Embracing New Challenges, www.policyaddress.gov.hk/0809/index.
html, para 4.
63. Eliza W.Y. Lee, The New Hong Kong International Airport Fiasco, International
Review of Administrative Sciences 66(1) (2000), 5772.
64. Hong Kong Housing Authority, The Report of the Investigation Panel on Accountability:
Piling Contract 166/1997 of Shatin Area 14B Phase 2 (Hong Kong: The Authority,
2000); Lo Shiu-hing, Governing Hong Kong: Legitimacy, Communication and Political
Decay (New York: Nova Science Publishers, 2001), 114.
ch.13 Notes(p.307-359).indd 333
11/4/09 4:32:38 PM
65. Quinton Chan, KCRC to pay extra $132.6 million after West Rail miscalculation,
SCMP, June 7, 2004.
66. These include, for example, the Hong Kong Applied Science and Technology Institute,
the Sports Development Board and the Tourism Board.
67. Interpretation and General Clauses Ordinance, Cap 1, S.42.
68. Urban Renewal Authority Ordinance, Cap 563, S.33.
70. Education Bureau, Education Bureau launches judicial review, Press Release,
September 17, 2007.
71. Housing Authority, About us, www.housingauthority.gov.hk (accessed August 31,
2008); Hong Kong Hospital Authority, Annual Report 20062007 (Hong Kong: The
Authority, 2007), 10. See also Janice Caulfield and Agnes Liu, Shifting Concepts of
Autonomy in the Hong Kong Hospital Authority, Public Organisation Review 6(3)
(2006), 203219.
72. Hong Kong Tourism Board Ordinance, Cap 302, S.9.
73. MTR Corporation, Annual Report 2007, www.mtr.com.hk, 102105.
74. Transport International Holdings Limited, Annual Report 2007, www. irasia.com.
75. The government has long recognised that there are potential conflicts of interest in
the role that senior civil servants play on the boards of statutory bodies. See Finance
Branch, Public Sector Reform (Hong Kong: The Branch, 1989), 17. In 1990, two civil
servants were in effect dismissed from the board of the KCRC, apparently for criticising
the award of golden handshakes to senior members of staff. See Ian Thynne, Hong
Kongs Kowloon-Canton Railway Corporation and its Golden Handshake Affair,
Asian Journal of Public Administration 19(1) (1997), 142156.
76. Kenneth L. Chau and Chack-kie Wong, The Social Welfare Reform: A Way to Reduce
Public Burden in The First Tung Chee-hwa Administration, ed. Lau Siu-kai (Hong
Kong: Chinese University Press, 2002), 221.
77. Hansard, December 12, 2001, 2458, 2496.
78. Urban Renewal Authority Ordinance, Cap 563, S.9.
79. Audit Commission, Review of the Hong Kong Sports Development Board: Report No.
36 (Hong Kong: Printing Department, 2001).
80. Public Accounts Committee, Report of the Public Accounts Committee on the Accounts
of the Government of the Special Administrative Region: Report No. 37 (Hong Kong:
Printing Department, February 2002).
81. Audit Commission, Report No. 49, www.audit.gov.hk (October 2007), Chapter 5.
82. Ibid., 14, 26, 3738.
83. Public Accounts Committee, Report No. 49A, www.legco.gov.hk (April 2008), Part 4,
92.
84. Ibid., 10.
85. Government of the HKSAR, Work progress of Urban Renewal Authority, Press
Release, January 9, 2002.
86. Audit Ordinance, Cap 122, S.14.
87. Government of the HKSAR, Government response on appointment of Director of
Audit, Press Release, November 28, 2003; Hansard, December 17, 2003, 23182326;
Government of the HKSAR, Independence of Audit Commission, Press Release,
December 17, 2003.
88. Chan (2004), op. cit.
ch.13 Notes(p.307-359).indd 334
11/4/09 4:32:39 PM
90. Ibid., 2453.

91. Ibid., 2510.
92. Government of the HKSAR, CS statement on remuneration of senior executives of
statutory and other bodies, Press Release, June 26, 2002.
93. Ibid.
94. See, for example, Hansard, May 9, 2007, 6766; Maria Chan, HKMA chiefs pay packet
gets 7.9pc fatter at HK$10.3 million, SCMP, April 19, 2008.
95. Philip Bowring, Suspicions of sleaze thrive on secrecy, SCMP, June 3, 2002.
96. Government of the HKSAR, Managing Director of the Urban Renewal Authority
appointed, Press Release, October 12, 2001.
97. Hansard, December 3, 2003, 18121822; Legislative Council, Panel on Home Affairs,
Minutes of a Meeting held on 13th February 2004 (Hong Kong: mimeo, 2004). See
also Anthony B.L. Cheung and Paul C.W. Wong, Who Advised the Hong Kong
Government? The Politics of Absorption before and after 1997, Asian Survey 44(6)
(NovemberDecember, 2004), 874894.
98. Constitutional Affairs Bureau, Accountability System for Principal Officials (Hong
Kong: mimeo, 2002), 18.
99. Home Affairs Bureau, Review of the Role and Functions of Public Sector Advisory and
Statutory Bodies: Consultation Paper (Hong Kong: The Bureau, 2003), 6.
100. Ibid., 68. See also Ian Scott, The Government and Statutory Bodies in Hong Kong:
Centralization and Autonomy, Public Organisation Review 6(3) (September 2006),
185202; Ian Thynne, Statutory Bodies as Instruments of Government in Hong Kong:
Review Beginnings and Analytical Challenges Ahead, Public Administration and
Development 26(1) (2006), 4553.
101. Home Affairs Bureau, Progress Report on the Review of Advisory and Statutory Bodies
(Hong Kong: The Bureau, May 3, 2005).
102. Hansard, January 30, 2008, 7576.
103. Audit Commission, Report No. 49, op. cit., Chapter 5.
104. Ibid.
105. Legislative Council, Panel on Home Affairs, Minutes of a Meeting held on 16th April
2004 (Hong Kong: mimeo, 2004), 14; Legislative Council, Panel on Home Affairs,
Minutes of a Meeting held on 17th June 2005 (Hong Kong: mimeo, 2005), 13.
106. See Scott (2006), op. cit.
107. To date, the Equal Opportunities Commission has been the only statutory body subject
to an individual report under the review. The Home Affairs Bureau used the opportunity
to abolish the Equal Opportunities Commission post of executive chairman on the
grounds that no other non-departmental public bodies had such positions. See Home
Affairs Bureau, Interim Report No.15 Review of the Corporate Governance of the
Equal Opportunities Commission, LC Paper No. CB (2) 786/0506 (Hong Kong:
mimeo, January 2006). The report lists the other organisations that the government
regards as non-departmental public bodies.
Chapter 7
1. Quoted in W.I. Jenkins, Policy Analysis (London: Martin Robertson, 1978), 15.
2. Ambrose Y.C. King, Administrative Absorption of Politics in Hong Kong: Emphasis
on the Grass Roots Level in Social Life and Development in Hong Kong, eds. Ambrose
Y.C. King and Rance P.L. Lee (Hong Kong: The Chinese University Press, 1981),
130.
ch.13 Notes(p.307-359).indd 335
11/4/09 4:32:39 PM
3. John W. Kingdon, Agendas, Alternatives and Public Policies, 2nd edition (New York:
Harper Collins, 1995), 78.
4. Jerry McCaffery, Features of the Budgetary Process in Handbook of Government
Budgeting, ed. Roy T. Meyers (San Francisco: Jossey-Bass, 1999), 27.
5. Alvin Rabushka, Value for Money: The Hong Kong Budgetary Process (Stanford:
Hoover Institution Press, 1976); Newman M.K. Lam, The Changing Face of Hong
Kong Budgeting, Public Administration and Policy 9 (2) (2000), 125; Newman M.K.
Lam, Government Intervention in the Economy: A Comparative Analysis of Singapore
and Hong Kong, Public Administration and Development 20(5) (2000), 397421. See
also Stephen Brown et al., The Budget and Public Finance in Hong Kong (Hong Kong:
Civic Exchange, 2003).
6. Alvin Rabushka, Hong Kong: A Study in Economic Freedom (Chicago: University of
Chicago Press, 1979), 3132.
7. Financial Secretary, The 198283 Budget (Hong Kong: Government Printer, 1982),
Appendix A.
8. Finance Branch, Practitioners Guide: Management of Public Finances (Hong Kong:
Department, March 2004), 17; Financial Secretary, The 200304 Budget (Hong Kong:
Printing Department, March 2003), 3.
10. Ibid., 5.
11. Financial Secretary, FS speech on Hong Kongs economy and management of public
finances, Press Release, October 23, 2003.
13. Government of the HKSAR, Government releases accrual-based accounts for 2002
2003, Press Release, January 5, 2004.
14. Financial Secretary, The 200304 Budget (2003), op. cit., 15.
15. Financial Secretary (2004), op. cit., 17.
Department, March 2004), Supplement and Appendices, 7.
17. Ibid., 53.
18. Financial Secretary, The 20082009 Budget: Information Pack for the Financial
Secretarys Consultations, LC CB (1)145/0708(03), www.legco.gov.hk (November
2007), 42.
19. Ibid., 40.
20. Task Force on Review of Public Finances, Final Report to the Financial Secretary
(Hong Kong: Printing Department, February 2002), 43.
21. Ibid.
22. Advisory Committee on New Broad-Based Taxes, Final Report to the Financial
Secretary (Hong Kong: Printing Department, February 2002), 27.
23. Financial Secretary, The 200405 Budget: Information Pack for the Financial
Secretarys Consultations, www.budget.gov.hk/2004, 23.
24. Ibid.
25. See Lawrence Ma, GST Eliminate (sic) Business Advantages, www.chamber.org.hk
(2006); Andrea Pawlyna, Taxing Time, www.hkicpa.org.hk (September 2006).
26. Financial Secretary, Broadening the Tax Base: Ensuring Our Future Prosperity: Whats
the Best Option for Hong Kong, www.taxreform.gov.hk (July 2006).
ch.13 Notes(p.307-359).indd 336
11/4/09 4:32:39 PM
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
Ibid.
Hansard, October 19, 2006, 479480.
Ibid., 580.
Financial Services and Treasury Bureau, Public Consultation on Tax Reform: Interim
Report, Fin (CR)/11/2306/06 (December 5, 2006).
Financial Secretary, The 2004/2005 Budget, op. cit., 24.
See Gabriel M. Leung and John Bacon-Shone, eds., Hong Kongs Health System:
Reflections, Perceptions and Visions (Hong Kong: Hong Kong University Press, 2006),
Part IV.
Food and Health Bureau, Your Health, Your Life: Healthcare Reform Consultation
Document (Hong Kong: Government Logistics Department, March 2008).
Calculated from Financial Secretary, The 200203 Budget: Background Information
for the Financial Secretarys Consultations with LegCo Members on the Expenditure
Part of the Budget (Hong Kong: Finance Bureau, 2001), Chart 10.
Hansard, April 9, 2003, 5428.
Financial Secretary, The 200405 Budget: Information Pack for the Financial
Secretarys Consultations, op. cit., Chart 9.
Financial Secretary (2003), op. cit., 18
Financial Secretary, The 20082009 Budget, op. cit., 1314.
Ibid., 17.
Hansard, March 28, 2007, 5325, 5376.
Ibid., 53815383.
I am grateful to Alan N. Lai for information on the post-2002 process of resource
allocation.
Financial Secretary, The 200102 Budget: Honing Our Strengths: Striving to Excel
(Hong Kong: Government Printer, 2001), 5, Chart 10.
Donald Tsang, Embracing New Challenges (Hong Kong: Government Logistics
Department, 2008).
Government of the HKSAR, Estimates for the Year ending 31 March 2008 Volume 1aGeneral Revenue Account (Hong Kong: Printing Department, 2007), 209.
Government of the HKSAR, Estimates for the Year ending 31 March 2008 Volume 1bGeneral Revenue Account (Hong Kong: Printing Department, 2007), 325.
Government of the HKSAR, Estimates for the Year ending 31 March 2008 Volume 1aGeneral Revenue Account, op. cit., 218.
Ibid., 212.
Ibid., 210.
Ibid.
Government of the HKSAR, Estimates for the Year ending 31 March 2008 Volume 1bGeneral Revenue Account, op. cit., 326.
Ma Siu-hung, A Study of the Policy Advice Mechanisms of the Hong Kong Government
(Unpublished MPA dissertation, Hong Kong: University of Hong Kong, 1998), 124
148.
Chief Executive (2008), op. cit.
Government of the HKSAR, Policy Agenda (Hong Kong: Government Logistics
Department, 2008).
Financial Secretary (2001), op. cit.
Hansard, April 1, 1992, 24882497.
ch.13 Notes(p.307-359).indd 337
11/4/09 4:32:39 PM
58. Financial Secretary, The 200405 Budget: Information Pack (2003), op. cit.
59. Civicus, The HKSAR: A Vibrant but Loosely Organised Civil Society (Hong Kong:
Hong Kong Council of Social Service, 2006), Appendix 4 (with additional mimeo
material not included in the main report).
60. Ian K. Perkin, Tang: is he going to have it both ways? Hong Kong Business (December
2003), 1820.
61. Financial Secretary, The 200809 Budget, op. cit., 13, 2324.
62. Finance Committee, Procedure, www.legco.gov.hk (2002), S.49.
63. See, for example, Hansard, March 29, 2007, 55135603.
64. Hansard, April 9, 2003, 5435, 5470.
65. Secretary for Housing, Planning and Lands, Speech to the Lions Club International on
the analysis of the property market data, Press Release, July 31, 2003.
66. Financial Secretary (1982), op. cit., Appendix A.
Chapter 8
1. Mark Considine, Public Policy: A Critical Approach (South Melbourne: Macmillan,
1994), 34; Michael Howlett and M. Ramesh, Studying Public Policy: Policy Cycles
and Policy Systems, 2nd edition (Don Mills, Ontario: Oxford University Press, 2003),
58.
2. Quoted in W.I. Jenkins, Policy Analysis (London: Martin Robertson, 1978), 15.
3. Considine, op. cit., 56.
4. R.W. Cobb and C.D. Elder, Participation in American Politics, 2nd edition (Baltimore:
John Hopkins, 1983), 86.
5. John W. Kingdon, Agendas, Alternatives and Public Policies, 2nd edition (New York:
Harper and Collins, 1995), 78.
6. Ibid., 145; see also John P. Burns, The Policy Process in the HKSAR in Public Reform,
Policy Change and New Public Management: From the Asia and Pacific Perspective,
ed. Akira Nakamura (Tokyo: EROPA Local Government Center, 2004), 5378.
7. See Ma Ngok, Political Development in Hong Kong: State, Political Society, and Civil
Society (Hong Kong: Hong Kong University Press, 2007), Part C; Elaine Chan and
Joseph Chan, The First Ten Years of the HKSAR: Civil Society Comes of Age, The
Asia Pacific Journal of Public Administration 29(1) (June 2007), 7799.
8. Ian Scott, Legitimacy, Governance and Public Policy in Post-handover Hong Kong,
The Asia Pacific Journal of Public Administration 29(1) (June 2007), 2949; Anthony
Cheung, Policy Capacity in Hong Kong: Constrained Institutions Facing a Crowded
and Differentiated Polity, The Asia Pacific Journal of Public Administration 29(1)
(June 2007), 5175.
9. John A. Rohr, Ethics for Bureaucrats: An Essay in Law and Values, 2nd edition (New
York: Marcel Dekker, 1989), 68.
10. Hansard, October 18, 1972, 4.
11. Paul Morris and Ian Scott, Educational Reform and Policy Implementation in Hong
Kong, Journal of Education Policy 18(1) (2003), 7184.
12. Norman Miners, Hong Kong under Imperial Rule 19121941 (Hong Kong: Oxford
University Press, 1987), 15369, 280282.
13. C.J.G. Lowe, How the Government in Hong Kong Makes Policy, Hong Kong Journal
of Public Administration 2(2), 6370.
ch.13 Notes(p.307-359).indd 338
11/4/09 4:32:39 PM
Expanding Services in Hong Kong (Hong Kong: mimeo, May 1973), 16.
15. Ibid., 911.
16. Ian Scott, Generalists and Specialists in The Hong Kong Civil Service and Its Future,
eds. Ian Scott and John P. Burns (Hong Kong: Oxford University Press, 1988).
17. Hong Kong Government, Consultation Document: Redress of Grievances (Hong Kong:
Government Printer, August 1986); Hong Kong Government, Green Paper: The 1987
Review of Developments in Representative Government (Hong Kong: Government
Printer, 1987).
18. Joan Y.H. Leung, State and Society: The Emergence and Marginalization of Political
Parties in Hong Kong (Unpublished Ph.D. thesis, Hong Kong: University of Hong
Kong, 1999), 149154.
19. T.A. Lowi, Four Systems of Policy, Politics and Choice, Public Administration
Review 32(4) (1972), 298310.
20. Anthony Sweeting, Hong Kong Education within Historical Processes in Education
and Society in Hong Kong: Toward One Country and Two Systems, ed. Gerard A.
Postiglione (Hong Kong: Hong Kong University Press, 1992), 45.
21. Hong Kong Government, Annual Report by the Commissioner for Resettlement for the
Financial Year 195455 (Hong Kong: Government Printer, 1955); Anthony Sweeting, A
Phoenix Transformed: The Reconstruction of Education in Post-War Hong Kong (Hong
Kong: Oxford University Press, 1993); Victor C.W. Wong, The Political Economy of
Health Care Development and Reforms in Hong Kong (Aldershot: Ashgate, 1999),
Chapter 4.
22. Morris and Scott, op. cit.
23. Twenty-five of the interviews were conducted between 1998 and 2002. A further seven
were conducted in 2006 and 2007.
175176.
25. Census and Statistics Department, Hong Kong Annual Digest of Statistics (Hong Kong:
26. Tsoi Keon-wah, Poverty Eradication and Social Security in Hong Kong in Advances
in Social Welfare in Hong Kong, eds. Daniel T.L. Shek et al. (Hong Kong: The Chinese
University Press, 2002), 124.
27. Liu Pak Wai, Financing the CSSA Scheme, www.tdctrade.com/econforum (2000).
1997), 40.
29. Social Welfare Department, Review of the Comprehensive Social Security Assistance
(CSSA) Scheme, www.hwfb.gov.hk/hw (1998), Annex 1.
30. Ibid., 3.
31. Ibid., 35.
32. Ibid., 5.
33. Ibid., 3536, passim; Kenneth L. Chau and Chack-kie Wong, The Social Welfare
Reform: A Way to Reduce Public Burden? in The First Tung Chee-hwa Administration,
ed. Lau Siu-kai (Hong Kong: The Chinese University Press, 2002), 209213.
34. Social Welfare Department (1998), op. cit., 4
35. Census and Statistics Department (2003), op. cit.; Social Welfare Department, CSSA
recipients encouraged to move towards greater self-reliance, Press Release, October
9, 2003.
ch.13 Notes(p.307-359).indd 339
11/4/09 4:32:40 PM
36. Social Welfare Department (1998), op. cit., 4; Tsoi, op. cit., 125; Hong Kong Standard,
Lam warns of drastic steps if benefits not cut, Hong Kong Standard, November 12,
2002.
37. Census and Statistics Department (2003), op. cit.
38. Ibid.; Social Welfare Department (2003), op. cit.
39. Carrie Lam, Will we have to cope with less? SCMP, October 24, 2002.
40. Ibid.
41. Ibid.
42. Legislative Council, Panel on Welfare Services, Minutes of the Meeting held on Monday
11th November 2002 (Hong Kong: mimeo, 2002), 14.
43. Ibid., 1314.
44. Christine Fang, Why we should not cut social welfare, SCMP, November 15, 2002.
45. Ibid.
46. Government of the HKSAR, ExCo endorses rate adjustment of CSSA and SSA, Press
47. Hansard, February 26, 2003, 4148.
48. Ibid., 4144.
49. Ibid., 4161.
50. Ibid., 41494151.
51. Ibid., 41654168.
52. Ibid., 4178.
53. Chris Yeung, Rising heat, SCMP, February 26, 2003; Legislative Council, Panel on
Welfare Services, Minutes of the 16th meeting (Hong Kong: mimeo, June 27, 2003).
54. Ella Lee, I hate being known as the figures lady, SCMP, October 30, 2003.
55. Tung (1997), op. cit., passim.
56. Tung Chee-hwa, I will bring solutions to our problems, SCMP, December 14, 2001.
57. Tung Chee-hwa, Building on Our Strengths, Investing in Our Future (Hong Kong:
Printing Department, 2001): 3539; Tung Chee-hwa, Capitalising on Our Advantages,
Revitalising Our Economy (Hong Kong: Government Printer, 2003), 1418; Tung Cheehwa, Seizing Opportunities for Development, Promoting People-based Governance
(Hong Kong: Government Logistics Department, 2004), 215.
58. Anthony B.L. Cheung, New Interventionism in the Making: Interpreting State
Interventions in Hong Kong after the Change of Sovereignty, Journal of Contemporary
China 9(24) (2000), 291308.
59. See, for example, Christine Loh, An Alternative Policy Address: 20072008, www.
civic-exchange.org (2007).
60. Ian Scott, The Disarticulation of the Hong Kongs Post-Handover Political System,
The China Journal, No. 43 (January 2000), 2953.
61. Kingdon, op. cit., 71.
62. Scott (2007) op. cit.; Cheung (2007), op. cit.
63. Elaine Chan, Beyond Pedagogy: Language and Identity in Post-colonial Hong Kong,
British Journal of Sociology of Education 23(2) (2002), 271285; Morris and Scott,
op. cit.
64. Education and Manpower Bureau, Consultation Document on the Review of Education
Executive and Advisory Bodies (Hong Kong: Printing Department, 1998); Health and
Welfare Bureau, Consultation Document on the Development of Traditional Chinese
Medicine in the Hong Kong Special Administrative Region (Hong Kong: Printing
Department, 1997).
ch.13 Notes(p.307-359).indd 340
11/4/09 4:32:40 PM
65. Tung (1997), op. cit., 19; Leo Goodstadt, Uneasy Partners: The Conflict between
Public Interest and Private Profit in Hong Kong (Hong Kong: Hong Kong University
Press, 2005), 134135; Joan Y.H. Leung and Ho-mun Chan, The School Management
Reform in Hong Kong: Administrative Control in a New Cloak of Managerialism in
Public Sector Reform in Hong Kong: Into the 21st Century, eds. Anthony B.L. Cheung
and Jane C.Y. Lee (Hong Kong: The Chinese University Press, 2001).
66. Tung Chee-hwa, Working Together for Economic Development and Social Harmony
67. Donald Tsang, Strong Governance for the People (Hong Kong: Government Logistics
Department, 2005), para 17; www.cop.gov.hk (accessed November 5, 2008). The
Commission on Povertys term ended in June 2007.
68. Raymond Ngan and Mark Kin-yin Li, Responding to Poverty, Income Inequality and
Social Welfare: The Neo-Liberalist Government versus a Social Investment State in
The Hong Kong Special Administrative Region in Its First Decade, ed. Joseph Y.S.
Cheng (Hong Kong: The City University Press, 2007), 554559.
69. Ma Ngok, op. cit., Appendix V.
70. Joseph C.W. Chan et al., From Consultation to Civic Engagement: The Road to Better
Policy-making and Governance in Hong Kong (Hong Kong: Bauhinia Foundation
Research Centre, March, 2007).
71. Legislative Council Brief, Smoking (Public Health) (Amendment) Bill 2005, HWF
CR52/581/89 Pt 56 (Hong Kong: mimeo, 2005).
72. Legislative Council, Panel on Education, Progress of the Study on Small Class Teaching,
LC Paper No. CB (2)1041/0607(01) (Hong Kong: mimeo, February 2007).
73. Mark Bovens and Pault Hart, Understanding Policy Fiascoes (New Brunswick:
Transaction Publishers, 1996), 15.
74. Constitutional Affairs Bureau, Legislative Council Paper: Accountability System for
Principal Officials (Hong Kong: The Bureau, April 17, 2002), 6.
75. Gary Cheung, Landmark merger of universities agreed, SCMP, October 5, 2002.
76. Ibid.
77. Hong Kong Economic Times, Should someone refuse, the government would take
action, October 5, 2002; SCMP, Merger confusion, editorial, October 8, 2002.
78. Stewart R. Sutherland, Report of the University Grants Committee (Commissioned by
the Secretary for Manpower and Education) (Hong Kong: Printing Department, March
2002), 5.
79. Education and Manpower Bureau, Legislative Council Brief: Higher Education Review
and Rolling Over the 2001/02 to 2003/04 Triennium to the 2004/05 Academic Year,
EMB CB3/1/2041/89 (Hong Kong: mimeo, November 2002); Sutherland, op. cit., viii
ix.
80. Education and Manpower Bureau (2002), op. cit., 5.
81. Yeung (October 5, 2002), op. cit.
82. Polly Hui, Students strongly opposed to link, SCMP, October 9, 2002; Polly Hui and
Linda Yeung, Opponents launch signature campaign, SCMP, October 8, 2002.
83. Sunday Morning Post, Students oppose merger, November 17, 2002.
84. Gary Cheung, University merger plans put on hold, SCMP, December 9, 2002.
85. Government of the HKSAR, CEs speech at Chinese University of Hong Kong 40th
anniversary banquet, Press Release, December 6, 2003.
86. University Grants Committee, Hong Kong Higher Education: To Make A Difference:
To Move With The Times (Hong Kong: The Committee, January 2004), 5, 8.
ch.13 Notes(p.307-359).indd 341
11/4/09 4:32:40 PM
87. Ibid., Appendix B.

