ABSTRACT

Introduction Together with Singapore, Hong Kong ranks as the forerunner of public sector reform in Asia along the lines of the New Public Management (NPM) paradigm (Cheung 2004). As a former colony of Britain until 30 June 1997, Hong Kong had been subject to the influence of British-style NPM reforms since the 1980s. However, public sector reform was driven more by domestic political and bureaucratic factors, particular those that shaped Hong Kong’s political transition to become a special administrative region (SAR) of China in July 1997 (Cheung 2006). Whereas public sector reform in the West was often driven by economic and fiscal decline, as well as the rising public backlash to ‘big government’, Hong Kong’s public sector reform first took place in the absence of these factors but embraced a pro-civil service agenda (Cheung 1996a). It was only after the 1997 handover, when a prolonged economic recession resulted in fiscal stress and the need for retrenchment, that the government began to embark on more ambitious plans in civil service reform, public sector downsizing and privatization. Most lately, as the economy rebounds and fiscal surplus reaccumulates, both the pace and emphasis of reform have begun to readjust; the privatization programme has slowed down and government starts to recruit civil servants again. Public sector reform is part of the process of repositioning public governance, and should be understood within the wider context of the change in the role and scope of functions of the state. In the West, NPM came hand in hand with the movement to reposition governance as regards how the society and economy should be run – resulting in the concurrent taming of the administrative bureaucracy and the transformation of the public sector. Among OECD countries, this meant ‘the rolling back of the welfare state, the modification if not abandonment of the socialist ambitions, and an embrace of liberal capitalism, private enterprise, and Big Business (as opposed to Big Government)’ (Caiden 2007: 12). In the case of Hong Kong there has been, on the reverse, a steady shift towards a pro-state regime, in contrast to the laissez-faire state in the heyday of colonial rule. Because of its defective constitutional design, the SAR government has to deliver more policy and service outputs in order to earn legitimacy. Post-colonial

sentiments have also fuelled rising expectations and the expansion of government responsibility in social and economic development, amid a more restless and demanding population eager to find a new sense of identity and future for the SAR. The need for economic restructuring in light of globalization further requires more strategically directed government actions. All these have added up to an enhanced state role and a more regulatory regime, somewhat contradictory to the official rhetoric of minimum government. Caught at a crossroads of transition, between legacies of small government and non-interventionism on the one hand, and new exogenous and endogenous needs for expansion and interventions on the other, the government faces the paradox of having both to reassert the ‘public’ and the role of the state in economic and social management, and to emphasize the use of more market-oriented means to achieve its public goals. Reviewing Hong Kong’s trajectory of public sector reform and state role, this chapter seeks to explain and conceptualize the rise of a nascent developmental regime.