Leo Goodstadt is one of the foremost critics of the Hong Kong government. Prior to the return of the territory to China in 1997, he was head of the government's Central Policy Unit and has lived in the city for over 50 years. As something of an insider he is well placed to develop this detailed critique of the management of the city. He knows the data sources, the policy processes and the policy detail, and he has close knowledge of many of the key actors.
The tone and content of this narrative are clear and uncompromising from the start. The people of Hong Kong have had to cope with “the damage caused by the incompetence and the misguided convictions of those in power” (p. 3). Here, “those in power” refers to the four chief executives of the Special Administrative Region since 1997. And according to Goodstadt, the latest incumbent, Carrie Lam, offered little hope in her election manifesto that things would get any better. Rather, “[h]er confusion over key indicators of Hong Kong's continuing success was a symptom of the inferior performance which Hong Kong has had to put up with from all its chief executives and the average minister” (p. 4).
Goodstadt sets out to demonstrate this claim of incompetent leadership through an initial exploration of the way in which the Basic Law, Hong Kong's post-1997 constitution, has been interpreted and implemented. This is then followed by an account of how the Hong Kong civil service was re-organized, re-oriented and made subject to a ministerial system. The remainder of the book focuses on four key policy areas: housing policy; education policy; health and safety; relations with the Mainland. The key message is that the ministerial system was ill-conceived and created confusion over roles and accountability; successive post-1997 administrations have failed to fulfil their housing policy promises in terms of building programmes and affordability; the government has eschewed responsibility to ensure that the privately owned housing stock is properly maintained; and health and safety have suffered because of a slavish adherence to (unnecessary) budgetary restraint and market ideology.
Within this well-documented and engaging analysis, Goodstadt offers numerous instances of the ways in which a deeply entrenched belief in the superiority of the market – and the inferiority of the public sector – have resulted in the systematic neglect of the wellbeing of Hong Kong people. Perhaps the primary example is the retreat from intervention in the housing market. Tung Chee-hwa, the first chief executive, inflicted “maximum austerity” in response to the Asian financial crisis and axed the ambitious public housing programme which he had announced soon after taking on his new role. To protect the interests of Hong Kong developers, new building for public rental was cut back drastically and the subsidized home ownership scheme was terminated. His successor, Donald Tsang, maintained this attack on the public housing programme including the disposal of the Hong Kong Housing Authority`s substantial land bank. In subsequent years, the price of flats continued to escalate, space standards declined and waiting lists grew. Predictably, when the folly of these policies became evident, there was a severe shortage of building sites for any new public housing programme. Goodstadt observes that this should never have occurred given that the colonial government had controlled almost a third of the total land area of the territory.
Another example comes from the education sector. In a chapter titled, “Students at the market's mercy,” he argues that the Hong Kong government invested relatively little in higher education, despite the rhetoric, and maintained a cap on undergraduate places. This meant that around half of the students qualified to study for a first degree were unable to do so. A four-year degree was introduced with little new funding and self-financing programmes were encouraged as the market response to the lack of university places. Goodstadt is particularly scathing about the introduction of self-financed associate degrees, which he regards as an inadequate, low quality commercial solution encouraged by the Hong Kong government to fill the gap in higher educational opportunities. Drawing on various reports and statistics, he suggests that many parents and students were misled into paying significant fees for qualifications that offered little if any advantage in the labour market – nor were they necessarily a stepping stone to a first degree.
A City Mismanaged is a surprisingly good read for a book of this kind. It can also be approached and interpreted in a number of different ways and this gives it resonance and reach well beyond its empirical focus on Hong Kong. For those with a particular interest in the city, it offers a critical perspective on developments in key policy areas over the last two decades, particularly housing and education policy. But the critique is strengthened considerably by Goodstadt's novel argument that far from the Basic Law being imposed on an unwilling Hong Kong citizenry, the fundamental problem is that it has not been properly implemented. Rather, it has been cherry-picked by Hong Kong's chief executives. They have “faithfully observed” Article 107 (which refers to fiscal balance), which has been used to justify minimal government spending on the public sector and social welfare. Funding has, however, been generous for major infrastructural or pro-business projects. And in seeking to find favour with Beijing, the Hong Kong government has focused on the sections associated with national security, national education and political representation. Goodstadt shows, however, that the Basic Law had a lot to say about maintaining and improving social welfare and public provision, and it is the Chinese government itself which has had to remind the Hong Kong chief executive of these obligations – to little effect it seems.
The book can also be read as a strong defence of the public sector and the public sector ethos, and is an excellent case study of the damaging consequences of the policy prescriptions of New Public Management and neoliberalism.
The narrative and the analysis do suffer, however, from a weakness. There is not much acknowledgement of path dependency. While there are references to the pre-1997 period they are relatively rare. One is left with the impression that the belief that the public sector is inherently wasteful, inefficient and that public services should be outsourced and privatized is somehow a product of post colonialism, and that prior to the handover, Hong Kong was a well-oiled machine run by a super-efficient bureaucracy. I doubt if Goodstadt takes that position, at least not without some qualification, but it is an issue that would have been better addressed and confronted in the Introduction. Otherwise, it allows less sympathetic critics to dismiss much of it as post-colonial, sour grapes. This would be a pity because this is a very well-grounded and timely study of the specific and negative impacts of policies driven by pro-market dogma, and a powerful restatement of the role of the public sector.