88. SCMP (October 8, 2002), op. cit.
89. Government of the HKSAR, Inaccurate news report dismissed, Press Release,
October 4, 2002.
Chapter 9
1. Brian W. Hogwood and Lewis A. Gunn, Policy Implementation for the Real World
(Oxford: Oxford University Press, 1984), 196218.
2. Ibid.
3. Christopher Hood, The Tools of Government (London: Macmillan, 1983); B. Guy Peters
and Frans K.M. Van Nispen, eds., Public Policy Instruments (Cheltenham: Edward
Elgar, 1998); Marie Louise Bemelmans-Videc, Ray C. Rist and Evert Vedung, eds.,
Carrots, Sticks and Sermons: Policy Instruments & Their Evaluation (New Brunswick,
N.J.: Transaction, 1998).
4. Amatai Etzioni, A Comparative Analysis of Complex Organisations (New York: Free
Press. 1961), 5; Evert Vedung, Policy Instruments: Typologies and Theories in
Bemelmans-Videc et al., op. cit., 28.
5. Ibid., 2930.
6. See www.lscd.gov.hk/healthy/en/index.php (accessed November 9, 2008).
7. Hansard, October 24, 2007, 379381.
8. Jimmy Cheung, Jockey Club wins soccer betting rights, SCMP, November 27,
2002.
9. Legislative Council, Panel on Home Affairs, Minutes of the Meeting of 12th December
2003, LC Paper No. CB (2) 913/03/03 (Hong Kong: mimeo, 2003), 713.
10. See, inter alia, Government of the HKSAR, Speech by CE at joint chambers luncheon,
Press Release, January 10, 2003.
11. Ian Scott, Policy Implementation in Hong Kong, Southeast Asian Journal of Social
Science 15(2) (1987), 17.
12. Ian Scott, Efficiency and Effectiveness in the Enforcement of the Drug Laws in Hong
Kong in Asian Civil Service Systems: Improving Efficiency and Productivity, ed. John
P. Burns (Singapore: Times Academic Press, 1994), 241249.
13. See Alan Smart, The Shek Kip Mei Myth: Squatters, Fires and Colonial Rule in Hong
Kong, 19501963 (Hong Kong: Hong Kong University Press, 2006).
14. Executive Council, Seven-Year Primary Expansion Programme, Memorandum XCC
57 (Hong Kong: mimeo, August 2, 1954).
15. So Kam Tong, Bernie, The Hong Kong Police as a New Paradigm of Policing in a Post
Colonial City: An Analysis of Reform Achievement (Unpublished MPA dissertation,
16. Ibid., 7375. See also Carlos W.H. Lo and Albert C.Y. Cheuk, Community Policing in
Hong Kong: Development, Performance and Constraints, Policing: An International
Journal of Police Strategy and Management 27(1) (2004), 97127.
17. Jim Kwok Kai-chiu, The Performance Management System of the Customs and Excise
Department (Unpublished MPA dissertation, Hong Kong: University of Hong Kong,
1997).
18. Ian Scott, Administering the New Towns of Hong Kong, Asian Survey 22(2)
(July1982), 659675.
ch.13 Notes(p.307-359).indd 342
11/4/09 4:32:40 PM
19. District Commissioner, Memorandum to the Colonial Secretary in NT 4811: C, April

