From Outsiders to Insiders - The Change in Hong Kong's Governance

On the face of it, Hong Kong's governmental structure has not changed greatly since the handover. The senior civil servants remain more or less in place, the appointed Governor is replaced by a selected Chief Executive with similar powers, an elected Legislative Council continues to function, the Basic Law assures most of the freedoms that were de facto in place under British rule. The biggest change is perhaps the abolition of the municipal councils.

Yet there is another dimension in which the governmental structure has changed radically. It is that Hong Kong is no longer ruled by outsiders but by an indigenous elite. The executive branch of Government was formerly headed by outsiders - administrative officers, senior civil servants and a Governor from the UK. In the later years of the colonial era many in the lower ranks and subsequently even senior officials were replaced by local counterparts, but the Governor and the driving force of government remained external. Now, Hong Kong's Government is completely localised.

On the face of it, this change appears a good thing. Colonial rule is distasteful; rule by local people is preferable in a host of ways to rule by outsiders from a distant country. Yet the transition to local rule collapses what were unique and redeeming features of Hong Kong's governance regime.

Consider the paradox of Hong Kong's governance before the handover. On the face of it, the governmental system was extraordinarily deficient: it was a colonial autocratic structure, with mechanisms owing more to nineteenth, or even eighteenth, century Britain than those of modern government. It was rule by appointees. And it was rule by outsiders. One might expect, therefore, that Hong Kong under colonial rule would have been a corrupt and decayed backwater. Yet the fact is that Hong Kong was extremely successful, accommodating immense social and economic transformations with very little stress, flourishing as one of the freest and most successful economies and societies in the world. How can this paradox be explained?

We suggest that the critical success factor of Hong Kong's pre-handover governance was precisely that it was headed by outsiders. Given that these British civil servants and diplomats had limited connections with the local community and generally retired to Britain, they had the incentive to perform their functions efficiently and avoid entanglement with local interests. There was of course corruption, particularly at lower levels, and the heads of the major hongs enjoyed the privileges of Exco membership, yet on the whole, with exceptions, the burden remained manageable, allowing the Government to perform more as a referee rather than as a player. Colonial oddities such as the advisory committee system provided a channel for the colonial rulers to accommodate the interests of local elites. There was some genuine debate and consultation, albeit that it was selective and did not involve all sectors of the community. Policy decisions that took some account of divergent points of view. Patten appointed Tung to his executive council: at least opposing voices were heard.

Now consider Hong Kong's present situation. The outsiders have been removed; now all the mechanisms of government are operated by local civil servants and local elites. Where are the opposing voices on Tung's executive council? The largest player is now the referee. The Cyberport land allocation, the waivers of stock market regulations, the decision not to prosecute well-connected persons all exemplify this new paradigm.

The natural tendency of a system such as this is to degenerate into cronyism and dictatorship - to the natural pattern of Asian government in, say, the 1970s: the regime of a Marcos, a Suharto. Or - to take more distant parallels - nineteenth century America as dominated by the Rockefellers, or eighteenth century Britain with its aristocratic families. These are possible scenarios for Hong Kong's future.

Fortunately, Hong Kong has some bulwarks against such a future. It does have a reasonably free press which exposes and criticises cronyism; it does have some elected representatives who do the same. The general public have to some extent grown to expect to accountability from their rulers. There is an independent court system, and institutions, traditions and procedures, not least within the Civil Service itself, that safeguard against abuse. The Hong Kong Government lacks some potential instruments of oppression, such as a military. Beijing itself may also provide a check on the excesses of local elites. And international developments, especially the onward march of democracy throughout the region and the reduction of barriers to trade and information flow, provide further pressure for openness and a level playing field.

But Hong Kong is unlikely to be safe as long as it persists with its colonial governance structure after the colonials have departed. The guards against cronyism and the protections for individual liberty are slender and can be set aside by determined interests. The governance must be transformed into a modern democratic system; only a democracy is likely to generate a President Roosevelt with the determination to tackle the elites. Laws and institutions need to be strengthened: Hong Kong badly needs an anti-trust law and an enforcement agency. Regulatory procedures need to be made clear and transparent: the opportunity for elites to favour one another at their discretion should be minimised. Analysis of policy needs to be improved: inconsistencies and favouritism dressed up as objective analysis need to be challenged. Academics could contribute more here. And the people themselves need to become more engaged. Ultimately we get the government we deserve.