Download Emerging Welfare Blueprints for Hong Kong: A Contribution

Neoliberalism and Incrementalism
Since the late 1970s, neo-liberalism, a school in social policy that shares common tenets
with orthodox development economics, has been in the ascendant. According to the
proponents of neo-liberalism, economic growth should be given high priority on the
assumption that high growth, resulting in increased prosperity through all sections of
society, will automatically solve the society's social problems. In the social policy arena,
the proponents of neo-liberalism accord a pre-eminent position to the forces of the market,
assign a subsidiary role to the state, and advocate placing a high degree of responsibility
on the individual. Welfare and well-being, in their view, are “private” concerns, to be
devolved to households and individuals. In other words, individuals are expected to
secure their own welfare by dealing in the market, largely independently of any subsidies
or supports from the state. The state has only a very minimal role to play as the provider
of a safety net for the least well off, and the state needs to be ever wary of the risk of
facilitating a “culture of dependency.”
Various of the ideas of neo-liberalism (small government, retrenchment of social
programs, cost containment, economic efficiency, to name a few) have won acceptance
from Asian states including Hong Kong. Fiscal difficulties, economic uncertainties and
disillusionment with conventional social programs fuel the spread of neo-liberal ideas. In
the aftermath of the Asian financial crisis (1997), for instance, many Asian states
believed that renewed economic growth alone would eliminate most if not all of the
social problems and needs that had resulted from the crisis.
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Given its unique cultural background, Hong Kong is not in a position to take the free
market route, minimizing its government to the point of irrelevancy. Moreover, the
neo-liberal position is untenable and is not appropriate to Hong Kong. First of all, there is
hardly any evidence to show that the benefits of economic development have been evenly
and justly distributed. On the contrary, social needs remain unmet and social problems
persist on a large scale. Human misery in Hong Kong is rampant. Latest research reports
in Hong Kong tell of suffering among specific groups of vulnerable people (women, poor
children and new immigrants). Above all, neo-liberal ideas have failed to address the
problems that arise from the distortions in economic development.
Over the past decade, social welfare development in Hong Kong has been marked by a
lack of program coherence and an absence of vision. The “last” social welfare policy
paper dates back to 1991 (i.e., the White Paper on Social Welfare formulated by the then
colonial government). The Hong Kong SAR government has not been able to come up
with a welfare blueprint.
There is at present another important force at work that impinges on welfare development:
budgetary incrementalism. In the absence of a clearly articulated welfare blueprint, social
welfare provision in Hong Kong has been drifting along in an ad hoc, step by step fashion.
In a recent study on the impact of democratization on social welfare spending in Hong
Kong (1975-2002) (See CUHK Social Welfare Practice and Research Center Working
paper Number one, “Does Democratization Spur Social Welfare Spending? The Case of
Hong Kong, China” 2004), it is noted as an incidental finding that the social welfare
system of Hong Kong has been developing along “incremental” lines. In this study, we
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find that the size of last year’s welfare budget, taken with such explanatory factors as
price and real GDP per capita, all have significant impacts on the size of this year’s
welfare budget. Based on this finding, we argue that the planning and monitoring
mechanisms of the social welfare system are mainly controlled by officials in the
Government Bureau and the respective departments rather than by the elected politicians
in the Legislative Council. These officials have a tendency to adopt an incremental
budgetary approach in social policy.
The weaknesses of an incremental approach in social policy are all too apparent,
particularly at a time when social contexts are changing rapidly and new challenges are
emerging every day. These weaknesses are especially obvious when budgetary
constraints are stringent and the gap between social needs and social service delivery is
wide.
New efforts are needed to find an alternative basis for welfare provision. In this respect,
four normative positions are reviewed in this report: neo-institutional social protection,
rights-based welfare, reciprocal welfare and developmental welfare. We hope these
emerging welfare blueprints will serve to inform and stimulate discussion among
practitioners and academics.
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(1) Neo-Institutional Social Protection (Attachment I)
An approach that is committed to social protection and institutional social welfare would
cherish values such as equity, social justice, need-based welfare, humanitarianism and
social equality. There are many contemporary proponents of this approach, including
large international organizations like the International Labour Organization and the
OECD. A traditional social protection approach aims at social policies that emphasize
security of employment and adequate social protection for needy and vulnerable groups
in society. It also emphasizes the need for government intervention in social policy and
the importance of comprehensive social programs that provide an adequate safety net and
actively promote the welfare of all citizens. This approach allocates greater resources to
social programs. In the aftermath of the Asian financial crisis, the ILO urged more
dialogue between the social partners in Asian societies to address the challenges they
were facing.