19, 1973.
20. Joan Y.H. Leung, State and Society: The Emergence and Marginalization of Political
Parties in Hong Kong (Unpublished PhD thesis, Hong Kong: University of Hong Kong,
1999), 154.
21. Chan Yuen Tak-fai, Dorothy, A Study of Transport Policy Formulation in Hong Kong
(Unpublished PhD thesis, Hong Kong: University of Hong Kong, 1989), 271272.
22. Ibid., 276277.
25. S.F. Borins, Electronic Road Pricing: An Idea Whose Time May Never Come,
Transport Research 22A(1) (1988), 3744; Chan, op. cit., 329.
26. Denny Kwok Leung Ho, The Rise and Fall of Community Mobilization: The Housing
Movement in Hong Kong in The Dynamics of Social Movement in Hong Kong, eds.
Stephen Wing Kai Chiu and Tai Lok Lui (Hong Kong: Hong Kong University Press,
2000), 201.
27. Victor C.W. Wong, The Political Economy of Health Care Development and Reforms
(Aldershot: Ashgate, 1999), 154.
28. Paul Morris, The Management of Participation in the Policy-making Process: The
Case of the Education Commission in Hong Kong, Journal of Education Policy 11(3)
(1996), 319336.
29. Joan Y.H. Leung and Ho-mun Chan, The School Management Reform in Hong Kong:
Administrative Control in a New Cloak of Managerialism in Public Sector Reform
in Hong Kong: Into the 21st Century, eds. Anthony B.L. Cheung and Jane C.Y. Lee
(Hong Kong: The Chinese University Press, 2001); Elaine Chan, Beyond Pedagogy:
Language and Identity in Post-colonial Hong Kong, British Journal of Sociology of
Education 23(2) (2002), 271285; Paul Morris, Promoting Curriculum Reform in the
Context of the Political Transition: An Analysis of Hong Kongs Experience, Journal
of Education Policy 17(1) (2002), 1328; Paul Morris and Ian Scott, Education Reform
and Policy Implementation in Hong Kong, Journal of Education Policy 18 (1) (2003),
7184.
30. Flora Kan and Edward Vickers, One Hong Kong, Two Histories: History and
Chinese History in the Hong Kong School Curriculum, Comparative Education 38
(1) (2002), 7389; Morris and Scott, op. cit.
31. Grace C.L. Mak, Primary and Secondary Education in The Other Hong Kong Report,
eds. Nyaw Mee-kau and Li Si-ming (Hong Kong: The Chinese University Press, 1996);
Polly Hui, Please, please, no more EC reports or school reforms, SCMP, December
20, 2003.
32. Robin Gauld and Derek Gould, The Hong Kong Health Sector: Development and
Change (Hong Kong: The Chinese University Press, 2002), 73.
33. Memorandum of Understanding Concerning the Construction of the New Airport in
Hong Kong and Related Questions (Hong Kong: mimeo, July 4, 1991).
34. Ian Scott, The Disarticulation of the Hong Kongs Post-Handover Political System,
The China Journal, No. 43 (January 2000), 2953; Hansard, February 11, 1998, 143
180.
ch.13 Notes(p.307-359).indd 343
11/4/09 4:32:40 PM
36. Chiu Yu-chow, An Analysis of Policy Agenda-Setting in Hong Kong: The Avian Flu
Case (Unpublished MPA dissertation, Hong Kong: University of Hong Kong, 1999),
23.
37. Ibid., 37. See also Ahmed Shafiqul Huque and Grace O.M. Lee, Managing Public
Services: Crises and Lessons from Hong Kong (Aldershot: Ashgate, 2002), 4864.
38. SARS Expert Committee, SARS in Hong Kong: From Experience to Action: Report of
the SARS Expert Committee (Hong Kong: Information Services Department); Hospital
Authority Review Panel, Report of the Hospital Authority Review Panel on the SARS
Outbreak (Hong Kong: The Authority, September 2003); Legislative Council, Report
of the Select Committee into the Handling of the Severe Acute Respiratory Syndrome
Outbreak by the Government and the Hospital Authority, www.legco.gov.hk (July
2004).
39. Christine Loh, The Politics of SARS: The WHO, Hong Kong and Mainland China
in At the Epicentre: Hong Kong and the SARS Outbreak, eds. Christine Loh and Civic
Exchange (Hong Kong: Hong Kong University Press, 2004), 143.
40. SARS Expert Panel, op. cit., 67.
41. Loh, op. cit.
42. Legislative Council, Report of the Select Committee (2004), op. cit., 251252.
43. Ibid., 253.
44. Loh., op. cit., 160.
45. Legislative Council, Report of the Select Committee (2004), op. cit., 247.
46. Government of the HKSAR, HWFBs statement on HAs SARS Report, Press
Release, October 16, 2003.
47. SARS Expert Panel, op. cit., 72.
48. Michael E. DeGolyer, How the Stunning Outbreak of Disease Led to a Stunning
Outbreak of Dissent in At the Epicentre: Hong Kong and the SARS Outbreak, eds.
Christine Loh and Civic Exchange (Hong Kong: Hong Kong University Press, 2004),
130133.
49. Hong Kong Housing Authority, Report of the Investigation Panel on Accountability
Piling Contract 166/1997 of Shatin Area 14B Phase 2 (Hong Kong: The Authority,
May 25, 2000), 12; Government of the HKSAR, Defective piling blocks to be
demolished, Press Release, March 16, 2000.
50. Ibid.
51. Hansard, June 28, 2000, 9325.
52. Hong Kong Housing Authority, op. cit., 8.
53. Eliza W.Y. Lee, The New Hong Kong International Airport Fiasco: Accountability
Failure and the Limits of New Managerialism, International Review of Administrative
Sciences 6(1) (2000), 5772; John P. Burns, Government Capacity and the Hong Kong
Civil Service (Hong Kong: Oxford University Press, 2004), 163164.
54. Government of the HKSAR, Report of the Commission of Inquiry on the New Airport
(Hong Kong: Printing Department, 1999); Office of the Ombudsman, Executive
Summary of the Report of the Investigation into the Commissioning and Operation of
the New Airport at Chep Lap Kok (Hong Kong: Printing Department, January 1999);
Legislative Council, Report of the Select Committee to Inquire into the Circumstances
Surrounding the Opening of the New Hong Kong International Airport at Chep Lap
Kok since 6 July 1998 and related issues, Vol. 1 (Hong Kong: Printing Department,
January 1999).
55. Ibid., 49, 187.
ch.13 Notes(p.307-359).indd 344
11/4/09 4:32:41 PM
56. Government of the HKSAR (1999), op. cit., 637.

57. Morris and Scott, op. cit.
58. Tung (1997), op. cit., 2935; Tung Chee-hwa, Quality People, Quality Home:
Positioning People for the 21st Century (Hong Kong: Printing Department, 1999),
1926; Tung Chee-hwa, Serving the Community, Sharing Common Goals (Hong
Kong: Printing Department, 2000), 1725; Education Commission, Learning for Life,
Learning through Life: Reform Proposals for the Education System in Hong Kong
(Hong Kong: Printing Department, September 2000), passim. See also Lok Sang Ho
et al., eds., Education Reform and the Quest for Excellence: The Hong Kong Story
(Hong Kong University Press, 2005).
59. Morris and Scott, op. cit.; Kan and Vickers, op. cit.; Edward Vickers, In Search of
an Identity: The Politics of History as a School Subject in Hong Kong 1960s2002
(New York: Routledge, 2003); Kwok-chan Lai, Kwok-wai Ko and Elizabeth Lai-man
Cheung, Implementation of Graduate Teacher Policy in Hong Kong Primary Schools:
Promises and Disillusionment in Lok Sang Ho, op. cit.
60. Chan, op. cit., 276279.
61. See www.lamma.com.hk, My Lamma Monthly E-zine, 21 (April 28, 2003).
62. See www.saveourshorelines.bizland.com/project02.html (accessed October 10, 2008).
63. Brian Brewer and Adrienne La Grange, Whose Views Matter? Reforming Public
Housing Policy in Hong Kong, Public and Social Administration Working Paper Series
(Hong Kong: City University of Hong Kong, 2001), 32.
64. See www.saveourshorelines.bizland.com/project02.html (accessed October 10, 2008).
65. A. So, Deal reached in Big Buddha row, SCMP, October 25, 2002.
66. Winston Chu, A shrinking asset, SCMP, September 20, 2003.
67. Ravina Shamdasami, Harbour activists take to the streets, SCMP, September 23,
2003.
68. Sara Bradford, Reclamation court fight opens, SCMP, October 4, 2003.
69. Michael Suen, Balancing public interests, SCMP, October 15, 2003.
70. Government of the HKSAR, Government welcomes High Court judgment on Central
Reclamation Phase III, Press Release, March 9, 2004.
71. Ibid.
html, para 71.
73. Government of the HKSAR, CEs remarks on the Old Age Allowance, Press Release,
October 24, 2008.
74. Government of the HKSAR, Speech by the SFST at the 9th Hong Kong Forum, Press
Release, October 31, 2008; Peggy Leung, Financial services chief to be first to face
panel on minibonds fiasco, SCMP, January 22, 2009.
75. Hansard, November 5, 2003, 907.
76. Director of Audit, Report No. 42 (Hong Kong: Government Logistics Department,
March 2004), 6065.
77. James W. Fesler and Donald F. Kettl, The Politics of the Administrative Process, 2nd
edition (Chatham, N.J.: Chatham House, 1996), 285.
78. Government of the HKSAR, Progress Report on Policy Objectives (2001) (Hong Kong:
Printing Department, December 2002), iii.
79. Ibid., 4(6), 20(2), 13(2).
80. Director of Audit, Report No. 45 (Hong Kong: Government Logistics Department,
October 2005), Chapter 6, p. 8.
ch.13 Notes(p.307-359).indd 345
11/4/09 4:32:41 PM
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
Ibid.
Ibid., 10.
Ibid., 16.
Ibid., 36.
Ibid., 2022.
Ibid., Part 3.
See www.info.gov.hk/aud.
Ibid.; Director of Audit, Report No. 39 (Hong Kong: Printing Department, October,
2002), 89.
Ibid., Chapter 8, v.
Hansard, February 23, 2000, 4126; Director of Audit (2002), op. cit., Chapter 8, vvi.
Director of Audit, Report No. 48 (Hong Kong: Government Logistics Department,
2007), Chapter 7.
Ibid., passim.
Ibid., 42.
Director of Audit (2004), op. cit.
Home Affairs Bureau, Report of the HAB Telephone Survey-August 2003, www.info.
gov.hk/hab (August 2003), 14.
Government of the HKSAR, LCQ1: public opinion survey, Press Release, February
18, 2004.
Public Opinion Programme, Peoples Satisfaction with the Hong Kong Government,
www.hkupop.hku.hk (October 2008).
Ibid.
Hong Kong Transition Project, Accountability & Article 23: Freedom, Fairness and
Accountability in Hong Kong (Hong Kong: The Project, December 2002), 72.
World Bank, Governance Matters IV: Governance Indicators for 19962004
(Washington, DC: World Bank, 2005).
Office of the Ombudsman, Administrative Fairness Checklist, 3rd edition (Hong Kong:
Printing Department, 2001), 5, my italics.
Chapter 10
1. Anthony B.L. Cheung, Public Sector Reform and the Re-legitimation of Public
Bureaucratic Power: the Case of Hong Kong, International Journal of Public Sector
Management 9 (5/6) (1996), 3750.
2. See Tung Chee-hwa, Seizing Opportunities for Development, Promoting People-based
Governance (Hong Kong: Government Logistics Department, 2004), 2224; Tung
Chee-hwa, Working Together for Economic Development and Social Harmony (Hong
Kong: Government Logistics Department, 2005), 910.
3. T.T. Lui, Efficiency as a Political Concept in the Hong Kong Government: Issues and
Problems in Asian Civil Service Systems: Improving Efficiency and Productivity, ed.
John P. Burns (Singapore: Times Academic Press, 1994), 18.
Expanding Services (Hong Kong: mimeo, May 1973), 5.
5. Ibid., 8.
103.
ch.13 Notes(p.307-359).indd 346
11/4/09 4:32:41 PM
Appendix 25; Hong Kong Government, Hong Kong 1983, op. cit., Appendix 26.
8. Hong Kong Government, Hong Kong 1974, op. cit., Appendix 26; Hong Kong
Government, Hong Kong 1983, op. cit., Appendix 27.
9. Hong Kong Government, Hong Kong 1974, op. cit., Appendix 19; Hong Kong
Government, Hong Kong 1983, op. cit., Appendix 20.
Appendix 6; Hong Kong Government, Hong Kong 1983, op. cit., Appendix 6.
11. See Robin Hutcheon, Bedside Manner: Hospital and Health Care in Hong Kong (Hong
Kong: The Chinese University of Hong Kong Press, 1999), Chapters 3, 4; Adrienne
La Grange, Housing (19972007) in The Hong Kong Special Administrative Region
in Its First Decade, ed. Joseph Y.S. Cheng (Hong Kong: The City University of Hong
Kong Press, 2007), 701.
12. See, for example, Terri Mottershead, Sustainable Development in Hong Kong: A Road
Yet to be Travelled in Sustainable Development in Hong Kong, ed. Terri Mottershead
(Hong Kong: Hong Kong University Press, 2004), 93; Transport Branch, Transport in
Hong Kong: A Review of 1989 (Hong Kong: Transport Branch, 1989); Working Party
on Social Welfare Policies and Services, Social Welfare into the 1990s and Beyond
(Hong Kong: Government Printer, 1990).
13. Finance Branch, Public Sector Reform (Hong Kong: The Branch, 1989), 1.
14. Efficiency Unit, Overview of Reform, www.eu.egov.hk (accessed November 28,
2008).
15. Chris Patten, Our Next Five Years: The Agenda for Hong Kong (Hong Kong: Government
Printer, 1992), 26; Chris Patten, East and West (London: Macmillan, 1998), 46; Hong
Kong Government, Serving the Community (Hong Kong: Government Printer, 1995).
16. Cheung, op. cit., 38.
17. Organisation for Economic Co-operation and Development, Administration as Service:
The Public as Client (Paris: OECD, 1987), 131.
18. Hong Kong Government (1995), op. cit., 7; Hong Kong Government, The Hong Kong
Government Serving the Community, Briefing to the Legislative Council by the Chief
Secretary (Hong Kong: Government Printer, February10, 1995), 4.
19. Patten (1992), op. cit., 26.
20. Ibid., 2627.
21. Patten (1992), op. cit., 27.
22. Chris Patten, Hong Kong: Todays Successes, Tomorrows Challenges (Hong Kong:
23. Efficiency Unit, The Service Imperative (Hong Kong: Government Printer, 1996);
Efficiency Unit, Performance Pledges, www.info.gov.hk/eu (2001).
24. Social Welfare Department, Performance Pledge (Hong Kong: Government Printer,
n.d.), 2.
25. Fire Services Department, Performance Pledge, 1994 (Hong Kong: Government
Printer, 1994), 14.
26. Housing Department, Performance Pledge 1994 (Hong Kong: The Department, 1994);
Trade Department, Performance Pledge 1994 (Hong Kong: The Department, 1994);
Water Supplies Department, Serving the Community: Performance Pledge (Hong
Kong: The Department, 1994).
27. Patten (1992), op. cit., 26.
28. Efficiency Unit (1996), op. cit., 9.
ch.13 Notes(p.307-359).indd 347
11/4/09 4:32:41 PM
29. Education Department, Performance Pledges (Hong Kong: The Department, n.d.), 1,
3.
30. Labour Department, Performance Pledge (Hong Kong: Government Printer, n.d).
31. Ibid., 2.
32. Nora Ting Lai King, An Efficient and Courteous Service in a Clean and Friendly
Environment: A Case Study on the Performance Pledge of the Labour Department,
(Hong Kong: mimeo, 1994), 810.
33. Ian Scott, Public Sector Reform and Middle Managers in Hong Kong, Asian Journal
of Public Administration 22(2) (December 2000), 124.
34. Ibid., 122.
35. Terry T. Lui and Terry L. Cooper, Bureaucracy, Democracy and Administrative Ethics:
A Study of Public Service Values in Hong Kong, International Review of Administrative
Sciences 62(2) (1996), 187.
36. Scott (2000), op. cit.
37. Hong Kong Government, The Hong Kong Government Serving the Community (1995),
op. cit., 7.
38. Cheung, Public Sector Reform (1996), op. cit.
39. Royal Hong Kong Police, Directive: Neighbourhood Policing (Hong Kong: mimeo,
1975); Carlos Wing-Hung Lo and Albert Chun-Yin Cheuk, Police-Public Projects
in Hong Kong: An Evaluation, The Asian Journal of Public Administration 25(2)
(December 2003), 296299; Carlos Wing-Hung Lo and Albert Chun-Yin Cheuk,
Community Policing in Hong Kong: Development, Performance and Constraints,
Policing : An International Journal of Police Strategies and Management 27(1) (2004),
97127
40. So Kam Tong, Bernie, The Hong Kong Police as a New Paradigm of Policing in a Post
Colonial City: An Analysis of Reform Achievement (Unpublished MPA dissertation,
41. Ibid.
42. Ibid.; Commissioner of Police, Royal Hong Kong Police Review (Hong Kong:
Government Printer, 1996).
43. So, op. cit., 51.
44. MDR Technology Ltd., Opinion Survey on the Quality of Police Services: A Report
(Hong Kong: The Company, 1998).
45. Ibid., 8.
46. Hong Kong Police Force, Vision and Statement of Common Purpose and Values (Hong
Kong: mimeo, 1996).
47. Provisional Legislative Council, Panel on Security, Customer Satisfaction Survey of the
Police Force, www.legco.gov.hk/yr 9798 (July 25, 1997), 12.
48. Ibid., 2.
49. Social Science Research Centre, Public Opinion Programme, Public Opinion Survey
on the Public Image of the Hong Kong Police Force: Survey Report (Hong Kong: The
Centre, 1999), 18, 22.
50. Census and Statistics Department, Crime and Its Victims in Hong Kong in 2005,
Thematic Household Survey Report Report No. 31 (May 2007), www.censtatd.gov.
hk, 23.
51. Ibid., 24.
52. Lo and Cheuk (2003), op. cit., 291292.
ch.13 Notes(p.307-359).indd 348
11/4/09 4:32:42 PM
53. Ibid., 305. See also Michael Chiu Kai-ting, The Significance of a Value-driven
Competency-based Performance Management System: Key Issues with Reference
to Developments in the Hong Kong Police Force, The Asian Journal of Public
Administration 24 (2) (2002), 235253, who describes the vision statement as causing
confusion and an excessive amount of administrative work. See also Allan Jiao, The
Police in Hong Kong: A Contemporary View (Lanham, Md: United Press of America,
2007), passim.
54. Government of the HKSAR, Response to frequently asked questions on the Public
Order Ordinance, Press Release, October 25, 2000. See also Sonny Lo Shiu-hing,
The Politics of Policing the Anti-WTO Protests in Hong Kong, Asian Journal of
Political Science 14 (2) (December 2006), 140162.
55. See, for example, Legislative Council, Panel on Welfare Services, Minutes of the 19th
Meeting, www.legco.gov.hk, January 22, 2008.
56. See, for example, Chester Yung and Jeannette Ng, Tin Shui Wais growing underclass,
The Standard, July 25, 2005.
57. Hong Kong Government, Hong Kong 2007 (Hong Kong: Government Logistics
58. Government of the HKSAR, Statement by Secretary for Housing, Planning and
Lands, Press Release, November 13, 2002. On the Home Ownership Scheme, see
Adrienne La Grange and Yip Ngai Ming, Social Belonging, Social Capital and the
Promotion of Home Ownership, Housing Studies 16(3) (2001), 291310.
59. Hong Kong Government (2007), op. cit., 205; Secretary for Housing, Planning and
Lands, Speech at the Asia-Pacific Network for Housing Research Conference, Press
60. Yip Ngai-ming and Lau Kwok-yu, Housing in Social Policy in Hong Kong, eds.
Paul Wilding, Ahmed Shafiqul Huque and Julia Tao Lai Po-wah (Cheltenham: Edward
Elgar, 1997), 4243.
61. Denny Kwok Leung Ho, The Rise and Fall of Community Mobilization: The Housing
2000), 201.
62. Hong Kong Housing Authority, Know your rights and responsibilities, www.housing
authority.gov.hk (2003).
63. James Lee, Constructing Consumer Identity and Responsible Citizens: Public Housing
Governance in Post-Colonial Hong Kong, Paper presented to a workshop How
Governments Become Responsible, City University of Hong Kong, March 12, 2007.
See also Kwong Tsz Man and Johnnie C.K. Chan, Community Development and
Residents Participation in Housing Management in Professional Housing Practices
in Hong Kong, ed. Rebecca Lai-har Chiu (Hong Kong: Hong Kong University Press,
2006), 176.
1997), 18.
65. Housing Bureau, Homes for Hong Kong People into the 21st Century, A White Paper
on Long Term Housing Strategy in Hong Kong (Hong Kong: Printing Department,
1998); Brian Brewer and Adrienne La Grange, Whose Views Matter? Reforming Public
Housing Policy in Hong Kong, Public and Social Administration Working Paper Series
(Hong Kong: Department of Public and Social Administration, City University of Hong
Kong, 2001), 1718.
ch.13 Notes(p.307-359).indd 349
11/4/09 4:32:42 PM

