Public Attitudes towards Income Redistribution: Evidence ... M. … · social policy conducive to addressing poverty and income inequality. Other societies, especially those encountering

SOCIAL POLICY & ADMINISTRATION ISSN 0144-5596DOI: 10.1111/spol.12192VOL. ••, NO. ••, •• 2015, PP. ••–••

Public Attitudes towards Income Redistribution: Evidencefrom Hong Kong

Alfred M. Wu and Kee-Lee Chou

Department of Asian and Policy Studies, The Hong Kong Institute of Education,Hong Kong

Abstract

The drivers of public support for redistributive policy have stimulated academic debate around theworld. The majority of studies use cross-country surveys conducted in the Organisation for Eco-nomic Co-operation and Development countries to contribute to the debate on whether self-interestor social values have more influence on public attitudes towards redistribution. Drawing on a phonesurvey conducted in 2013 , this study advances the discussion by investigating public attitudestowards redistribution and social policy changes against the backdrop of buoyant governmentrevenues in Hong Kong. The Hong Kong welfare model, best seen as a parallel to the liberal welfarestate, is selective and residual. Contrary to the usual assumption, the social values hypothesis,viewing poverty as societal problems instead of individual reasons, has been supported in the HongKong context. It lends support to greater redistribution in a residual welfare state. The policyimplications of the findings are also discussed.

Keywords

Redistribution; Public attitude; Poverty; Income inequality; Hong Kong

Introduction

In ageing societies, using public money to effect income redistribution is a coreaspect of the political agenda. Widening income inequalities in many societiesheightens the need for redistribution. Nevertheless, public support is vital tothe formation and implementation of a good redistributive programme. Insome countries, such as the UK, public support for some welfare redistributionhas declined over time (Dorey 2010). In the meantime, some may support acertain type of redistribution, such as education and health spending, but notothers (Humpage 2015; McCall and Kenworthy 2009). Public attitudes com-plicate any attempt to increase or reduce public expenditure on redistribution.

This study aims to investigate public attitudes towards redistribution inHong Kong, a former British colony with a residual welfare system, whichimplies a minimal role of the state in providing social welfare and welfare ben-efits usually are modest. Nevertheless, the fiscal position in Hong Kong,

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SOCIAL POLICY & ADMINISTRATION, VOL. ••, NO. ••, •• 2015

enjoying phenomenal economic growth in recent years, has been optimistic.In recent years, against a backdrop of many advanced economies grapplingwith fiscal austerity, Hong Kong has accumulated huge budget surpluses.For example, in the financial year 2008–09 , the general revenue accountand funds in the government budget showed a surplus of HK$1 .450 billion,which increased further to HK$25 .917 billion the following year. Neverthe-less, even these amounts were not huge compared with the surpluses of thelatest two years, namely HK$75 .121 billion and HK$73 .686 billion in thefinancial years 2010–11 and 2011–12 , respectively (see figure1 ). As shownin figure 2 , based on current projections, Hong Kong’s predicted fiscal perfor-mance will be extraordinary, with government surplus as a share of grossdomestic product (GDP) reaching almost 5 per cent in 2017 . Therefore, ifwe regard government surplus as a good indicator of public finance healthamong developed economies, Hong Kong would be a star performer. Indeed,figure 2 suggests that among six selected developed economies, only Norwayperforms better, and its surplus is steadily reducing.

In stark contrast to the above economic indicators, Hong Kong is alsocharacterized by increasing poverty and a stunning growth of income inequal-ity. The United Nations Development Programme (2010) reports that among32 ‘very high human development countries’, Hong Kong was ranked firstin terms of income inequality (see also Saunders et al. 2014 ). A poll, drawingon a sample of 6,100 Hong Kong residents aged12–64, suggests that wealthis seriously unequally distributed, with the poorest 20 per cent only accessing6 per cent of the wealth, and the richest 20 per cent controlling 43 per cent(South China Morning Post, 10 April 2013).

With other developed economies demonstrating a similar demographictrend, there has been widespread debate over whether or not more publicmoney should be spent on redistributive programmes such as education, healthcare, social assistance and pensions. Such controversy arises against a back-ground of welfare state retrenchment and fiscal austerity in many developedeconomies. However, debates over redistribution in Hong Kong have emergedin the context of a burgeoning budget surplus, meaning that the disagreement is

Figure 1

Government revenue, expenditure, surplus, or deficit: general account and funds (HK$ million),1996–2012

© 2015 John Wiley & Sons Ltd2

Figure 2

Government surplus or deficit as a share of GDP (%), 2011–18


not mainly about whether or not theHongKong Special Administrative Region(HKSAR) government can afford to redistribute public money, but about find-ing a social consensus about how this should be done. This issue, which has so farbeen given little attention in the academic literature, is more difficult to answer.

