IDEAS home Printed from https://ideas.repec.org/a/kap/copoec/v26y2015i3p307-327.html
   My bibliography  Save this article

The constitution of economic liberty in Hong Kong

Author

Listed:
  • Eric Ip

Abstract

The constitutional foundations of economic liberty in Hong Kong, the freest economy in the world according to many, are little understood. So as the perceived spread of collusion, cronyism, and corruption in the territory ever since the 1997 transfer of sovereignty despite China’s promises that little change will be made to the pre-existing way of life. Relying on the analytical tools of constitutional economics, this article argues that the Beijing-ratified Hong Kong Basic Law preserved only the form of the territory’s original, British-descended, constitution, not the substance; as witness the insertion of contradictory interventionist mandates, and the consequent reversal of principal-agent relationship of government to the business elite. The erosion of economic freedom over the past 17 years is explicable, at least partly, by the entry into force of the Basic Law, which has transformed the Hong Kong state from the impartial and passive umpire it once was into a partisan social engineer and economic gamesman, thereby unleashing skyrocketing rent-seeking opportunities. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Eric Ip, 2015. "The constitution of economic liberty in Hong Kong," Constitutional Political Economy, Springer, vol. 26(3), pages 307-327, September.
    • Handle: RePEc:kap:copoec:v:26:y:2015:i:3:p:307-327
    DOI: 10.1007/s10602-015-9187-1
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10602-015-9187-1
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10602-015-9187-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alvin Rabushka, 1989. "A Free-Market Constitution for Hong Kong: A Blueprint for China," Cato Journal, Cato Journal, Cato Institute, vol. 8(3), pages 641-656, Winter.
    2. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(4), pages 803-832, December.
    3. Brousseau,Éric & Glachant,Jean-Michel (ed.), 2008. "New Institutional Economics," Cambridge Books, Cambridge University Press, number 9780521876605, January.
    4. James Buchanan, 2008. "Same players, different game: how better rules make better politics," Constitutional Political Economy, Springer, vol. 19(3), pages 171-179, September.
    5. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    6. Dieter Helm, 2010. "Government failure, rent-seeking, and capture: the design of climate change policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(2), pages 182-196, Summer.
    7. Torsten Persson & Guido Tabellini, 2005. "The Economic Effects of Constitutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661926, December.
    8. James M. Buchanan, 2008. "Constitutional Political Economy," Springer Books, in: Readings in Public Choice and Constitutional Political Economy, chapter 17, pages 281-293, Springer.
    9. Hayo, Bernd & Voigt, Stefan, 2010. "Determinants of constitutional change: Why do countries change their form of government?," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 283-305, September.
    10. Zane Spindler & Xavier De Vanssay, 2003. "Constitutional Design for a Rent Seeking Society: The Voting Rule Choice Revisited," Constitutional Political Economy, Springer, vol. 14(2), pages 95-105, June.
    11. Polterovich, Victor & Popov, Vladimir, 2007. "Democratization, Quality of Institutions and Economic Growth," MPRA Paper 19152, University Library of Munich, Germany.
    12. Ian Scott, 2007. "Legitimacy, Governance and Public Policy in Post-Handover Hong Kong," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 29(1), pages 29-49, June.
    13. Natalia Dinello & Vladimir Popov (ed.), 2007. "Political Institutions and Development," Books, Edward Elgar Publishing, number 12689.
    14. Tom Ginsburg, 2010. "Public Choice and Constitutional Design," Chapters, in: Daniel A. Farber & Anne Joseph O’Connell (ed.), Research Handbook on Public Choice and Public Law, chapter 8, Edward Elgar Publishing.
    15. Martin Leschke, 2000. "Constitutional Choice and Prosperity: A Factor Analysis," Constitutional Political Economy, Springer, vol. 11(3), pages 265-279, September.
    16. Brousseau,Éric & Glachant,Jean-Michel (ed.), 2008. "New Institutional Economics," Cambridge Books, Cambridge University Press, number 9780521700160, January.
    17. Polterovich, Victor, 2007. "Institutional Trap," MPRA Paper 20595, University Library of Munich, Germany.
    18. Xavier Vanssay & Vincent Hildebrand & Zane Spindler, 2005. "Constitutional Foundations of Economic Freedom: A Time-Series Cross-Section Analysis," Constitutional Political Economy, Springer, vol. 16(4), pages 327-346, December.