68. Hong Kong Housing Authority, Annual Report 2007/2008, www.housingauthority.gov.
hk, 17.
69. Ibid., 42.
70. Raymond Ng Kwok-ming, Administrative Reform: The Case of the Hospital Authority
(Unpublished MPA dissertation, Hong Kong: University of Hong Kong, 1992), 46.
71. See Iris Chan and Mary Ann Benitez, Changing Patient Expectations in Hong Kongs
Health System: Reflections, Perspectives and Visions, eds. Gabriel M. Leung and John
Bacon-Shone (Hong Kong: Hong Kong University Press, 2006), 8485.
72. Susanna Ko Yuk-ying, An Analysis of Performance Pledges and Customer Service
in the Hospital Authority (Unpublished MPA dissertation, Hong Kong: University of
Hong Kong, 1995), 75.
73. See www.dh.gov.hk/aboutus.
74. Efficiency Unit (1996), op. cit., 21; Monitoring of Customer Feedback, www.info.
gov.hk/dh (2004).
75. Ian Holliday and Tam Wai-keung, Fragmentation and the Hong Kong Health Care
System: Myth and Reality, The Asian Journal of Public Administration 22(2)
(December 2000), 170172.
76. The Harvard Team, Improving Hong Kongs Health Care System: Why and for Whom?
(Hong Kong: Printing Department, 1999), 46.
77. Ibid., 5.
78. Holliday and Tam, op. cit., 178179.
79. Food and Health Bureau, Your Health, Your Life (Hong Kong: Government Logistics
Bureau, 2008).
80. Ibid., 93.
81. Colleen Lee and Peggy Yeung, Public forced to make up for funding cuts, says rights
group, SCMP, March 13, 2008; Ella Lee, Health-care reform must go ahead, says
Chow, SCMP, March 21, 2008
82. See Chan and Benitez, op. cit.
83. Mark R. Hayllar, Reforms to Enhance Accountability and Citizen Involvement: A
Case Study of the Hong Kong Hospital Authority, International Journal of Public
Administration 22(3/4) (1999), 461498.
84. Health and Medical Development Advisory Committee, Building a Healthy To-morrow;
Discussion Paper on Future Service Delivery for our Health Care System, www.fhb.
gov.hk (2005).
85. Peter P. Yuen and Geoffrey S.Y. Lieu, Hospital Governance: An Assessment by
Governing Committee Members and Chief Executives of Hong Kongs Public
Hospitals, Public Administration and Policy 12(1) (March 2003), 79.
86. Ibid.
87. Highways Department, Performance Pledge 2006 (Hong Kong: Government Logistics
88. See Director of Audit, Report No. 45 (Hong Kong: Government Logistics Department,
October 2005), Chapter 6, Part 3.
89. Eliza W.Y. Lee and M. Shamsul Haque, The New Public Management Reform and
Governance in Asian NICS: A Comparison of Hong Kong and Singapore, Governance
19(4) (October 2006), 619.
90. Efficiency Unit, Serving the Community by Using the Private Sector: A General Guide
to Outsourcing, 3rd edition (March 2008), www.eu.gov.hk, 7.
ch.13 Notes(p.307-359).indd 350
11/4/09 4:32:42 PM
91. Commerce and Economic Development Bureau, 2008 Digital 21 Strategy, www.
digital21.gov.hk (December 2007), 21.
92. Ibid., 53.
93. Information Technology and Broadcasting Bureau, E-government Benefits Us All (Hong
Kong: The Bureau, 2002), 9.
94. Ibid., 1421.
95. Commerce and Economic Development Bureau (2008), op. cit., 54.
96. Michael V. Stone, What practical value has Hong Kong obtained from implementing
a Digital Administration? Speech to the Danish E-government Forum: Digitaliserising
2003, www.info.gov.hk/digital21/e-gov (May 20, 2003), 1.
97. Ibid.
98. See Efficiency Unit, Public Sector Reform, www.eu.gov.hk (accessed December 9,
2008).
99. Office of the Ombudsman, Ombuds News No. 2 (Hong Kong: The Office of the
Ombudsman, July 2, 2003), Appendix D.
100. Ibid.
101. Ibid.
102. Office of the Ombudsman, Direct Investigation on Effectiveness of the Integrated Call
Centre in Handling Complaints, www.ombudsman.gov.hk/direct_investigation2.html
(June 2008).
103. Ibid., 5.
104. Ibid., 8.
105. HKSAR Government, Integrated Call Centre to improve handling of complaints,
106. Census and Statistics Department, Thematic Household Survey Report Report No.
32, www.censtatd.gov.hk (December 2007), 37, 145.
107. Ibid., 38.
108. Ibid., 37
110. Tung Chee-hwa, Building on our Strengths, Investing in Our Future (Hong Kong:
111. Efficiency Unit, www.info.gov.hk/eu (accessed 2003).
112. Civil Service Bureau, Customer Service Excellence in the Civil Service (Hong Kong:
The Bureau, 2000); Secretary for the Civil Service, Government pledge to provide
quality customer service, Civil Service Bureau, November 2, 2001.
113. Efficiency Unit, www.info.gov.hk/eu, op. cit.
114. Efficiency Unit, Citizen Centric Services Programmes, www.eu.gov.hk.
115. Tung Chee-hwa (2001), op. cit., 38.
116. Tung Chee-hwa (2001), op. cit., 40.
117. Tung Chee-hwa, Seizing Opportunities for Development, Promoting People-based
Governance (Hong Kong: Government Logistics Department, 2004), 24.
119. See Central Policy Unit, Commission on Strategic Development, www.cpu.gov.hk;
Administrative and Civic Affairs, Commission on Poverty Members Named, www.
news.gov.hk, January 27, 2005.
html, para 122.
ch.13 Notes(p.307-359).indd 351
11/4/09 4:32:42 PM
121. www.info.gov.hk.cstdi (accessed November 2002). The Civil Service Training and
Development Institute was incorporated into the Civil Service Bureau on April 1,
2004.
122. Hansard, April 25, 2007, 5797. See also Elaine Chan and Joseph Chan, The First Ten
Years of the HKSAR: Civil Society Comes of Age, The Asia Pacific Journal of Public
Administration 29(1) (2007), 80.
124. Ibid.
125. Hansard, March 25, 1999, passim; Ahmed Shafiqul Huque and Grace O.M. Lee,
Managing Public Services: Crises and Lessons from Hong Kong (Aldershot: Ashgate,
2002), 6677.
126. See Popularity of the Chief Executive and Satisfaction with the HKSAR
Government, www.hkupop.hku.hk.
127. Independent Investigation Panel, Report to the Council of the University of Hong Kong,
www.hku.hk/reportip (2000), 5.
128. Ibid., 30. See also Jan Currie, Carole J. Petersen and Ka Ho Mok, Academic Freedom
in Hong Kong (Lanham, MD: Lexington Books, 2006), Chapter 3.
129. SCMP, Scrutiny of Bill makes a mockery of the system, editorial, June 16, 2003.
130. Secretary for Constitutional Affairs, Government to work with community, Press
Release, July 10, 2003.
131. See, for example, Joseph C.W. Chan et al., From Consultation to Civic Engagement: The
Road to Better Policy-making and Governance in Hong Kong (Hong Kong: Bauhinia
Foundation Research Centre, March 2007).
Chapter 11
1. Peter Wesley-Smith, The Method of Protecting Civil Liberties in Hong Kong in Civil
Liberties in Hong Kong, ed. Raymond Wacks (Hong Kong: Oxford University Press,
1988), 11.
2. Malcolm Merry, Freedom of Expression: Defamation and Contempt, in ibid., 88.
3. Joint Declaration of the Government of the United Kingdom of Great Britain and
of Hong Kong (Hong Kong: Government Printer, 1984), S. XIII.
4. Ibid.
5. Yash Ghai, Hong Kongs New Constitutional Order: The Resumption of Chinese
Sovereignty and the Basic Law, 2nd edition (Hong Kong: Hong Kong University Press,
1999), 406.
1990), Chapter III.
7. Chris Yeung, Alarm at fate of laws under Bill of Rights, SCMP, May 22, 1990.
8. Christine Loh, Human Rights In a Time Warp in The Other Hong Kong Report,
eds. Ngaw Mee-kau and Li Si-ming (Hong Kong: The Chinese University Press, 1996),
99100.
9. Chief Executives Office, Civil Liberties and Social Order: Consultation Document
(Hong Kong: The Office, April 1997), 2; Hong Kong Government, Commentary on
Civil Liberties and Social Order Consultation Document (Hong Kong: mimeo, April
1997), 3.
ch.13 Notes(p.307-359).indd 352
11/4/09 4:32:42 PM
10. Chris Patten, Hong Kong: A Thousand Days and Beyond (Hong Kong: Government
Printer, 1994), 20.
11. City and New Territories Administration, Green Paper on Equal Opportunities for
Women and Men (Hong Kong: Government Printer, 1993); Patten, op. cit., 21.
12. Chief Executives Office, op. cit., 1017; Hong Kong Government (1997), op. cit.,
47.
1995), 25.
14. Ibid.
15. Constitutional and Mainland Affairs Bureau, Access to Government Information,
www.access.gov.hk.
16. Ibid.
17. Ibid.
18. Hong Kong Journalists Association, HKJA Launches Campaign for Open Government
(Hong Kong: The Association, 1999).
19. Office of the Ombudsman, Annual Report 2007/2008, www.ombudsman.gov.hk, 5;
See also Doreen Weisenhaus and Jill Cottrell, Hong Kong Media Law: A Guide for
Journalists and Media Professionals (Hong Kong: Hong Kong University Press, 2007),
93.
20. Government of the HKSAR, Statistics on the Code on Access to Information, Press
Release, October 6, 2008. It is not clear how the government arrived at the figure for the
total number of requests. The various categories add up to more than 25,068.
21. Ibid.
22. Privacy Commissioner, The Privacy Commissioner for Personal Data, www.pcpd.
org.hk.
23. Personal (Privacy) Data Ordinance Cap 486, Part VIII.
24. Privacy Commissioner, Annual Report 2006/2007, www.pcpd.org.hk.
25. Joshua Butt, Data of 46,000 leaked over three years, SCMP, May 29, 2008.
26. Legislative Council, Panel on Information Technology and Broadcasting, Information
Security, LC Paper No. CB (1)326/0909(04) (December 2008).
27. Joshua Butt and Martin Wong, Privacy chief gets tough on data leaks, Sunday
Morning Post, May 11, 2008.
28. Equal Opportunities Commission, Annual Report 2002/2003, www.eoc.org.hk, 4.
29. Ibid., 9; Carole J. Petersen, The Right to Equality in the Public Sector: An Assessment
of Post-Colonial Hong Kong, Hong Kong Law Journal 32(1) (2001), 117131.
30. Equal Opportunities Commission, op. cit., 9.
31. Petersen, op. cit.
32. Hansard, July 2, 2003, 79607961.
33. Ravina Shamdasani, New rights official is sacked before he starts work, SCMP,
October 23, 2003.
34. Ravina Shamdasani, Watchdog faces pressure to resign, SCMP, October 24, 2003.
35. Ravina Shamdasani and Stella Lee, EOC chief faces gifts enquiry, SCMP, October
31, 2003; Hansard, November 26, 2003, 1737.
36. Independent Panel of Inquiry, Report of the Independent Panel of Inquiry on the Incidents
Relating to the Equal Opportunities Commission, www.legco.gov.hk (February 2005);
Legislative Council, Panel on Home Affairs, Termination of the Employment of the
Director (Operations) Designate by the Equal Opportunities Commission and other
Related Incidents, LC Paper No. CB (2)1003/0405(01) (March 8, 2005).
ch.13 Notes(p.307-359).indd 353
11/4/09 4:32:43 PM
37. Independent Panel of Inquiry, op. cit., II, III; Legislative Council, Panel on Home
Affairs (2005), op. cit., 10.
39. Legislative Council, Panel on Home Affairs (2005), op. cit., 8.
40. Equal Opportunities Commission, Cases and Statistics, www.eoc.org.hk.
41. Home Affairs Bureau, Interim Report No. 15 Review of the Corporate Governance
of the Equal Opportunities Commission (Hong Kong: mimeo, 2006).
42. Race Discrimination Ordinance, S.3, 55, 56.
43. Siu Sin-por, Judicial Activism creates court chaos, SCMP, February 20, 2000;
Johannes Chan, Civil Liberties, Rule of Law and Human Rights: The Hong Kong
Special Administrative Region in its First Four Years in The First Tung Chee-hwa
Administration, ed. Lau Siu-kai (Hong Kong: The Chinese University Press, 2002),
9294.
44. Hansard, July 8, 2008, 94.
45. Hansard, October 1, 1969, 11; October 8, 1969, 95.
46. OMELCO, Annual Report (Hong Kong: Government Printer, 1990), 2930.
47. OMELCO, Annual Report (Hong Kong: Government Printer, 1989), Appendix 13.
91.
49. Legislative Council, Legislative Council Annual Report 19931994 (Hong Kong:
50. Legislative Council, Legislative Council Redress System and Related Matters:
Reference Manual for Legislative Council Members (Hong Kong: mimeo, November
2001), 178.
51. Census and Statistics Department, Thematic Household Survey Report No. 33, www.
censtatd.gov.hk (August 2008), 2728.
52. Legislative Council (2001), op. cit., 180.
53. Legislative Council, Legislative Council Annual Report 20022003, www.legco.gov.hk
(2003), 59.
54. Legislative Council, Legislative Council Annual Report 20062007, www.legco.gov.
hk, 60.
55. Legislative Council, Legislative Council Annual Report 19981999 (Hong Kong: The
Council, 1999), 66.
58. ICAC, Annual Report, www.icac.org.hk (2007), 38.
59. Ibid., 41; ICAC, Annual Report (Hong Kong: Government Printer, 1985), Appendices
17, 18.
60. ICAC (2007), op. cit., 42.
61. Ibid., 37.
62. Ibid., 3940.
63. Ibid., 49.
64. Ibid., 4960, Annex C.
65. Ibid., 50.
66. Ibid., 65.
67. Ibid., Appendix 16.
68. ICAC, ICAC Annual Survey 2007, www.icac.org.hk, viii.
69. Ibid., 59.
ch.13 Notes(p.307-359).indd 354
11/4/09 4:32:43 PM
70. Ibid., 64.