Drawing on a survey conducted in 2013, we attempt to close this researchgap by investigating public attitudes towards redistribution in the Hong Kongcontext. To what extent do the people of Hong Kong support redistributionand government intervention? What factors have determined public supportor opposition?

Compared with other research in public attitudes towards redistribution,this work makes several contributions. First, the context is unique and signif-icant, which may contribute to a better understanding of public opinion onthe welfare system. Like other advanced economies, Hong Kong is witnessinga rapidly ageing population plus a substantially widening income gap. Moreimportantly, in recent years government coffers have been buoyant and even,to some extent, overflowing. The bulk of the extant research on publicattitudes towards redistribution has been carried out in the context of fiscalausterity or even fiscal insolvency in the developed economies. The uniquecase of Hong Kong, where the government is in far better fiscal health, mayshed new light on the existing research. Put simply, it may enable us to forma better understanding of public attitudes towards state intervention duringfiscally good years where there remain some difficult demographic and otherfactors (that is, rapid ageing and enduring poverty).1 Second, this article scru-tinizes the micro-foundation of public preferences on redistribution. Mostprevious work examines the institutional factors affecting public attitudes.Some of the literature uses Esping-Andersen’s (1990) categorization frame-work to compare welfare preferences across countries (see Busemeyer et al.2009 ; Jakobsen 2011). Echoing this approach, we also explore the micro-foundation in a single case study, which may reap great benefits. Using

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micro-based survey data can reveal economic, political, societal intricaciesunderpinning a society that are vital to the formation and implementationof government policy. Third, drawing on a transitional society against a tur-bulent political and economic environment, the Hong Kong case, in a singlecontext compared with cross-country studies in most of the similar studies, caninspire the research in many different contexts. As a laissez-faire economy andthe role of state in the economy being constrained, Hong Kong has worn aninstitutional straitjacket confining the government’s role in redistribution.Intriguingly, the interaction between the government and popular demandhas intensified in recent years but not led to a better environment for makingsocial policy conducive to addressing poverty and income inequality. Othersocieties, especially those encountering similar challenges, may gain someexperience from Hong Kong.

The remainder of the article is organized as follows. The next sectiondiscusses the theoretical debate on public attitudes towards redistributionbefore the methodology, and the findings of this study are presented. Weidentify some intriguing findings with regard to public perceptions of redis-tributive policy, and the section which follows discusses these in detail withregard to the policy implications. The article ends by proposing some policyimplications for the HKSAR government and beyond.

Theorizing Public Attitudes towards Redistribution

Some theoretical arguments are raised in the literature, of which the two mainstrands are self-interest and social values (Svallfors 2012). The former empha-sizes the impact of actual or perceived vulnerability on public support forredistribution (Ainsaar 2012 ). Citizens’ positions in society determine theirattitudes and motivations towards redistributive programmes. Nevertheless,the other line of thought argues that attitudes towards redistribution are notformed by one’s own situation but instead by values or ideologies held aboutredistribution (Ainsaar 2012).2 For example, it is assumed that peoplesupporting social equality (left-leaning people) are inclined to accept redistrib-utive programmes (van Oorschot 2010: 21). The policy implications of thesetwo lines of thought are distinct.

The self-interest hypothesis

The logic underpinning the self-interest argument is straightforward, as theassumption is that individuals are utility-maximizing agents. People who arelikely to benefit from redistribution tend to support government interventionand welfare enhancement, while those who should contribute to redistributionor will benefit less from the programme are inclined to oppose it (Linos andWest 2003). Both the actual and potential recipients of redistributiveprogrammes should be supportive of redistribution. For example, evidencesuggests that unemployed citizens are more likely to have positive attitudestowards redistribution (Gelissen 2000). Although unemployment benefitsoffered by governments vary across countries, unemployment is widely con-sidered to be associated with the perceived vulnerability of a worsening



standard of living. In the light of these circumstances, the unemployed wouldbe expected to support redistributive programmes.

