Managing community in Hong Kong – the political economy perspective

Abstract

PurposeTo examine how an incomplete and biased legal/regulatory framework governing the allocation of property rights within a residential community in Hong Kong blocks the natural choice of a market contractual arrangement for the governance of the community as well as the management services.Design/methodology/approachThis paper applies an institutional economic framework to examine the rationale of adopting different governance structures for different types of assets. A detailed case study is examined based on this framework and the governance structure of this community is analysed and the rationale behind the chosen structure is examined accordingly.FindingsIt is found that a unified governance structure has been adopted in this community, not by the residents in the community, but by the developer who has a controlling share of property rights and vested interests on the undeveloped part of the community.Research limitations/implicationsThe case study, though detailed, limits to one community, which itself is very unique in the physical environment. In the future, different communities should be compared under different management models to examine the effect of developers' vested interests in the community and the governance structure, and how would a fair delineation mechanism of property rights will provide a more efficient management model for the community.Practical implicationsIt is suggested that an overall examination of the way property rights are delineated in Hong Kong is needed to protect the rights of individual property owners, so that a fairer and more efficient system can be in place.Originality/valueThis paper argues that the choice of governance structure in a residential community under some special socio‐political environments is also facilitated by the legal/regulatory framework delineating property rights.