71. See Ma Man, Su-lan Paula, A Study of the ICACs Role in Handling Non-corruption
Complaints (Unpublished MPA dissertation, Hong Kong: University of Hong Kong,
1988), 49; MDR Technology Ltd, ICAC Annual Survey (Hong Kong: MDR Ltd, 2002),
xi ; ICAC, Annual Survey (2007), op. cit.
72. ICAC, Annual Survey (2007), op. cit.
73. Ibid.
74. Ibid.
75. Ibid.
76. Ibid.
77. Ibid.
78. K.S. Law and S.Y.Yue, The Channels for Redressing Grievances in Hong Kong and in
Overseas Countries (Hong Kong: Research and Library Services Division, Legislative
Council Secretariat, 1998), 4.
79. Hong Kong Government, Consultative Document: Redress of Grievances (Hong Kong:
Government Printer, August 1986), 5.
80. Ibid., 7.
81. Commissioner for Administrative Complaints, Annual Reports of the Commissioner for
Administrative Complaints 19891992 (Hong Kong: Government Printer, 19891992),
Appendix E (1989); Appendix D (19901992).
82. Commissioner for Administrative Complaints, Annual Report of the Commissioner for
Administrative Complaints (Hong Kong: Government Printer, 1992), 55.
83. Ian Scott, Reforming the Ombudsman: the Evolution of the Commissioner of
Administrative Complaints Office in Hong Kong, Public Law (Spring 1994), 2738.
84. Hong Kong Government, Review of the Office of the Commissioner for Administrative
Complaints (Hong Kong: Government Secretariat, June 1992), 4.
85. Chris Patten, Our Next Five Years: The Agenda for Hong Kong (Hong Kong: Government
Printer, 1992), 29.
86. Scott (1994), op. cit., 35.
87. Office of the Ombudsman, Annual Report 2007/2008, op. cit., 10.
88. Commissioner for Administrative Complaints, Annual Report of the Commissioner for
Administrative Complaints 1996 (Hong Kong: Government Printer, 1996), 5.
89. Office of the Ombudsman, An Ombudsman System with Hong Kong Characteristics
(Hong Kong: The Office, 1998), 2.
90. Jonathon Boston et al., Public Management: The New Zealand Model (Auckland:
Oxford University Press, 1996), 339; Brenda Danet, Towards a Method to Evaluate
the Ombudsman, Administration and Society 10 (2) (November 1978), 335370.
91. Ombudsman Ordinance, Cap 397, S.3 (3).
92. David Gwynn Morgan, The Value of an Ombudsman in Hong Kong A Comparative
Perspective in The Basic Law of the HKSAR: From Theory to Practice, eds. Priscilla
M.F. Leung and Zhu Guobin (Singapore: Butterworths, 1998), 366367.
93. Hansard, May 21, 2003, 67636774.
94. Carlos Wing-hung Lo and Robert J. Wickens, Towards an Accountable and Quality
Public Administration in Hong Kong: Redressing Administrative Grievances through
the Ombudsman, International Journal of Public Administration 25(6) (2002), 763.
95. Hansard, July 20, 1988, 19541958.
96. Ombudsman Ordinance, Cap 397, Schedule 1.
ch.13 Notes(p.307-359).indd 355
11/4/09 4:32:43 PM
97. Ibid., Schedule 2.

98. Government of the HKSAR, Administrative Redress, Legal Aid and Sustainable
Development: Policy Objective for the Administrative Wing of the Chief Secretary for
Administrations Office (Hong Kong: Printing Department, 2001), 3.
101. Ombudsman Ordinance, S.10
102. Ibid., S.15(1).
103. Ibid., S.12(1).
105. Ibid., 13
106. Ibid., 21.
107. Ibid.
108. Office of the Ombudsman, Annual Report of the Ombudsman, Hong Kong (Hong Kong:
109. Office of the Ombudsman, Annual Report 2007/2008, op. cit., Chapter 2.
110. Ibid., 17, 1920.
111. Office of the Ombudsman (1998), op. cit., 1213.
112. Office of the Ombudsman, Annual Report 2007/2008, op. cit., 16, 19.
113. Ibid., 14.
114. Office of the Ombudsman, Annual Report of the Ombudsman, Hong Kong (Hong Kong:
Printing Department, 2003), Annex 5.
116. Office of the Ombudsman, Executive Summary of the Report of the Investigation into
the Commissioning and Operation of the New Airport at Chep Lap Kok (Hong Kong:
Printing Department, January 1999), 45.
117. Office of the Ombudsman, Mission, www.ombudsman.gov.hk.
118. Office of the Ombudsman, Administrative Ethics Checklist (Hong Kong: Government
Printer, 1997); Office of the Ombudsman, Administrative Fairness Checklist, 3rd edition,
(Hong Kong: Printing Department, 2001).
119. Office of the Ombudsman, Administrative Ethics Checklist, op. cit., ivi.
120. Office of the Ombudsman, Effective Complaint Handling: A Tool for Better Serving the
Community (Hong Kong: Printing Department, 1998).
121. Ibid., 16.
122. Ibid., Annex 13.
123. Census and Statistics Department, Thematic Household Report No. 4, Public Awareness
of the Office of the Ombudsman (Hong Kong: Printing Department, December 2000),
52, 69.
124. Census and Statistics Department, Thematic Household Report No. 17 (Hong Kong:
Printing Department, April 2004), 41, 43; Census and Statistics Department (2008),
op. cit., 2931, 42.
125. Ibid., 33.
126. Ibid., 35.
127. Census and Statistics Department (2004), op. cit., 47; Census and Statistics Department
(2008), op. cit., 35.
128. Census and Statistics Department (2004), op. cit., 56; Census and Statistics Department
(2008), op. cit., 41.
ch.13 Notes(p.307-359).indd 356
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129. Legislative Council, Panel on Security, Background Paper prepared by the Legislative
Council Secretariat: Independent Police Complaints Council (Hong Kong: The Council,
2002), 2.
130. Ibid., 34.
131. Ibid., 67.
132. Hansard, June 27, 1997, 986.
133. Legislative Council (2002), op. cit., 7; Security Bureau, Independent Police Complaints
Council (IPCC) Bill: Public Consultation Paper (Hong Kong: Printing Department,
March 2002), 17.
135. Quoted in ibid.
136. Ibid., 9.
137. Hansard, April 5, 2000, 5702.
138. Ibid., 5703.
139. Ibid., 57195720.
140. Security Bureau (2002), op. cit.
141. Ibid., 21.
142. Ibid., 11.
143. Legislative Council, Bills Committee, Independent Police Complaints Council Bill, LC
Paper No. CB (2)97/0708(03), October 27, 2007.
144. See, for example, Submission on Independent Police Complaints Bill from the Hong
Kong Human Rights Monitor (December 6, 2007); Submission on Independent Police
Complaints Bill from the Hong Kong Bar Association (January 15 and 22, 2008), www.
legco.gov.hk.
145. Legislative Council Minutes, July 913, 2008, Appendix 17.
146. See, for example, Royal Hong Kong Police Force, Complaints Against Police Annual
Report 1989 (Hong Kong: Police Headquarters, 1990), 26.
147. Cicada Wong Lai Sim, The Responsiveness and Accountability of the Hong Kong
Police Force: A Study of the Police Complaints System and Mechanisms of Control
(Unpublished MPA dissertation, Hong Kong: University of Hong Kong, 2002), 3642;
see also Independent Police Complaints Council, Report of the Independent Police
Complaints Council 2007, www.ippc.gov.hk (2008), Appendix II.
148. Ibid., Appendix VI, VIII.
149. See, for example, Legislative Council, Panel on Security, Report of the Panel on Security
for Submission to the Legislative Council, LC Paper No. CB(2) 2589/0506 (June 28
2008), 2; Legislative Council, Administrations Reply to a Question raised by the Hon
Leung Kwok-hung on Public Meetings and Processions, CB(2) 1736/0607 (13) (May
8 and June 5, 2007), www.legco.gov.hk; Legislative Council, Panel on Security, Report
of the Subcommittee on Polices Handling of Search of Detainees, LC Paper No. CB (2)
2692/0708 (July 25, 2008).
150. Independent Police Complaints Council, Report of the Independent Police Complaints
Council 1997 (Hong Kong: Government Printer, 1998), Appendix VI; Independent
Police Complaints Council (2007), op. cit., Appendix VI.
151. Independent Police Complaints Council, Report of the Independent Police Complaints
Council 2001 (Hong Kong: Government Printer, 2002), 110114.
152. Hansard, April 5, 2000, 57225727.
153. Ibid., 5173.
154. Independent Police Complaints Council (2007), op. cit., Appendix IX.
ch.13 Notes(p.307-359).indd 357
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155. Complaints Against Police Office (CAPO), A Guide for Complainants (Hong Kong:
mimeo, c2007).
156. Independent Police Complaints Council (2007), op. cit., 21.
157. Ibid., 2.
158. Ibid., 2627.
159. Ibid., 21.
160. Ibid., Appendix XII.
161. Independent Police Complaints Council (IPCC), Minutes of the 105th meeting of the
IPCC with the Complaints and Internal Investigations Branch, www.info.gov.hk/ipcc
(2003).
162. Calculated from Transport Complaints Unit, Quarterly Reports JanuaryDecember
2007, www.info.gov.hk/tcu.
163. Ibid.
164. Medical Council of Hong Kong, Complaints, www.mchk.org.hk.
165. Medical Council of Hong Kong, Annual Report 2007, www.mchk.org.hk.
166. Ibid., Table 1.
167. Hansard, May 9, 2001, 5198.
168. Ibid., 5250, 52575258.
169. Hansard, July 9, 2008.
170. Office of the Ombudsman, Effective Complaint-Handling (1998), op. cit.
171. Ombudsman Ordinance, Cap 397, S.10.
172. Philip Dykes, Discretion and Immigration Control, Paper delivered at a conference
on Immigration Law and Policies, Faculty of Law, University of Hong Kong, 2001.
173. Ibid.
174. T.K. Lai, Discretionary Law and Discretionary Powers, Paper delivered at a conference
on Immigration Law and Policies, Faculty of Law, University of Hong Kong, 2001.
175. Registration of Persons Ordinance, Cap 177, S.3D; Registration of Persons Tribunal,
Guidance Notes for Adjudicators (Hong Kong: mimeo, n.d.).
176. See Hong Kong Judiciary, Labour Tribunal, www.judiciary.gov.hk (2008).
177. Jane Moir, Combatants want to sort out redress mess, SCMP, September 13, 2003.
178. Ibid.
179. Hong Kong Judiciary, Report of the Working Party on the Review of the Labour
Tribunal, wwwjudiciary.gov.hk (2004).
180. Hong Kong Judiciary, Annual Report 2007, www.judiciary.gov.hk (2008).
Chapter 12
1. Chris Patten, Hong Kong: Transition (Hong Kong: Government Printer, 1996), 19.
2. Kuan Hsin-Chi and Lau Siu-kai, Between Liberal Autocracy and Democracy:
Democratic Legitimacy in Hong Kong, Democratization 9(4) (2002), 5876; Ming
Sing, Hong Kongs Tortuous Democratization (London: RoutledgeCurzon, 2004), 183
190.
3. Ibid., 182.
4. Christopher Pollitt and Geert Bouckaert, Public Management Reform: A Comparative
Analysis (Oxford: Oxford University Press, 2000), 174175.
5. Anson Chan, Speech by the Chief Secretary of Administration at an Asia Society
luncheon, Press Release, April 19, 2001.
ch.13 Notes(p.307-359).indd 358
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6. Government of the HKSAR, Transcript of Chief Secretary for Administrations media