Likewise, people on low incomes also are inclined to support redistributiveprogrammes. As their incomes are lower than the average, such individualstend to find that they cannot improve their situation without help from theirrelatives, friends or the government. Thus, evidence suggests that those on lowincomes are strongly supportive of redistribution (see Bean and Papadakis1998). A related issue is that being of a perceived lower social class will makeindividuals more supportive of redistribution. Although social class may notbe identical to one’s actual financial or other situation, the perception in itselfsuggests a level of perceived vulnerability for individuals or families. People inlower social classes are generally more vulnerable to risks such as unemploy-ment or poor health. In addition, they may have weaker social networks orbe isolated socially. The literature has therefore shown that social class isexpected to affect public perception of redistribution (Svallfors 2004).

A caveat is needed. Both objective self-interest and subjective self-interestplay a role in shaping public demand for redistribution. Perceptions of beingin a lower social class, not equal to one’s actual financial situation, may, tosome extent, exert a more explicit impact on public attitudes towardsredistribution. More importantly, social values or ideologies may interact withthe two different approaches of self-interest in reality.3 For example, perceiv-ing social development or social injustice as a driver of poverty may coincidewith subjective self-interest such as a person’s self-evaluation of unemploy-ment risk. Both of them will jointly have an influence on demand for redistri-bution. Through our study, we find that subjective self-interest and ideologieshave a great say in affecting an individual’s perception of welfare distribution.

In addition to these factors, other demographic or individual factors may affectpublic attitudes towards redistribution. Age probably matters. Research hasfocused more on the link between one’s own financial situation and popular atti-tudes towards redistribution. As Busemeyer, Goerres and Weschle (2009:196)suggest, ‘one’s position in the life cycle’ will also have a bearing on public prefer-ences for redistribution. The rationale behind this is simple. Although not all ofthe elderly are poor, the majority need more health care and other types of socialassistance. Therefore, they have an incentive to support redistributiveprogrammes such as health care provision. Similarly, the number of childrenin a family may affect perceptions of redistribution as children require substantialspending on education and health care. In general, having more children isexpected to increase the financial vulnerability of a family, at least in the shortterm. Therefore, the number of children in a family may also contribute to agreater support for redistribution. Ainsaar (2012) finds that families with childrentend to support child-related public programmes. In addition to age, researchalso shows that gender has an impact on attitudes, with some arguing that womentend to favour redistribution more than men (Habibov 2013).

The social values hypothesis

Social values may also have an impact on public attitudes towards redistribu-tion. Svallfors aptly points out that ‘self-interest is in no way close to the full



story behind the patterning of welfare attitudes’ (Svallfors 2012: 226). Thelogic underlying the self-interest argument is that individuals will pursue utilitymaximization based on their actual or perceived vulnerability. Nevertheless,some argue that even individuals who are financially strong may be sympa-thetic towards heightened welfare redistribution. In reality, some people, eventhe rich, may support redistributive programmes. This suggests that morestable factors, such as social values or ideologies, may affect the demand forredistribution. Empirical evidence indicates that social values instead of self-interest can explain redistributive preferences (Fong 2001 ). Social valuesare reflected in concrete attitudes towards income inequality or poverty.

A theory on income inequality and support for redistribution has beendeveloped by Meltzer and Richard (1981). As income distribution is skewedto the right in developed economies, the income of the median voter is gener-ally lower than the mean income in society. On the one hand, median voters,having a critical influence on government decisions through elections andother channels, will seek to increase redistribution to improve their owncircumstances. On the other hand, higher income inequality in society leadsto stronger public support for redistribution as progressive taxes are normallyimposed on higher income individuals or families instead of median voters.Nevertheless, modest income inequality will be associated with weak supportfor redistribution, as median voters may need to pay extra taxes as well(Dallinger 2010; Meltzer and Richard 1981 ). The empirical findings aremixed, however (Dallinger 2010).

Perceived causes of poverty have also been argued to have an impact onpublic attitudes towards redistribution. When poverty is seen as the result oflaziness or character failing, people tend not to support redistributive mea-sures. This is evident in many contexts. For example, in the UK, many peopleattribute poverty to individual factors such as poor parenting rather than thesurrounding environment (Sefton 2009). Unsympathetic attitudes towardspoor people complicate government anti-poverty initiatives. Support for agovernment anti-poverty programme declined substantially from 1994 to2006 in the UK (Dorey 2010). This situation may be seen in other liberalwelfare regimes. In contrast, some take the view that the root cause of povertyis social injustice, meaning that structural barriers rather than personalfailings lead to individuals being poor. In this view, poverty is not about poorparenting or financial mismanagement, but a result of social dysfunction, andso the government has a responsibility to tackle it through redistribution.Support for redistribution, Jaeger (2009) notes, tends to be higher in theconservative regime or the social democratic regime.