Some of these principles are affirmed in the context of Hong Kong by Dr Wong Hung’s
social protection analysis, which draws heavily on the main tenets of the social
administration school in Britain. The idea of “social engineering” and “welfare as social
reform” is central to Dr Hung's proposal. In his view, government needs to play a strong
role in social welfare provision, and in playing this role government cannot be supplanted
by the market. The Hong Kong government should be working toward the introduction of
a proper social welfare planning mechanism as well as a contributory social insurance
program, and a commitment to a program of universal protection.
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Dr Hung's analysis nonetheless acknowledges the peculiar context of social welfare
provision in Hong Kong, given, for example, the budgetary constraint within which it
must operate, and the nature of the territory's economy. His analysis recognizes a dualism
in Hong Kong's economy, and the social needs/problems that accompany this dualism. He
advocates an asset-based, community governance welfare model and the strengthening of
civil society, with a renewed focus on community economic development. While not
optimistic that the business sector is prepared to provide the much needed funding for
welfare, he nevertheless sees a role for the business sector in social welfare development,
in terms of its capacity to offer voluntary services in the form, for instance, of
professional consultation, and, of course, its importance as a provider of jobs and as a
repository of management knowledge.
(2) Rights-based Welfare (Attachment II)
In this perspective on welfare, the paramount driver is the concept of social rights. Our
colleague, Dr. Fung, sees the social welfare system as serving the following functions:
the provision of a social security system to fulfill the function of basic income protection
(the social protection/insurance function); the provision of caring and protection services
to provide against personal deficiency, social adversity and uncertainty (the function of
social nurturance); and the strengthening of enabling and empowering mechanisms for
social development and personal actualization (the functions of personal and social
development). The underlying message in Dr. Fung’s proposal is that there exists a range
of social needs that are so basic that everyone should have them fulfilled, as a matter of
right. The important role of the government is to ensure that the basic human rights of
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citizens are respected and protected as the community and business sectors carry out their
welfare functions.
Social rights are powerful normative imperatives in the advanced industrialized countries.
Dr. Fung’s ideas are reminiscent of the social rights approach that was first expounded by
T. H. Marshall (See Sociology at the Crossroads and Other Essays, 1963). Marshall was
a supporter of an egalitarian notion of social provision, but he was concerned with the
potential conflict between a regime of social rights and a social order governed by the
rules of a capitalist market. His citizenship theory can be seen as a way to advance and
legitimize welfare provision within a liberal democratic context. It attempts to overcome
the inequalities of free market capitalism through an emphasis on community-oriented
political and social rights that stresses citizen participation in shared communities.
There is no doubt that the idea of citizenship rights (in particular, social rights) has taken
hold in Hong Kong, but the notion of social rights is still not widely accepted in the
territory. It is still imperfectly developed, and only becomes a subject of national debate
occasionally, through social work academics or activists pushing for social changes. The
the important question is therefore whether (and how) the idea of citizenship rights can
draw the same level of support here as it does in other advanced industrialized countries.
Reciprocal Welfare (Attachment III)
In the search for a pragmatic, sustainable welfare model that fits well into the SAR
context, our colleague, Dr. C. K. Wong proposes the idea of “reciprocal welfare” as the
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cornerstone for a welfare blueprint. Social welfare in the SAR Hong Kong is facing a
challenge: its residual-oriented social welfare system seems unable to simultaneously
cope with the rising demands of the middle class and meet the growing needs arising
from demographic change, poverty, and the widening rich-poor gap in this dual economy.
On the other hand, it is also impugned for encouraging welfarism.
Bearing in mind such public concerns (welfarism, and the accompanying erosion in the
values of family and self-reliance, a tight fiscal budget and a competitive global
economy), Dr Wong argues that a new approach to social welfare is urgently required.
The theoretical base for “reciprocal welfare” is active citizenship and welfare
contractualism. The principal tenet of active citizenship is “an emphasis on the
responsibility-side of citizenship, and the need to provide adequate resources for the
vulnerable to exercise their ethical duties to the community.” He argues that active
citizenship could rectify the earlier problem of ‘duty-deficit’ in social welfare, whilst
retaining the traditional pledge to assist the vulnerable, which is essential in a dual
economy. While welfare contractualism embraces the tenet of fair reciprocity, fair
reciprocity is founded on the thesis that the good society is, fundamentally, a community
of mutual concern and respect, fair economic practices and social reciprocity. On the
benefits side, it relies upon conditional benefits as the expression of the fair-due
conception in reciprocity; benefits are less general in some cases as an institutional
mechanism to avoid moral hazard. A number of policy tools emanate from this approach:
a flexible differential fee-and-charge structure and social insurance for pooling social
risks.