session (Part 2), Press Release, May 3, 2001.
7. James Hayes, Friends and Teachers: Hong Kong and Its People 19531987 (Hong
Kong: Hong Kong University Press, 1996), 1314, Chapters 8, 11; Elizabeth Sinn, ed.,
Hong Kong, British Crown Colony, Revisited (Hong Kong: Centre of Asian Studies,
The University of Hong Kong, 2001), 7, 126127.
8. Lo Shiu-hing, The Changing Dimensions of Executive-Legislative Relations: The Case
of Hong Kong, Public Administration and Policy 7(2) (September 1998), 79103; Ian
Scott, The Disarticulation of the Hong Kongs Post-Handover Political System, The
China Journal, No. 43 (January 2000), 2953.
9. Joseph Cheng, Team spirit lacking in demoralized civil service, SCMP, October 26,
2002; Jimmy Cheung, Civil servants morale in dramatic fall since handover, SCMP,
June 30, 2003; Chris Yeung, Observer, SCMP, December 16, 2002.
10. Chan (2001), op. cit.
11. Christine Loh, Christine Lohs newsletter, www.civic-exchange.org, September 25,
2003; Peter So, Complaints over financial services surge on back of minibonds gripes,
SCMP, January 20, 2009.
12. Loh, op. cit.
13. Government of the HKSAR, CEs speech given at the Hong Kong Association, Press
Release, November 12, 2003.
14. Ambrose Leung, Tsang delays consultation on poll reform, SCMP, January 16,
2009.
15. Donald Tsang, Strong Governance for the People (Hong Kong: Government Logistics
Department, 2005), para 25.
16. Standing Committee of the National Peoples Congress, Full text of the Standing
Committee decision, SCMP, April 27, 2004.
18. Tung Chee-hwa, CE addresses Basic Law seminar, Press Release, March 15, 2004.
19. Qiao Xiaoyang, Striving in a pragmatic spirit to find the right path to political
development, SCMP, April 29, 2004.
20. Donald Tsang, An Interview with Hong Kongs Chief Executive, Donald Tsang Kamyuen, Hong Kong Journal, www.hkjournal.org, No. 12 (October 2008).
21. Joseph C.W. Chan et al., From Consultation to Civic Engagement: The Road to Better
Policy-making and Governance in Hong Kong (Hong Kong: Bauhinia Foundation
Research Centre, March 2007).
22. Rachel Laforest and Susan Philips, Citizen Engagement: Rewiring the Policy Process
in Critical Policy Studies, eds. Michael Orsini and Miriam Smith (Vancouver: UBC
Press, 2007).
23. Donald Tsang, Embracing New Challenges (Hong Kong: Government Logistics
Department, 2008), para 122.
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Blank page.indd 31
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Chief Secretary, The Hong Kong Government Serving the Community, Briefing to Legislative
Council Members (Hong Kong: Government Printer, February 10, 1995).
Education and Manpower Bureau, Legislative Council Brief on the Merger of the Education
and Manpower Bureau with the Education Department and Education Commission with
the Board of Education, EMBCR 6/2/3321/90 Pt.3 (Hong Kong: mimeo, November 18,
2002).
Environment, Transport and Works Bureau, Background Brief on Fare Increase Applications
by Franchised Bus Companies, LC Paper No. CB (1) 829/0708 (April 25, 2008).
Hansard, 19682008, passim.
Legislative Council, Legislative Council Annual Reports 19932007 (Hong Kong:
Government Printer, 19941998; The Council, 19992003; www.legco.gov.hk, 2004
2007).
Legislative Council Redress System and Related Matters: Reference Manual for
Legislative Council Members (Hong Kong: mimeo, November 2001).
Background Paper prepared by the Legislative Council Secretariat: Independent Police
Complaints Council (Hong Kong: The Council, 2002).
Background Brief on Airport Authority (Amendment) Bill 2004, LC Paper No. CB (1)
1693/0304 (May 2004).
Bills Committee on Independent Police Complaints Council Bill, LC Paper No. CB (2)
184/07/08(1) (April 18, 2008).
Legislative Council, House Committee, Minutes of a Meeting held on 10th October 2003
(Hong Kong: mimeo, 2003).
11/4/09 4:34:33 PM
Minutes of a Meeting held on 17th October 2003 (Hong Kong: mimeo, 2003).
Legislative Council, Panel on Constitutional Affairs, Minutes of a Meeting held on 17th March
2003 (Hong Kong: mimeo, 2003).
Legislative Council, Panel on Financial Affairs, Minutes of a Special Meeting held on 31st
July 2002 (Hong Kong: mimeo, 2002).
Legislative Council, Panel on Home Affairs, Minutes of Special Meeting held on 7th November
2003, www.legco.gov.hk, 2003.
Minutes of Special Meeting held on 14th November 2003, www.legco.gov.hk (2003).
Legislative Council, Panel on Public Service, Information Paper for Panel on Public Service,
LC Paper No. CB (1) 1902/0102 (March 2002).
Minutes of a Meeting held on 23rd May, 2002, LC Paper No. CB (1)2628/0102 (Hong
Kong: mimeo, 2002).
Review of the Voluntary Retirement (VR) Scheme, LC Paper No. CB (1) 1953/0102(03)
(June 2002).
Public Consultation on the Phase One Final Report of the Task Force and Review of
Civil Service Pay Policy and System, LC Paper No. CB (1) 721/0203(04) (January
2003).
Supplementary Provision for Pensions in 20022003, LC Paper No. CB (1)881/02
03(01) (February 2003).
Performance Management in the Public Service, LC Paper No. CB (1) 1459/0203(04)
(April 2003).
Reorganisation of the Civil Service Training and Development Institute, LC Paper No.
CB (1) 551/0304 (03) (December 2003).
Post-retirement Employment of Ms Elaine Chung, Former Deputy Director of Housing/
Deputy Secretary for Housing, LC Paper No. CB (1)1095/0405(01) (March 2005).
Staff Consultation Mechanism in the Civil Service, LC Paper No. CB (1) 1769/0405
(June 2005).
Review of Employment Situation of Non-Civil Service Contract Staff, LC Paper No. CB
(1) 471/0607(03) (2006).
Updated Overview of Civil Service Conduct and Discipline, LC Paper No. CB (1)
1915/0607(02) (June 2007).
Employment of Non-Contract Staff, LC Paper No. CB (1) 377/0708(03) (December
2007).
Background Brief on Civil Service Recruitment Policy, LC Paper No. CB (1)974/0708
(March 11, 2008).
Integrity Enhancement Initiatives for Civil Servants, LC Paper No. CB (1)764/07
08(05) (February 2008).
Update on National Studies and Basic Law Training for Civil Servants, LC Paper No.
CB (1) 764/0708(04) (February 2008).
General Overview of the Civil Service Strength, Retirement and Resignation, LC Paper
CB (1)1817/0708(01) (June 16, 2008).
Legislative Council, Panel on Welfare Services, Minutes of the Meeting held on 11th November
2002 (Hong Kong: mimeo, 2002).
Minutes of the 16th Meeting held on 27th June 2003 (Hong Kong: mimeo, 2003).
Lump Sum Grant Subvention System, LC Paper No. CB (2) 1875/0708(03) (May
2008).
Security Bureau, Legislative Council Brief: National Security (Legislative Provisions) Bill
(Hong Kong: The Bureau, February 13, 2003).
11/4/09 4:34:34 PM
7. Policy Addresses; Speeches and Statements by the Governor/Chief Executive
Chief Executive, Chief Executives statement about Falun Gong, Press Release, February
8, 2001.
Chief Executives transcript on the Basic Law Article 23, Press Release, July 5,
2003.
Statement by CE, Press Release, July 7, 2003.
Government of the HKSAR, CEs speech at Swearing-in Ceremony, Press Release, July
1, 2002.
CEs speech given at the Hong Kong Association, Press Release, November 12,
2003.
The 2003 Policy Address: Policy Agenda (Hong Kong: Printing Department, 2003).
Patten, Chris, Our Next Five Years: The Agenda for Hong Kong (Hong Kong: Government
Printer, 1992).
Hong Kong: Todays Successes, Tomorrows Challenges (Hong Kong: Government
Printer, 1993).
Hong Kong: A Thousand Days and Beyond (Hong Kong: Government Printer, 1994).
Hong Kong: Transition (Hong Kong: Government Printer, 1996).
Tsang Kam-yuen, Donald, Strong Governance for the People (Hong Kong: Logistics
Department, 2005).
A New Direction for Hong Kong, www.ceo.gov.hk, October 2007.
Embracing New Challenges, www.policyaddress.gov.hk/0809/index.html, October
2008.
Tung Chee Hwa, Building Hong Kong for a New Era (Hong Kong: Printing Department,
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Quality People, Quality Home: Positioning People for the 21st Century (Hong Kong:
Serving the Community, Sharing Common Goals (Hong Kong: Printing Department,
2000).
Building on Our Strengths, Investing in Our Future (Hong Kong: Printing Department,
2001).
Capitalising on Our Advantages, Revitalising Our Economy (Hong Kong: Government
Printer, 2003).
Seizing Opportunities for Development, Promoting People-based Governance (Hong
Kong: Government Logistics Department, 2004).
8. Other Government Reports, Documents and Speeches
Audit Commission, Reports Nos. 36, 39, 42, 45, 48, 49, www.audit.gov.hk (2001, 2002, 2004,
2005, 2007).
Civil Service Branch, Whos Who in the Administrative Service of the Hong Kong Government
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the Civil Service, www.csb.gov.hk, 2003.
Commerce and Economic Development Bureau, 2008 Digital 21 Strategy, www.digital21.
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Efficiency Unit, The Service Imperative (Hong Kong: Government Printer, 1996).
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Financial Secretary, The Budget 200304 (Hong Kong: Printing Department, 2003).
The Budget 200405 (Hong Kong: Government Logistics Department, 2004).
The 200607 Budget (Hong Kong: Government Logistics Department, 2006).
The 20082009 Budget: Information Pack for the Financial Secretarys Consultations,
www.legco.gov.hk, CB (1)145/0708(03), November 2007.
Government of the HKSAR, Statement by CS on the review of the institutional framework
for public housing, Press Release, June 20, 2002.
Statement by Secretary for Housing, Planning and Lands, Press Release, November
13, 2002.
Signing of the Mainland and Hong Kong Closer Economic Partnership Arrangement,
Home Affairs Bureau, Progress Report on the Review of Advisory and Statutory Bodies (Hong
Kong: The Bureau, May 3, 2005)
Review of Advisory and Statutory Bodies: Interim Report No.14 Review of the
Classification System of Advisory and Statutory Bodies in the Public Sector (Hong
Kong: The Bureau, 2005).
Interim Report No. 15 Review of the Corporate Governance of the Equal Opportunities
Commission (Hong Kong: The Bureau, 2006).
Hong Kong Government, Clean Hong Kong: The Community Involvement Plan (Hong Kong:
Serving the Community (Hong Kong: Government Printer, 1995).
Code on Access to Information (Hong Kong: Government Printer, 1995).
Independent Commission Against Corruption, Support Clean Government: Handbook for
Managers (Hong Kong: Government Printer, 1996).
Independent Commission against Corruption and Civil Service Bureau, Ethical Leadership
in Action: Handbook for Senior Managers in the Civil Service (Hong Kong: ICAC and
CSB, 2008).
Information Technology and Broadcasting Bureau, E-government Benefits Us All (Hong
Kong: The Bureau, 2002).
Office of the Ombudsman, An Ombudsman System with Hong Kong Characteristics (Hong
Kong: The Office, 1998).
Maladministration and Redress (Hong Kong: Printing Department, 1998).
Administrative Ethics Checklist (Hong Kong: Printing Department, 1998).
Effective Complaint Handling: A Tool for Better Serving the Community (Hong Kong:
Secretariat for Chinese Affairs, The City District Officer Scheme (Hong Kong: Government
Printer, 1969).
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Secretary of Housing, Planning and Lands, Speech to the Lions Club International on the
analysis of the property market data, Press Release, July 31, 2003.
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Report No. 42, www.jccs.gov.hk, January 2008.
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Index
Academic autonomy, 61, 137, 254, 307,

321n
Accountability, 7, 1011, 1314, 1920,
22, 26, 301, 49, 517, 60, 6266,
97, 106, 120, 1256, 1356, 139,
1412, 145, 212, 218, 223, 235
6, 241, 255, 25960, 269, 277,
293, 3012, 305 see also Principal
Officials Accountability System;
Legislative Council, Statutory
bodies: accountability of
bureaucratic 7, 10, 1920, 22, 51, 656,
97, 116, 232, 2356, 241, 251, 255,
259, 272, 277, 296, 302
of the Chief Executive 2930, 49
political 910, 13, 1920, 2527, 2931,
47, 49, 52, 54, 567, 62, 646, 120,
235, 293, 301, 305
Addiction Treatment Centre Board, 286
Administrative Appeals Board, 262, 270,
285, 2878
Administrative Appeals Board Ordinance,
287
Administrative tribunals, 270, 285, 288,
3056
Administrative grade, 6, 55, 59, 63, 65, 71,
73, 7682, 84, 99, 1812, 185, 295,
321n, 322n
educational qualifications, 789
fears of the future, 79
political role, 78, 8082
promotion, 82
Administrative Wing, 74
ch.15 Index(p.385-396).indd 385
Advisory bodies, 125, 193, 247, 253, 302

see also Commission on Poverty,
Commission on Strategic

Development
Agriculture, Fisheries and Conservation
Department, 74, 96
Airport Authority, 1, 6, 11920, 124, 126,
28, 131, 2178 see also Privatisation
opening of the airport, 2178
Airport Development Steering Committee,
217
Appropriations Bill see Budget
Architectural Services Department, 74
Article 23 of the Basic Law, 12, 15, 17, 33,
3845, 55, 62, 108, 190, 193, 195,
227, 252, 2545, 263, 294, 296
Chinese governments position, 112,
39
critics of the proposed legislation, 403
demonstrations over proposed

legislation, 12, 41, 43, 45, 556, 82,
108, 1501, 178, 242, 247, 252, 294
Hong Kong governments position, 12,
15, 3840, 4344, 62, 255
responses to the consultative document,
15, 412, 62
Article 45 Concern Group see Civic Party
Asian financial crisis 11, 87, 96, 124, 154
Asian games 193, 223
Association for Democracy and Peoples
Livelihood, 243
Attorney-General 73, 280
Audit Commission, 1401, 144, 2246,
248, 307n
11/9/09 12:15:21 PM
386 Index
Director of Audit, 52, 60, 139, 1412,

223, 2256, 228, 302
Audit Ordinance, 141, 225
Autonomy, 206, 233, 270, 2723, 293, 300
of the Hong Kong government, 300
of the Hong Kong government from
business, 293
of the Hong Kong government from
society, 206
of statutory bodies, 233
of redress institutions, 270, 2723
Avian flu 50, 52, 96, 215, 293
Bank of China, 41
Banking Ordinance, 127, 130
Bankruptcies, 11
Banks, 2, 41, 221
Bar Association, see Hong Kong Bar
Association
Basic Law, 5, 10, 123, 168, 22, 2539,
42, 456, 4950, 52, 57, 61, 63, 69,
79, 82, 87, 89, 91, 979, 1078, 112
3, 1278, 153, 155, 191, 195, 213,
222, 235, 254, 2589, 265, 289,
2901, 29395, 299301 see also

Article 23; Chief Executive;
Legislative Council, Judicial review
amendments to, 10, 16, 52, 301
and executive-led government, 46, 213
see also Executive-led government
interpretation of, 13, 368, 456
promulgation, 258
Basic Law Drafting Committee, 27
Basic Law Consultative Committee, 278
Bill of Rights Ordinance, 259
British government, 6, 8, 18, 28, 38, 79, 85,
121, 152, 1801, 213, 233, 258 see
also Sino-British Agreement
Budget, 6, 9, 11, 14, 22, 2930, 32, 43, 55,
85, 87, 91, 101, 121, 124, 127, 130,
149173, 1879, 197, 199, 201, 225,
232, 248, 280, 293, 298
accrual-based accounting, 154
Appropriations Bill, 162, 1689
consolidated account, 153
deficit, 6, 11, 14, 85, 157, 188, 248, 293,
298
envelop system, 73, 161162
ch.15 Index(p.385-396).indd 386
expenditure, 15872, 1867, 226, 232,

246, 248, 280
Medium Range Forecast (MRF), 154,
1613
operating account, 87, 153
principles, 1524
resource allocation exercise, 1612,
1657, 1701, 179, 203, 209
revenue, 156163
Star Chamber, 58, 1612, 164
Task Force on Review of Public
Finances, 157
Buildings Department, 74, 276
Capitalism, 5, 8, 18, 85, 290, 308n
and the Hong Kong government, 5, 8
big market, small government, 3, 12,
923
Catholic Church, 91, 219, 267
Catholic Diocese of Hong Kong v Secretary
for Justice, 46
Census and Statistics Department, 74, 241,
265, 278
Central Policy Unit, 59, 167
Chan, Anson On-sang, 16, 40, 63, 801,
116, 138, 217, 291, 294 see also
Chief Secretary for Administration
Chan, K.C., 60
Chan Pak-fong, Peter, 322n
Cheng, Eva, 60
Cheung, Anthony B. L., 35
Cheung Kin-chung, Mathew, 60
Chinese government, 7, 1012, 159, 26
30, 325, 37, 3941, 43, 50, 52, 57
8, 62, 66, 7980, 86, 91, 112, 119,
1234, 180, 1823, 192, 2123, 233.
235, 239, 2589, 261, 263, 28990,
2923, 295, 299, 3001, 311n see
also Article 23; Chief Executive;
Sino-British Agreement
and the Basic Law, 12, 16, 2630, 334,
37, 39, 52, 578, 290, 293
attitudes towards constitutional reform,
169, 29, 183, 299301, 311n
Chinese University of Hong Kong, 601,
197
Chief Executive, 1, 3, 114, 168,
2630, 325, 38, 40, 437, 49, 52,
11/9/09 12:15:21 PM
5466, 69, 713, 78, 804, 87, 90,