The institutional theories suggest that the structure of the welfare state,institutional arrangements for welfare provision, and existing ideologies willall affect public support for redistribution. For example, in a social democraticwelfare regime, which provides generous welfare benefits to the public,demand for redistribution will be higher if income inequality and povertyworsen. In a liberal regime where welfare provision is more targeted andremains minimal, such demand tends to be lower ( Jaeger 2013 ).

In addition to these explanations, the governmental protection hypothesispromulgated in the political sociology literature points out that individuals



view welfare state provision as a form of social insurance which protects themfrom economic shocks and other crises. Popular demand for redistributionwill therefore increase in bad times, such as recessions. However, individualswill be reluctant to support redistribution in good times when economic indi-cators are generally good ( Jaeger 2013). The case study in Hong Kong mayshed fresh light on the assumption and suggest a different story.

In summary, according to the self-interest hypothesis, the actual andpotential recipients of redistributive programmes will support such policies.Specifically, those who are unemployed and older, who perceive themselvesvulnerable to becoming poor, who are of lower social class, and who havemore children are more likely to be supportive of redistributive programmes.Based on the social values hypothesis, the perceived causes of income inequal-ity, magnitude of income inequality, and causes of poverty are all associatedwith public attitudes to redistribution. In particular, individuals who perceiveincome inequality as a consequence of providing benefits to the rich, who areliving in a less equal society, and who attribute poverty to social injustice, aremore inclined to call for redistribution.

Methodology

Data collection

The data used in this study came from a telephone survey conducted inMarch 2013, the targets of which were adults aged 18 and over who wereHong Kong residents and Cantonese speakers. The sampling procedureconsisted of two steps. First, we randomly selected a fixed set of telephonenumbers from the latest residential telephone directories and used them asseed numbers. Using those seed numbers, we generated another set ofnumbers by randomly adding or subtracting1 or 2 to/from each of the num-bers (the plus/minus 1/2 method) so as to obtain new and unlisted numbers.Second, our trained telephone interviewers asked the potential respondent ineach household to participate in this study if he or she fulfilled the inclusioncriteria. If there was more than one potential respondent in a household, werandomly selected one for interview by using the ‘next birthday’ rule, in whichwe selected the person whose next birthday was the soonest. All interviewerswere monitored by qualified supervisers and their performance was alsoevaluated using real-time camera surveillance. All interviews were conductedanonymously. The sample size was 1,032, giving a response rate of 68 .0 percent. Due to missing values in the variables used in this study, the final samplefor analysis contained data from 873 respondents.

Measures

The survey included a question on public support for redistribution, whichwas the dependent variable in this study, ‘Should the government reduceincome difference between the rich and the poor, perhaps by raising thetaxes of wealthy families or by giving income assistance to the poor, orshould the government not concern itself with reducing differences?’.



Responses were collected using a 7-point Likert-type scale ranging from ‘1= the government should not reduce inequality’ to ‘7 = the governmentshould concern itself with reducing inequality’, with 4 indicating a half-and-half response. This item was adopted from a recent study of publicopinion on income inequality and redistribution policy preferences (McCalland Kenworthy 2009 ).

The analysis consisted of producing descriptive statistics, bivariate correla-tions, and multivariate regression analyses covering the three groups of vari-ables. First, the variables related to the self-interest hypothesis includedperceived vulnerability to a worsening financial situation, employment status,being of a lower social class, age, and number of children. Perceptions ofvulnerability to a reduction in standard of living were assessed by askingrespondents, ‘Do you think that in the next 12 months, you and your familywill be better off than today or worse off?’, with responses measured using a3-point scale where ‘better = 0’, ‘no difference = 1’, and ‘worse = 2 ’. Tomeasure objective financial situation, we used one variable, namely whetheror not the respondent was unemployed (and not studying, employed, retired,or a homemaker). Self-rated social class was also included as a subjective indi-cator of the financial situation of the household. Respondents were asked toindicate which social class their family belonged to, with the options includingupper-class, upper-middle-class, middle-class, lower-middle-class, and lowerclass. One binary variable was recoded as an indicator of lower class com-pared with all other response categories. Age was coded in 12 groups(18–20 = 1; 21–24 = 2; 25–29 = 3; 30–34 = 4; 35–39 = 5 ; 40–44= 6; 45–49 = 7; 50–54 = 8 ; 55–59 = 9 ; 60–64 = 10; 65–69 = 11 ;70+ = 12 ), while number of children was grouped into four categories (0= 0 ; 1 = 1; 2 = 2; 3 = 3 or more).

