Letters to Hong Kong
22-08-2008

I was sad to see my friend and former colleague, Secretary for the Civil Service, Denise Yue, embroiled in the latest in a series of embarrassing mis-steps on the part of the Administration.  Ms Yue is an able and dedicated civil servant, of the highest calibre and integrity. But, as she herself has now publicly acknowledged, the decision to permit the former Permanent Secretary for Housing and Lands, Mr. Leung Chin-man, to take up a senior and highly paid job with a subsidiary of New World Development was ill-advised.  Crucially, it failed to recognize the potential for a highly damaging public perception that Mr. Leung was being rewarded for favourable consideration of the bid by a consortium - of which New World was a member - to purchase the Hunghom Peninsula housing estate in 2004 at a price widely considered to be well below market value.

Mr. Leung has strenuously defended the integrity of his role in approving the Hunghom Peninsula transaction.  However, I do have to wonder at his judgment in apparently believing that, despite the controversy aroused at the time, he could now take up this appointment without generating a public outcry.  It is further totally disingenuous of him now to declare that he is shocked that the Government apparently did not take this issue into consideration when ruling on his application to take up employment with New World.  

Our Chief Executive, Mr. Donald Tsang, has ordered an urgent review of the entire procedure for processing applications by ex-senior civil servants to take up post-government private sector employment.  Without wishing to anticipate the outcome of this review I hope it will result in far more effective communication between the senior civil servants called upon to advise the Civil Service Bureau on such applications, as well as a mechanism for informed and truly independent  vetting by members of the Advisory Committee on Post-service Employment of Civil Servants.  What I don’t want to see is the pendulum swing so violently in the opposite direction that reasonable requests for post-service employment are turned down. The goal must be to strike an appropriate balance between the rights of individual applicants and the need to protect the public interest. 

One of the most unfortunate aspects of this affair is that, once again, the Government has found itself dangerously out of touch with the public mood which is now acutely sensitized to anything that smacks of a lack of transparency or collusion between government and the private sector.  What can be done to restore confidence in the government decision-making process?  It is certainly in no one’s interest that things continue as they are.

Years ago, while waiting in a hotel coffee shop for a friend to arrive, I couldn’t help overhearing a conversation at a nearby table between two American sounding expatriates who appeared to be comparing notes on their experiences of living and working in Hong Kong.   At one point one of the gentlemen said: ‘You know I find that this place is surprisingly well governed’.  

As you can imagine, this comment produced in me rather mixed feelings. On the one hand part of me bristled at this somewhat patronizing assessment; on the other hand I also felt a sense of pride at an albeit back-handed compliment to  the government I was part of.  Thinking about it later caused me to reflect more closely on the innate strengths of our government system. My conclusion was that, in the absence of genuine democratic accountability, successive Hong Kong administrations had striven hard to sustain a strong internal culture of excellence and intellectual rigour: a powerful sense of ‘esprit de corps’ and a commitment  to  maintaining the checks and balances which are so vital to achieving good governance. 

In practice, a great strength of Hong Kong’s policy-making process has been the adoption of what I would characterize as a ‘bottom up’ approach to the development and vetting of new policy proposals.  Let me elaborate on how this works in principle.

Under an effective bottom up approach, ideas are often generated initially at fairly junior levels of the administration – the desk officers who understand the subject area most closely and who are therefore in the best position to identify the need for new initiatives, carry out the necessary background research and then proceed to formulation of preliminary recommendations. As these preliminary proposals progress upwards, for consideration at more and more senior levels of the government department or policy bureau concerned, they go through a process of ripening and development.  At each stage the civil service officers scrutinizing the proposals are encouraged to raise questions, to critique different aspects and to bring up perceived flaws in the proposal.  At this stage of the process debate and differences of opinion are welcomed, because they help to ensure that all possible downsides or pitfalls have been identified and that the new policy can be implemented smoothly and effectively in due course.

To the outside observer this process may seem unduly bureaucratic and time-consuming, but experience has taught us that it has served Hong Kong well. Typically it culminates in final scrutiny of the new proposals by the Executive Council, which includes the most senior members of the Administration and leading representatives of the community whose role it is to advise the Chief Executive on whether or not to go ahead.

This is the final and crucial step in the internal vetting process which requires the Policy Secretary submitting the proposal to have carried out the utmost due diligence and  broad-based consultation of interested parties; in short to have considered every angle and looked around every corner for potential implementation problems.  Both as a former policy secretary who regularly had to  undergo the discipline of a grilling on my proposals in ExCo and, latterly, as Chief Secretary for Administration sitting on the other side of the table, I can testify to the very high level of intellectual rigour and mental preparation that used to be expected.

The problem that I now perceive is a sort of ‘dumbing down’ of the policy making process, a tendency to  try and take short-cuts which, I am firmly convinced, is in large measure responsible for the succession of gaffes and policy ‘U turns’ on the part of the government that have occurred in the past few years.  I don’t believe for a minute that the intellectual calibre of our senior civil servants has declined, nor their commitment to achievement of the highest standards, as there must be something else at play. 

My conclusion is that the fault lies  in an erosion of tried and tested processes and esprit de corps in favour of an overly ‘top down’ – I would even go as far as to say ‘seat of the pants’ approach to policy decision making.  I am not of course implying that it is wrong for the Chief Executive and his Ministers to initiate new policies and proposals – it is both right and necessary that they do so.  At the same time they must demonstrate the patience and humility to allow these initiatives to be subjected to the sort of due diligence and vetting process that I have just been describing.Short term political expediency seldom makes good public policy.

Put simply, it is the difference between a Minister saying to his civil service team:

 “This is the goal I want to achieve and it is your job to help me achieve it as quickly as possible, oh and by the way don’t bring me problems only solutions!”
 
as opposed to saying:

“This is the goal I want to achieve but first I would welcome your advice on the pros and cons and how best to go about it, oh and by the way be sure to let me know if you see any problems.”

The recent fiasco surrounding the announcement of a 2-year suspension in the levy on employers of domestic helpers is a text book example of the dangers of an unfettered top down approach to policy making.  Not only did it rapidly become clear that many practical consequences of this decision had simply not been anticipated, let alone thought through, the decision was announced publicly before it had received the necessary endorsement of the Executive Council.  The end result was total confusion amongst employers and helpers, disgruntlement on the part of both, and a significant operational challenge for the Immigration Department in coping with a rash of helpers whose contracts were abruptly terminated in order to circumvent levy payment.