968, 104, 109, 1123, 1167, 1367,
140, 150, 1612, 164, 1679, 176,
1902, 216, 218, 2213, 239, 254,
262, 2723, 286, 2901, 295, 299
see also Principal Officials;

Principal Officials Accountability
System; Tsang Kam-yuen, Donald;
Tung Chee-hwa
accountability, 2930, 49, 54, 66
election, 1718, 279, 35, 64, 80, 299,
301
electoral college, 12, 1617, 289, 301
policy address, 31, 34, 58, 82, 87, 112,
162, 164, 1668, 170, 186, 1901,
221, 236, 2513, 259
powers, 325, 52, 62, 69, 1367, 272
relations with the civil service, 49,
523
relations with the judiciary, 38
removal, 30
Chief Executive Election Ordinance, 30
Chief Justice, 30
Chief Secretary for Administration, 146,
40, 52, 589, 63, 714, 79, 802, 116,
1378, 143, 181, 2178, 234, 239,
271
China Motor Bus Company, 134
Chinese medicine, 193
Chow, York, 60
Chung, Robert Ting-yiu, 254
Citizens Charter, 236
Civic engagement, 193, 208, 255, 304, 306
Civic Exchange, 191
Civic Party, 28, 312n
Civil Engineering Department, 321n
Civil Human Rights Front, 15, 43
Civil Servants Provident Fund, 101
Civil Service, 1, 3, 57, 914, 19, 22,
323, 49, 51, 53, 556, 623, 656,
69, 71125, 127, 12931, 135, 137,
13943, 145, 1501, 15960, 164,
171, 173, 179182, 186, 190, 192,
196, 198, 201, 2069, 2123, 2224,
227, 2325, 2379, 24851, 253,
261, 263, 268, 271, 273, 277, 289
95, 298, 3026, 307n see also
Administrative grade, Civil Service
ch.15 Index(p.385-396).indd 387
Index 387
pay and conditions of service;

Executive grade;
age structure, 89
core values, 92, 111, 113, 1167, 237,
241, 264, 293
discipline and conduct, 113117, 283
Enhanced Productivity Scheme, 14
expatriates in, 7, 32, 55, 79, 96, 99100,
240
grades, 7682, 87, 100, 1034, 107,
110, 112, 114, 303
neutrality, see Political neutrality
Non-Civil Service Contract Scheme,
88, 101
pensions, 89, 98, 1012
performance appraisal, 106, 108, 1101,
117
performance measurement, 252
permanent secretaries, 53, 823
promotions in, 69, 76, 79, 812, 95, 97,
102, 105, 111, 217, 241
ranks in, 53, 767, 89, 99, 102, 107,
10910, 112, 114, 240, 273
recruitment, 6, 8, 134, 32, 69, 76, 79,
82, 878, 959, 1012, 104, 123,
130, 292, 295, 303
reform, 9, 12, 22, 33, 70, 95, 106, 112,
1145, 119, 2123, 2312, 234, 236,
247, 251, 291, 2934, 303
size, 134, 868, 92, 119
staff associations, 56, 90, 967, 1019,
111, 1168, 180 see also Federation
of Civil Service Unions; Hong Kong
Confederation of Trade Unions;
Trade unions
training, 1113, 116, 227, 236, 253,
265, 291
voluntary retirement scheme, 14, 87,
101
women in, 79
Civil Service Branch, 71, 75, 96, 99, 105
Civil Service Bureau, 110114, 116, 224,
261, 268, 277, 294, 307n
Civil Service Code, 1123, 117, 303, 305
Civil Service Regulations, 33, 1135
Civil Service pay and conditions of
service, 11, 134, 323, 42, 52, 60,
79, 8890, 968, 10012, 1145, 117,
11/9/09 12:15:21 PM
388 Index
119, 153, 190, 212, 273, 293, 303,

306
Master Pay Scale, 100, 105, 112, 1145
Model Scale 1, 14, 1046
Pay Investigation Unit, 103
performance pay, 13, 1079, 111, 293
pay scales, 105, 1079
qualification groups, 104
Salaries Commission, 103
Standing Commission on Civil Service
Salaries and Conditions of Service,
100, 1034, 1069, 303, 306
Task Force on the Review of Civil
Service Pay Policy and System, 90,
10710
Civil Service Training and Development
Institute, 112, 253
Closer Economic Partnership Arrangement
(CEPA), 154
Coalition Against the Sales Tax, 157
Code on Access to Information, 25961
Colonial Secretariat, 701, 181, 232
Commission on Poverty, 133, 193, 341n
Commission on Strategic Development, 19,
193, 255
Commissioner for Administrative

Complaints, see Ombudsman
Commissioner for Administrative
Complaints Ordinance, 265
Commissioner for Resettlement, 122
Communist Party, 20, 86
Community Chest, 129, 133
Companies Registry, 123
Complaints Against Police Office (CAPO),
169, 267, 26970, 27883, 285
cases, 2813
investigative procedures, 27981
powers, 2813
Comprehensive Social Security Assistance
(CSSA), 9, 166, 171, 18690, 1989
Consultation, 9, 145, 278, 3944, 501,
53, 624, 70, 84, 90, 96, 98100,
108, 1101, 144, 150, 157, 168, 175,
1778, 1824, 186, 1925, 206,
20813, 21921, 228, 241, 2526,
264, 280, 295, 301
documents, 3942, 501, 53, 623, 96,
98100, 1101, 144, 157, 253, 259,
280, 305
ch.15 Index(p.385-396).indd 388
Consumer Council, 60, 264

Constitutional and Mainland Affairs
Bureau, 17, 50, 56, 623, 72, 82, 169
Correctional Services Department, 6, 75,
276
Corruption, 78, 13, 51, 70, 96, 1134,
130, 217, 257, 264, 26770, 283, 287
see also ICAC; Police: corruption
Court of Final Appeal (CFA), 32, 37, 456,
267
Cross Harbour Tunnel, 126
Cruise terminal, 135, 170, 223, 268
Cultural Revolution, 86
Customs and Excise Department, 6, 52, 60,
69, 75, 98, 208, 249
Cyberport, 134, 193, 233, 254
DeGolyer, Michael, 216
Democratic Alliance for the Betterment
and Progress of Hong Kong (DAB),
167, 26, 29, 35, 44, 52, 56, 59,
634, 135, 160, 189, 1945, 244,
295, 298
Democratic Party 18, 28, 35, 40, 56, 63,
158, 160, 189
Dengue fever, 203
Department of Health, 56, 74, 96, 203, 216,
236, 239, 2456, 285
Director of Health, 57, 215
Development Bureau, 72, 74
Directors of Bureaus, 11, 145, 523,
589, 623, 69, 73, 78, 814, 98,
1614, 68, 176, 196, 222, 295, 301,
305, 307n see also Principal
Officials; Principal Officials

Accountability System
Disability Discrimination Ordinance, 261
District Boards, 501, 210, 243, 264
District Councils, 12, 51, 84, 302
District Watch Committee, 910
Disneyland, 124, 134, 193, 223
Domestic Violence Ordinance, 185, 242
Dykes, Philip, 286
E-government, 249, 251
Economic Analysis and Business

Facilitation Unit, 74
Education and Manpower Bureau, 88, 197,
224
11/9/09 12:15:22 PM
Education Commission, 219, 234

Education Convergence, 220
Education Department, 76, 128, 209, 211,
225, 237
Director of Education, 225
Secondary School Place Allocation
(SSPA), 262
Education policy, 61, 219
Efficiency, 78, 80, 87, 92, 957, 104, 110
1, 117, 145, 149, 2256, 228, 2317,
239, 241, 243, 245, 24753, 2556,
265, 291, 293, 303
Efficiency Savings Exercise, 87
Efficiency Unit, 74, 92, 97, 117, 234, 237,
248, 2502
Elections, 101, 1621, 27, 312, 44, 49,
501, 64, 160, 183, 231, 268, 295,
299, 305, 310n
Electrical and Mechanical Services
Department, 74, 123
Employees Retraining Board, 186
Enhanced Productivity Scheme, see Civil
service
Environmental Protection Department, 74,
124, 1645
Equal Opportunities Commission (EOC), 7,
123, 144, 259, 261, 335n
Establishment Branch, 71
Executive Council, 29, 345, 389, 43,
523, 55, 62, 64, 80, 106, 143, 150,
161, 176, 1812, 185, 189, 191
Executive grade, 78, 102, 303
Executive-led government, 46, 51, 213,
224, 232, 247, 252, 300, 305
Falun Gong, 3940, 43, 254
Family Status Discrimination Ordinance,
261
Fang, Christine, 188
Federation of Civil Service Unions, 55
Federation of Trade Unions, 35, 238
Finance Branch, 85, 145, 1523, 182, 234,
236, 239
Financial Services and the Treasury
Bureau, 158, 1615, 168, 225
Financial Secretary, 1, 4, 145, 43, 525,
589, 62, 714, 79, 82, 85, 120,
1234, 130, 133, 143, 15264,
ch.15 Index(p.385-396).indd 389
Index 389
1679, 1712, 176, 181, 295 see also

Leung Kam-chung, Antony;

Tang Ying-yen, Henry;

Tsang Chun-wah, John
Fire Services Department, 6, 73, 756, 237,
249, 303
Food and Environmental Hygiene

Department, 51, 745, 276
Food safety, 50, 167, 268
Friedman, Milton, 8, 85
Frontier, 189
Garcia, Arthur, 272 see also Ombudsman
Ghai, Yash, 25
Godber, Peter, 8
Goods and Services Tax (GST), 14, 157,
168, 178, 193
Government Land Transport Agency, 321n
Global financial crisis, 103, 154, 167,
2978, 301
Government Logistics Department, 74
Green Papers, 9, 182, 193
Gross Domestic Product (GDP), 4, 10,
1536, 161, 233, 308n
Guangdong, 215
Harbour Fest, 223, 226
Harbour reclamation, 195, 221, 296
Hay Management Consultants, 142
Health policy, 2, 15860, 179, 211, 233,
244, 246
Healthcare reform, 8, 145, 122, 15860,
193, 195, 2456, 304
Highways Department, 75, 248
Ho, Albert Chun-yan, 28
Ho, Cyd, 272
Home Affairs Bureau, 72, 75, 144, 227,
263, 302
Hong Kong Alliance in support of the
Patriotic Democratic Movement in
China, 40
Hong Kong and Macao Affairs Office, 17
Hong Kong Bar Association, 3840, 280
Hong Kong Chinese Civil Servants
Association, 134
Hong Kong Confederation of Trade
Unions, 90, 120, 130
11/9/09 12:15:22 PM
390 Index
Hong Kong Council of Academic

Accreditation, 130
Hong Kong Council of Social Service, 121,
133, 138, 186, 188
Hong Kong Housing Society, 267
Hong Kong Institute of Education (HKIEd),
601, 137, 193, 197, 307n
Hong Kong Medical Association, 245
Hong Kong Monetary Authority, 127, 130,
143
Hong Kong Observatory, 74
Hong Kong Peoples Council on Public
Housing Policy, 243
Hong Kong Senior Government Officers
Association, 322n
Hong Kong Sports Development Board,
140, 144, 302, 344n
Hong Kong University of Science and
Technology, 193, 1978, 344n
Hong Kong Tourism Board, 137, 140,
1445, 302
Hong Kong Transition Project, 41
Hospital Authority, 1, 6, 567, 76, 119,
122, 126, 128, 131, 133, 137, 144,
204, 2123, 2156, 233, 236, 240,
2447
Hospital Authority Review Panel, 56,
2156
Housing Authority, 6, 119, 1212, 124, 126,
131, 1378, 145, 217, 237, 243, 276,
321n
complaints, 245, 276
tenants, 209, 211, 2424, 249
waiting lists, 2424
Housing Department, 75, 92, 122, 134, 217,
237, 243, 249, 276, 321n, 325n
re-organisation, 92, 134, 321n, 325n
Housing Bureau, 72, 75, 204
Housing policy, 204, 220, 2425
Home Ownership Scheme, 2423
pressure groups, 243
Hu Jintao, 44
Immigration Department, 75, 239, 276
Immigration Tribunal, 286
Independent Commission Against

Corruption (ICAC), 1, 3, 8, 11, 55,
60, 62, 96, 103, 1126, 126, 130,
ch.15 Index(p.385-396).indd 390
133, 233, 257, 264, 26770, 277,

280, 283, 288, 303, 305, 307n
cases, 114, 217, 268
complaint-handling, 264, 269
community relations, 2689
corruption prevention, 268
Hong Kong Ethics Development
Centre, 269
integrity management programmes,
1123, 116, 303, 305
operations department, 268
organisation, 2679
powers, 113, 269
Independent Police Complaints Council,
194, 27981, 283
Information Services Department, 75
Information Technology policy, 134, 249
Innovation and Technology Commission,
74
Integrated Call Centre, 250, 252, 277
International Covenant of Civil and
Political Rights, 45, 258, 263, 279
Inland Revenue Department, 74, 236, 284
Intellectual Property Department, 74
Interpretation and General Clauses
Ordinance, 136
Invest Hong Kong, 74, 135
Ip Suk-yee, Regina, 17, 40, 43, 55 see also
Secretary for Security
Jiang Zemin, 80, 218
Jockey Club, 129, 133, 140, 203
Joint Declaration on the future of Hong
Kong see Sino-British Agreement
Journalists Association, 260
Judicial review, 456, 62, 90, 137, 220,
262, 270, 286, 307n
Judiciary, 1, 30, 32, 38, 70, 104, 150, 262,
273, 287, 289, 294
independence of, 38
King, Ambrose, 149
Kingdon, J. W., 150, 1767, 190, 192, 194
Kowloon Canton Railway Corporation
Ordinance, 122
Kowloon Canton Railway Corporation
(KCRC), 3, 122, 128, 131, 237, 271
Kowloon Riots, 1956, 10
11/9/09 12:15:22 PM
Labour Department, 75, 186, 2379, 321n