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Some specifics of this reciprocal welfare approach are summarized here:
1. The need for change - the SAR social welfare system in crisis
1.1 Greater demands for social welfare in an unfriendly ideological and fiscal environment.
1.2 A residual-oriented social welfare system, a colonial legacy, which is supposed to cater for
the needs of the poor and vulnerable groups, but is increasingly incompatible with the demands
of a 21st century Asian international city.
2. What is reciprocal welfare?
2.1 The underlying principle of reciprocity welfare is the fair-due conception of right and
responsibility.
2.2 People who have the ability have an obligation to make a decent productive contribution,
proportionate to their abilities, to the community. People who do not have the means or the
ability have the right to the protection of a modicum of benefits and services for exercising their
moral obligation to the community.
3. What are the major policy arrangements for reciprocal welfare?
3.1 Social services should have a flexible differential fee-and-charge structure, which allows the
fair-dues of stakeholders with different abilities.
3.2 It uses social insurance to pool social risks in such areas as health care, income and
unemployment protection.
3.3 It aims at universal coverage, and differential contribution rates, but standard benefits.
3.4 The middle classes are included, the poor and vulnerable are not marginalized; social
integration can thus be achieved.
3.5 Conditional benefits and social services as an expression of the reciprocity. Enforces
differential treatments in accordance with citizenship, residence, contributions and behavior, e.g.,
work-test and participation-test.
3.6 Benefits levels for the poor and vulnerable are decent but less than generous, e.g., tied to
basic needs rather than a wage. This arrangement allows system flexibility, especially related to
the competitive economy, facilitates personal incentive, promotes non-statutory participation and
avoids moral hazard.
4. Reciprocal welfare is sustainable and compatible with the SAR context
4.1 The major parties in the SAR, the government, business and the general public, are in favor
of a self-reliance ethos and a restrictive social policy.
4.2 The Asian Financial Crisis and the 2001 economic downturn have exposed the narrow fiscal
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base of the prevalent structure for financing social welfare, a legacy of the colonial era.
4.3 The existing financial structure of social services is too narrow - there is insufficient use of
social insurance for pooling social risks and a rigid fee-and-charge structure. People with the
ability are not allowed, under the present system, to contribute in proportion to their ability.
(4) Developmental Welfare (Attachment IV)
In response to the neo-liberal critique of state welfare, progressive policy analysts have
been searching for an appropriate and effective approach to social provision. Academics
such as James Midgley amd Michael Sherraden have called for the adoption of a
developmental approach that will promote social development and be consonant with the
need for continued economic development. Proponents of this approach believe that it
provides an appropriate normative basis for social welfare in all parts of the world. The
approach originated in the developing nations in the middle decades of the 20th century
when many newly independent states sought to adopt economic policies that would
promote rapid industrialization, employment and improvements in living standards but, at
the same time, to address pressing social problems. Recently, the United Nations made a
determined effort to reinvigorate its key ideals by convening the World Social Summit in
Copenhagen in 1995.
Social development emphasizes the social aspects of the development agenda by
harmonizing social interventions and economic development efforts within a wider
commitment to social change and progress. It calls on governments to emphasize social
programmes that are compatible with development.
There are several underlying principles: first, social development cannot take place
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without economic development and economic development is meaningless if it fails to
bring about significant improvements in the well-being of the population as a whole.
Second, economic development should be integrated and sustainable, bringing benefits to
all citizens; and third, social welfare should be investment-oriented, seeking to enhance
human capacities to participate in the economy. The productivist welfare approach in
social development emphasizes the adoption of social policies that strive to enhance
human functioning and capabilities.
There are a number of empirical realities that give support to this approach. Proponents
of this approach point out that there have been enormous improvements in standards of
living for many people around the world over the last fifty years due to an emphasis on
social development. Importantly, social development is able to offer an opportunity to
challenge the neo-liberal claim that social expenditures harm the economy and that
economic development requires social retrenchments. In a normative sense, social
development promotes a pluralistic and consensual approach to social welfare that
transcends the historic welfare statism of the European nations, advocating the integration
of state, market and community. It proposes that governments direct the process of social
development in ways that maximize the participation of communities, the markets, and
individuals in both economic and social development.
The developmental experience of Asian states is illustrative of the importance of social
investment, which serves as an important support to the economy. Singapore, Taiwan and
South Korea are all authoritarian developmental states and are pro-growth in orientation.
Yet, these developmental states tend to have extensive social services in such areas as
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housing, education, and health. These social services are considered a social investment.
In other words, social welfare was developed to further their national economic
development goals.
An article written by Midgley and Tang (2001) gives some of the flavors of this
approach.
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