    19. Robert H. Bates & Avner Greif & Margaret Levi & Jean-Laurent, 1998. "Analytic Narratives," Economics Books, Princeton University Press, edition 1, volume 1, number 6355.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Scartozzi, Cesare M., 2017. "Political Reforms vs. Undemocratic Institutional Arrangements in Hong Kong," MPRA Paper 91325, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. T. Durant, 2011. "Making executive politics mutually productive and fair," Constitutional Political Economy, Springer, vol. 22(2), pages 141-172, June.
    2. Claude Ménard & Mary M. Shirley, 2010. "The Contribution of Douglass North to New Institutional Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00654327, HAL.
    3. Mike, Károly, 2016. "Merre vezessen a magyar kapitalizmus útja?. Látkép Ronald Coase világítótornyából [Which course for Hungary s capitalism?. A view from Ronald Coase s lighthouse]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 597-614.
    4. Lucas, David & Boudreaux, Christopher, 2018. "Federal Regulation, Job Creation, and the Moderating Effect of State Economic Freedom," MPRA Paper 92593, University Library of Munich, Germany.
    5. Raghuram G. Rajan, 2009. "Rent Preservation and the Persistence of Underdevelopment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 178-218, January.
    6. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2009. "Концентрация Доходов, Нестабильность Демократии И Экономический Рост [Income Concentration, Instability of Democracy and the Economic Growth]," MPRA Paper 27561, University Library of Munich, Germany.
    7. Mark Koyama, 2010. "The political economy of expulsion: the regulation of Jewish moneylending in medieval England," Constitutional Political Economy, Springer, vol. 21(4), pages 374-406, December.
    8. Brousseau, Eric & Garrouste, Pierre & Raynaud, Emmanuel, 2011. "Institutional changes: Alternative theories and consequences for institutional design," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 3-19, June.
    9. Petr Wawrosz, 2011. "Dosahování a narušování institucionální rovnováhy v redistribučních systémech [Creation and Violation of Institutional Equilibrium in Redistribution Systems]," Politická ekonomie, Prague University of Economics and Business, vol. 2011(4), pages 526-546.
    10. David S. Lucas & Christopher J. Boudreaux, 2019. "The Interdependence of Hierarchical Institutions: Federal Regulation, Job Creation, and the Moderating Effect of State Economic Freedom," Papers 1903.02924, arXiv.org.
    11. Scott Gehlbach & Konstantin Sonin & Ekaterina Zhuravskaya, 2010. "Businessman Candidates," American Journal of Political Science, John Wiley & Sons, vol. 54(3), pages 718-736, July.
    12. Catherine Locatelli & Sylvain Rossiaud, 2011. "A neoinstitutionalist interpretation of the changes in the Russian oil model," Post-Print halshs-00631115, HAL.
    13. Georgy Egorov & Konstantin Sonin, 2011. "Dictators And Their Viziers: Endogenizing The Loyalty–Competence Trade‐Off," Journal of the European Economic Association, European Economic Association, vol. 9(5), pages 903-930, October.
    14. Erdogdu, Erkan, 2013. "A cross-country analysis of electricity market reforms: Potential contribution of New Institutional Economics," Energy Economics, Elsevier, vol. 39(C), pages 239-251.
    15. Voigt, Stefan, 2011. "Empirical constitutional economics: Onward and upward?," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 319-330.
    16. repec:cte:werepe:we041905 is not listed on IDEAS
    17. James A. Robinson, 2006. "Equity, Institutions and the Development Process," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 17-50.
    18. Jean-Michel Glachant, 2012. "Regulating Networks in the New Economy," Review of Economics and Institutions, Università di Perugia, vol. 3(1).
    19. Michael Regan, 2017. "Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region," IJFS, MDPI, vol. 5(1), pages 1-28, February.
    20. Emanuel Kohlscheen, 2006. "Why are there serial defaulters? Quasi-experimental evidence from Constitutions," DEGIT Conference Papers c011_010, DEGIT, Dynamics, Economic Growth, and International Trade.
    21. Milton Fernando Montoya (Editor), 2017. "Trends and challenges in electricity and oil regulation," Books, Universidad Externado de Colombia, Facultad de Derecho, number 949, August.

    More about this item

    Keywords

    Economic liberty; Rent-seeking; Constitutional design; Hong Kong; D02; D72; H11; K10; K23;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:copoec:v:26:y:2015:i:3:p:307-327. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.