Labour Tribunal, 2867
Lam Cheng Yuet-ngor, Carrie, 60, 28790
Lam Sui-lung, Stephen, 38, 60 see also
Secretary for Constitutional Affairs
Lands Department, 70, 74, 226, 276
Lands Registry, 74, 123
Lands Tribunal, 287
Lau, Rita, 59
Law Chiu-fun, Fanny, 612
Lee Cheuk-yan, 120, 145
Lee Chu-ming, Martin, 27, 40
Lee Siu-kwong, Ambrose, 60
Legal Aid Department, 45, 75
Legal aid, 45, 235, 259
Legislative Council, 7, 913, 158, 20,
2631, 347, 415, 47, 49, 517,
626, 69, 789, 83, 87, 90, 967,
99, 106, 108, 1156, 11925, 127,
1301, 133, 1356, 13844, 1578,
160, 1624, 1679, 171, 176, 179,
1813, 1889, 1912, 1946, 1989,
206, 209, 213, 215, 2178, 2256,
255, 259, 2627, 269, 2713, 2767,
27981, 2846, 28890, 2926, 299
302, 305 see also Accountability;
Principal Officials Accountability
System
composition, 13, 167, 31
elections, 168, 278, 31, 44, 51, 299
functional constituencies, 26, 312,
299300
Finance Committee, 106, 127, 162,
164, 168, 181
House Committee, 57
panel on Constitutional Affairs, 55
panel on Home Affairs, 262
panel on Financial Affairs, 130
panel on Public Service, 127
powers, 20, 26, 301, 39
Public Accounts Committee, 20, 13941,
302
Secretariat, 265
Select Committees, 557, 115, 2156,
218
redress system, 2647
Legitimacy, 212, 33, 36, 38, 446, 64,
1213, 1789, 185, 218, 220, 235,
239, 255, 257, 296301, 3046
ch.15 Index(p.385-396).indd 391
Index 391
crisis of, 21, 292

deficit, 212, 231, 235, 239, 255, 257,
264, 267, 270, 2878, 292, 299, 304
defined, 235, 291
performance legitimacy, 122, 150, 218,
2312, 235, 296
Lehman Brothers, 221, 296
Leisure and Cultural Services Department,
51, 75, 88, 203, 277
Leong, Alan, 17
Leung, Chin-man, 116
Leung Kam-chung, Antony, 43, 53, 55, 153
Leung Kwok Hung and Another v Chief
Executive, 46
Leung Ming-yin, 115
Leung TC William Roy v Secretary for
Justice, 46
Letters Patent, 26, 113, 127
Li Kwok-cheung, Arthur, 68, 197
Li Kwok-po, David, 62
Liberal Party, 167, 35, 43, 52, 89, 97, 157,
160, 189, 295
Loh, Christine, 191
Lump Sum Grant scheme, 91, 133, 138,
145
Luk, Bernard, 60
Ma Si-hang, Frederick, 54
Macau, 223
MacLehose, Sir Murray, 6, 86, 102, 150,
152, 177, 17980, 182, 184, 218,
232, 244, 290
MacLeod, Sir Hamish, 167
Mandatory Provident Fund, 89
Marine Department, 75

Mass Transit Railway Corporation
(MTRC), 3, 122, 124, 126, 1289,
1312, 138, 158, 236, 271
McKinsey reforms, 6, 71, 181, 209, 2324,
256
Medical Council of Hong Kong, 2845,
288
Mental Health Review Tribunal, 286
Morris, Paul, 601
National Peoples Congress (NPC)
(Standing Committee), 178, 26, 28,
37, 55, 57, 259, 293
11/9/09 12:15:22 PM
392 Index
National Security (Legislative Provisions)

Bill, 42 see also Article 23
Neighbourhood Watch, see Police
New China News Agency, 18, 376
New Public Management, 1, 3, 95, 102,
1113, 117, 303
New World First Bus Company, 134
New Territories, 6, 89, 70, 179, 209, 214,
226
Ng Ka-ling v Director of Immigration, 37
Ng, Margaret, 41
Obscene Articles Tribunal, 287
Office of the Telecommunication Authority,
74, 123
Official Receivers Office, 74
Ombudsman, 23, 7, 11, 20, 116, 123, 218,
228, 250, 2578, 250, 2578, 260,
262, 2647, 2708, 286, 288
complaints to, 2746
direct investigations, 271, 274, 2778
INCH system, 2747
jurisdiction, 2703
Ombudsman Ordinance, 273
OMELCO (Office of Members of the
Executive and Legislative Council)
see Legislative Council; Police
One country, two systems, 27, 37, 290,
300
Outsourcing, 84, 87, 902, 101, 105, 112,
129, 1345, 145, 227
Patients Charter, 245
Patten, Chris, 10, 79, 180, 183, 232, 2356,
23940, 2434, 247, 256, 259, 265,
290
Pearl River Delta, 223
Penny stocks incident, 54, 83 see also Ma
Si-hang, Frederick
Performance appraisal, see Civil Service
Performance pledges, 10, 212, 2369, 248,
25960, 265
Personal Data (Privacy) Ordinance, 261
Planning Department, 74, 219
Po Leung Kuk, 9, 85, 121, 133
Police, 68, 10, 32, 40, 423, 52, 60, 70,
757, 88, 969, 102, 1045, 112,
114, 169, 2078, 233, 236, 2402,
ch.15 Index(p.385-396).indd 392
247, 249, 2534, 259, 2678, 273,

281, 303 see also Public Order
Ordinance, Article 23, Complaints
Against the Police
Commissioner, 52, 60, 77, 98, 208,
240, 259
complaints see Complaints Against
Police Office; Independent Police
Complaints Council; Police

Complaints Committee
corruption, 78, 70, 114, 233, 2678,
283
expatriates in, 7, 32, 96, 240
Junior Police Call, 240
neighbourhood policing, 240
OMELCO police group, 279
organisation, 77
pay scale, 105
performance pledge, 238
ranks in, 77, 112, 240
recruitment, 88
responsiveness, 2402
size, 75
Service Quality Wing, 240
vision statement, 241, 349n
Police Complaints Committee, 279
Police Force Council, 104
Policy, 13, 59, 125, 1922, 289, 31,
334, 36, 456, 50, 523, 5762,
6466, 71, 73, 76, 7887, 93, 99,
116, 119, 1213, 128, 131, 1378,
142, 145, 147228, 2315, 240,
2424, 2469, 2513, 255, 259,
2637, 269, 272, 285, 287, 289, 292,
2948, 3001, 3036 see also Chief
Executive: policy address; Civil
Service: Policy Bureaus; Education
policy; Health policy; Housing
policy; Transport policy; Welfare
policy
formulation, 8, 12, 14, 20, 22, 53, 76,
78, 823, 147, 1501, 175, 177, 181,
189, 193, 196, 201, 208, 212, 222,
2945, 301, 3034
ideational, 196, 206, 2223
implementation, 6, 89, 14, 22, 45, 64,
1501, 199, 20128
incremental, 71, 85, 163, 170, 177, 179,
181, 2057, 218
11/9/09 12:15:23 PM
Index 393
rational, 14951, 173, 175, 1778,

1847, 18991, 194, 196, 199200,
206, 20810, 213, 223
symbolic, 177, 180, 1834, 200, 206,
2104, 2179
Policy instruments, 2025
Political appointments, 623, 82, 84, 142,
144 see also Principal Officials;
Deputy Directors of Bureaus, 49, 56,
62, 295, 301
Political Assistants, 49, 56, 625, 84,
116, 295, 302
Political neutrality, 67, 32, 62, 70, 812,
923, 116, 2912, 294, 303
Political parties, 16, 18, 346, 43, 69, 125,
150, 158, 160, 167, 173, 1756, 182,
190, 192, 196, 199, 206, 2201, 224,
243, 253, 295, 300, 3045 see also
Civic Party; DAB, Democratic Party;
Frontier, Liberal Party
Post Office, 745, 88, 1234
Precious Blood Jubilee School, 183, 209,
211
Preliminary Working Committee, 32
Press, 41, 145, 163, 199, 2534, 287
see also Journalists Association
freedom of, 41, 2589
opposition to Article 23, 41
Pressure groups, 15, 36, 423, 125, 1501,
161, 173, 1756, 180, 1823, 188
90, 1923, 196, 199, 2023, 206, 211,
213, 2212, 228, 233, 2434, 2467,
253, 262, 267, 269, 294, 296, 299
Prevention of Bribery Ordinance, 8, 96,
1135, 202
Principal Officials, 124, 201, 27, 29,
345, 43, 49, 526, 5866, 79, 84,
136, 144, 150, 164, 168, 206, 294
accountability of, 49, 53, 58, 60, 656,
144, 168, 293, 301, 305
appointment, 5860
Code of Practice, 62
removal of, 537, 612
Principal Officials Accountability System,
124, 20, 22, 34, 49, 512, 57, 59,
646, 71, 73, 78, 804, 93, 98, 127,
143, 161, 192, 196, 208, 2935, 298
criticisms of, 537, 646
introduction of, 52
ch.15 Index(p.385-396).indd 393
Printing Department, 321n

Privacy Commissioner, 3, 7, 259, 2613
Privatisation, 76, 84, 87, 90, 11920, 124,
126, 145
Productivity Commission, 126
Professional Teachers Union, 61
Property prices, 11, 170
Protection of Data Ordinance, 78
Provisional Legislative Council (PLC), 31,
37, 45, 266, 325n
Public Accounts Committee see Legislative
Council
Public Officers Pay Adjustment Bill, 89
Public Opinion Programme, 42, 227
Public Order Ordinance, 259, 281
Public/private partnerships, 92, 145, 2045,
2267
Public Service (Administration) Order,
259, 281
Public Service (Disciplinary) Regulations,
71, 114
Public Service Commission (PSC), 7, 71,
98, 1012, 1101, 114, 306
Qian Qichen, 80
Qiao Xiaoyang, 18
Race Discrimination Ordinance, 1945,
2623
Radio Television Hong Kong, 74, 123
Rating and Valuation Department, 74
Regional Services Department, 12, 501,
64, 75n, 96
Registration and Electoral Office, 74
Registration of Persons Tribunal, 286
Regularity audits, 225
Representative government, 267, 50, 233,
290
Right of Abode,
mainlanders born of Hong Kong
parents, 13, 33, 368, 2667, 286,
294
political appointments, 634
Principal Officials, 63
senior civil servants, 32, 98
see also Court of Final Appeal
Riots, 7, 10, 86, 121, 179, 182, 270
see also, Kowloon Riots, 1956;
Star Ferry Riots, 1966
11/9/09 12:15:23 PM
394 Index
Royal Instructions, 26, 127

Rule of Law, 67, 33, 38, 44, 57, 70, 956,
116, 233, 235, 258, 2701
Save Lamma, 21920
Scott, WD and Co., 122
Secretariat on Civil Service Discipline, 114
see also Civil Service: discipline
Secretary for the Civil Service, 53, 556,
82, 90, 97, 1067, 109, 115, 164
Secretary for Constitutional Affairs, 38, 53,
57, 60, 143, 169, 255
Secretary for Education and Manpower,
601, 226
Secretary for Health, Welfare and Food 43,
57, 60, 62, 189, 2156, 285
Secretary for Home Affairs, 59, 140, 262
Secretary for Justice, 1, 40, 46, 523, 59,
712, 74, 79
Secretary for Justice v Ocean Technology
and Others, 46
Secretary for Planning and Lands, 141, 143
Secretary for Security, 17, 40, 423, 55, 60,
169, 280
Secretary for Transport, 209
Security Bureau, 72, 756, 254, 280
Senior Non-Expatriate Officers

Association, 55 see also Hong Kong
Senior Government Officers
Association
Serving the Community, 101, 86, 116,
251, 259
Severe Acute Respiratory Syndrome
(SARS), 11, 43, 45, 567, 87, 135,
154, 170, 190, 2156, 223, 246
panel of experts, 567
Select Committee on SARS, 557, 115,
2156, 218
Sewage Services, 123, 132
Sex Discrimination Ordinance, 261
Sino-British Agreement (1984), 5, 10, 27,
32, 99, 177, 211, 258, 2901, 300
Small Claims Tribunal, 287
Small house policy, 226
So, Andrew, 272, 275 see also Ombudsman
Soccer betting, 1945, 2034
So Kam-leung, Gregory, 63
ch.15 Index(p.385-396).indd 394
Social Welfare Department, 756, 86, 88,

133, 138, 1646, 188, 199, 237
Societies Ordinance, 1834
Society for Community Organisation, 168,
262
Society for the Protection of the Harbour,
45, 220
Staff Associations, see Civil Service:
unions
Standing Commission on Civil Service
Salaries and Conditions of Service
see Civil Service Pay and Conditions
of Service
Star Chamber see Budget
Star Ferry riots, 1966, 7, 10, 86, 121, 179,
182
Statutory bodies, 1, 3, 67, 11, 50, 73,
79, 867, 11920, 123, 125, 13645,
154, 185, 2156, 218, 236, 240,
2467, 263, 2712, 275, 2778, 302,
accountability of, 120, 1369
boards, 91, 125, 133, 1369, 144,
2467, 253, 302, 334n
Suen Ming-yeung, Michael, 60
Sutherland Report, 1978
Szeto Wah, 27
Tai, Alice, 272 see also Ombudsman
Tang Ying-yen, Henry, 59, 154
Target-based management, 87
Tax, 1, 57, 145, 32, 55, 85, 121, 126,
131, 153, 1558, 160, 168, 1789,
193, 195, 2034, 20910, 221, 246,
249, 297, 307n see also Budget;
Goods and Services Tax
profits, 157
salaries, 1557
Taxi drivers, 8, 40, 209
Television and Licensing Authority, 74
Territory Development Department, 321n
Thynne, Ian, 26, 129
Tien Pei-chun, James, 43, 89
To Kun-sun, James, 27980
Town Planning Board v Society for the
Protection of the Harbour, 45
Trade and Industry Department, 74
Trade Development Council, 126, 128
11/9/09 12:15:23 PM
Index 395
Trade unions, 9, 35, 41, 43, 56, 90, 11920,

1834, 189, 219, 238, 258
Trading Funds Ordinance, 123
Transport Complaints Unit, 284
Transport Department, 75, 138, 209, 236,
276, 284
Transport policy, 20910
Tsang Chun-wah, John, 59, 160
Tsang Tak-sing, 5960
Tsang Yam-kuen, Donald, 3, 14, 17,
29, 35, 589, 612, 65, 73, 78, 82,
84, 90, 93, 109, 117, 11920, 124,
135, 1445, 151, 167, 178, 200,
206, 219, 221, 2234, 2523, 255,
291, 2956, 299302, 3045
see also Chief Executive
Tsang Yok-sing, Jasper, 64
Tung Chee-hwa, 28, 345, 434, 4950, 57,
62, 65, 73, 80, 82, 91, 96, 109, 119,
214, 222, 247, 251, 254, 290, 292,
295, 297 see also Chief Executive
election, 28, 35
popularity, 28, 254
relations with political parties, 35, 295
resignation, 57
Tung Wah group, 9, 85, 121, 133
Unemployment, 11, 87, 117, 120, 157, 169,
1869, 290
University Grants Committee (UGC), 734,
128, 1979, 307n
Urban Council, 6, 12, 4951, 64, 96, 122,
172, 193, 264
Urban Services Department, 12, 50
United Nations, 259, 263, 27980
University of Hong Kong, 42, 254, 268
Urban Renewal Authority, 137, 139, 141,
143, 267
Urban Renewal Authority Ordinance, 137,
139
Water Supplies Department, 74, 224, 237,

284
Welfare policy, 8, 86, 1212, 132, 1589,
171, 179, 187, 18990
West Kowloon Cultural District, 92, 115,
1345, 170
White papers, 9, 193, 243
Wilson, Sir David, 183
Womens Commission, 128
Wong Kin-chow, Michael, 262
Wong Wing-ping, Joseph, 556 see also
Secretary for the Civil Service
Wong Yan Lung, 59 see also Secretary for
Justice
World Health Organisation, 215
World Trade Organisation, 242, 281
Wu, Anna, 262, 288
Xi Yang, 41
Xu Jiatun, 26
Yau Tang-wah, Patrick, 60
Yeoh Eng-kiong, 56
Yeung Sum, 158
Youde, Sir Edward, 183
Yu Chung-yin, Patrick, 262
Yue Chung-yee, Denise, 60
Zen, Cardinal, 91
Zhou Nan, 18
Zhuhai, 223
Value for money audits, 4, 85, 92, 141,

152, 172, 2245, 231, 234
Vedung, Evert, 202
Voluntary retirement scheme, see Civil
Service
Voluntary welfare organisations, 126,
1323
ch.15 Index(p.385-396).indd 395
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critical constitutional, organisational and policy problems and examines their