How Authoritarian Government Justifies Policy Under-Response: Housing Shortage in Hong Kong

Liberal economic perspective suggests free market is the most efficient form of economic activities. In the most capitalist region in the world, Hong Kong’s housing asset price is among the highest and brought huge wealth to many. On the other hand, in contrast, it becomes hardly affordable to many of the residents particularly the youngsters living and working in the territory, and amplified the scale of the recent political turmoil led by the younger generation. The root causes of the affordability problem, according to financial experts, are attributed to the gigantic inflation resulted from the global quantitative easing and the shortage of land and housing supply. However, housing problem is not barely a supply and demand issue, policymaker’s ignorance leads to inattention to the social demand and therefore inaction in the corresponding policy supply is not addressed sufficiently in literatures. In fact, Hong Kong government withdrew from the housing market, except for the poor, and left it all to the private sector in 2002, causing the average annual public and private housing supply dropped hefty from 38,900 and 21,900 units for the period 1997-2002 to 14,600 and 9,900 units respectively for 2007-2012. The perplexity of the policy under-response is to explain what causes the attention deficit and thus shortage of policy supply. In this article, I argue, Hong Kong, as an authoritarian government, justified the under-response through preaching the myth of free economy golden rule and exaggerating the previous ambitious housing programme as the policy disaster, and thus convinced other political stakeholders, particularly the opposition and public, the legitimate of inaction of governmental intervention, even in the presence of press freedom. Executive policy agendas, debates in legislative council, newspaper report and commentaries, and housing supply data can support my claim.