Hands On or Hands Off?: The Nature and Process of Economic Policy in Hong Kong

8. How Economic Policies Emerge

8 How Economic Policies Emerge Democratic deficit You do not have to be in Hong Kong for very long before you realise that there is something strange about the policy formation process, whether in economics or any other policy domain. Moreover, depending on what you read or whom you listen to, there is a mixture of frustration, embarrassment, resignation and even, among the establishment, a sort of collective guilt complex about it all. These mixed emotions arise essentially from the lack of democracy and from the opacity of the substitute procedures. In the mature democracies of the world, it is clear that the ultimate sanction of policy rests with elected powers. Thus, in the United States the elected President has the mandate to appoint an administration around him and to rule with a constitutionally defined executive authority. In various matters he needs to obtain congressional approval. But, again, the Senate and the House ofRepresentatives are elected bodies. In the United Kingdom the mandate to govern rests effectively with the prime minister, who heads the majority party elected to the House of Commons and who can usually therefore count upon parliamentary support for his decisions. Other countries range across the spectrum between the presidential and parliamentary systems. In all cases, however, economic policies, or any other, are set and executed by those who have a legitimate democratic mandate. The way in which economic policy is fornmlated in those environments may vary greatly. It may be driven by party manifestos. It may filter upwards from skilful civil servants. It may reflect the personal agenda of the political leader, or a small group of politicians or cronies surrounding him or her. It 130 The Policy Process may, especially as election dates draw near, acknowledge prevailing populist sentiment. More probably it will be a combination of these. But the crucial factor in the democratic environment is that the electorate has the opportunity to kick the president or ruling party out of office at the end of their term. In the meantime they have the mandate to govern, and generally speaking they get on with that job. Meanwhile, even though many people may acquiesce only reluctantly, or disapprovingly, to the policies and measures which are adopted - often the elected government will have been the first choice of fewer than half the voters - they are usually willing to accept and respect the governing mandate. Only rarely will opposition, resentment or emotions run so high as to provoke strong enough reactions to deflect the government from its chosen path. All ofthat would be taken for granted by anyone living in such countries. Hong Kong is different. The lack of democracy results in sections of the community often being deeply sceptical about the motives, justification or wisdom of policies. In recognition of that and as a response to it, the administration nowadays falls over itself to try to achieve popular approval for all it does. Origination of policies and the missing ingredient Where do the ideas and initiatives for economic policy in Hong Kong come from, and how is it decided which ones shall proceed? There is no very clear, definitive answer. The impression gained is that the government pays lip service to the tradition of a market-driven economy with minimal government interference - whether under the slogan of "positive non-interventionism" or "market leads, government facilitates" and then devises policies on spending, taxation and so on, which are consistent with that philosophy. Civil servants, the Legislative Council, consultants and advisory committees and the like may all play some role in mapping out the detail. None of that is at all surprising or controversial. It is extremely hard, however, as the discussion in the preceding chapter has proved, to identity any persons or groups within the institutional infrastructure that provide the intellectual leadership or play a clearly significant part in the formation of the economic strategies or policies. Civil servants prepare the papers which form the basis for the policy decisions How Economic Policies Emerge 131 taken by the chief executive after discussion in the Executive Council, but who originates the strategic direction? Is it top-down or bottom-up? Who actually inspires the idea and then makes the running for such diverse initiatives as, for example, Cyberport, a design centre, the Lantau cable car, a goods and services tax, the Science Park, the suspension or resumption of land sales, or a push to allow more...