ABSTRACT
Problems in budgeting often cannot be completely understood without the appreciation of the political constraints and institutional context of the budgeting system.1 At the same time, changes in human systems are complicated and hard to accomplish not only owing to technical complexity but also due to resistance from different stakeholders and actors induced by the incentive structure superimposed by the institutional setting.2 From these perspectives, to gain a more comprehensive view of the budget problem of a government and the reasons behind the difficulties of resolving it, it will be more appropriate to view it as a problem embedded in a bigger structural and institutional context. The budget problem of Hong Kong presents such a scenario.
