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The constitution of economic liberty in Hong Kong

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  • 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
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    Cited by:

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

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    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

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