Second, the set of variables related to the social values hypothesis includedthe perceived causes of income inequality, magnitude of income inequality,and causes of poverty. The first was measured using the item, ‘Inequalitycontinues to exist because it benefits the rich and the powerful’, and the sec-ond using the item, ‘Differences in income in Hong Kong are too large’.Respondents rated both items using a 5-point Likert-type scale ranging from‘1 = strongly disagree’ to ‘5 = strongly agree’. Perceptions of the causes ofpoverty were assessed using one item in which respondents were asked,‘Why are there poor people in Hong Kong? Here are four possible reasons;bad luck, laziness or lack of willpower, injustice in society, and modern socialdevelopment. Which reason do you consider to be the most important? Andwhich do you consider to be the second most important?’. The order in whichthe four reasons were presented was randomized for each respondent. In ouranalyses, we recoded responses to this item into three dummy variablesdepending on which reason was selected as most important, namely; (1 ) badluck; (2) laziness or lack of willpower; and (3) injustice in society.

Finally, the last set of variables covered basic demographic characteristics,namely gender (male = 0; female = 1); education level (1 = elementary andbelow; 2 = junior high; 3 = senior high; 4 = certificate or associate degree; 5= bachelor degree; 6 = postgraduate degree); and marital status (married =1; other = 0).



Results

Bivariate analysis

The results showed that 57.8 per cent of respondents agreed that the HKSARgovernment should reduce income differences between the rich and the poor,while only 13 .6 per cent opposed this. Approximately 11.0 per cent believedthat they and their family would be worse off a year after today. While 29 .7per cent of respondents ranked laziness as the top cause of poverty, 28.5 percent and 33.6 per cent of respondents rated social injustice in the societyand modern social development, respectively, as the most important reason.Table 1 shows the descriptive statistics for the variables used in this study. Ascan be seen in table 2, significant correlations were found between attitudesto redistribution and perceived vulnerability, attitudes to income inequality,perceived causes of income inequality, perceived injustice as the cause of pov-erty, unemployment, perceptions of being in a lower class, and being married.

Multiple and logistic regression analyses

To formulate the simplest model of attitudes to redistribution, the first multi-ple regression only included variables that were significantly correlated withthe dependent variable. Table 3 shows the multiple and logistic regressionmodels with unstandardized coefficients. These show that perceived vulnera-bility, attitudes to the causes of income inequality, perceptions of injustice asthe cause of poverty, and perceived social class were all positively associatedwith redistribution policy preference. Specifically, individuals who expectedtheir lives to become worse, who believed that income inequality continuesto exist because it benefits the rich and the powerful, who ranked social injus-tice as the most important cause of poverty, and who perceived themselves asbeing in a lower social class tended to agree that the HKSAR governmentshould reduce the income gap between rich and poor.

Because the dependent variable, attitude to redistribution, was so highlyskewed, it is questionable whether the assumption of normality in a multipleregression can be supported. Therefore, we dichotomized the variable by con-trasting individuals who agreed that the government should reduce incomeinequality (7 ) with all other respondents. The result of the logistic regressionof this binary variable is shown in table 3. It can be seen that perceivedvulnerability, ranking injustice as the most important cause of poverty, andperceiving oneself as being in a lower social class were all significantly associ-ated with support for redistribution.

Discussion

Our findings support the proposition that both self-interest and social valuesinfluence public support for redistribution. Perceived vulnerability and per-ceived lower social class positively affected attitudes towards redistributionin our survey. When respondents were asked about their projected financialsituation over the next 12 months, those who thought things would get worse


Table 1

Descriptive statistics for the variables used in this study (n = 873 )

Dependent variables Percentage/mean (SD)

Attitudes to redistribution 4.98 (1.62)1 = Government should not be concerned 4.1%2 2.9%3 6.6%4 = Half-and-half 28.5%5 18.6%6 13.7%7 = Government should reduce inequality 25.5%Independent variablesSelf-interest variablesPerceived vulnerability 0.86 (0.59)Getting better 25.5%Same 63.2%Getting worse 11.2%

Unemployed 2.9%Perceptions of being in a lower social class 38.3%Age (12 groups: 1–12) 7.32 (3 .27)Number of children 1.31 (1.08)0 32.3%1 19.5%2 32.9%3+ 15.3%

Social values variablesPerceived causes of income inequality 3.69 (1.30)Perceived magnitude of income inequality 4.15 (1.05)Perceived causes of povertyLaziness 29.7%Bad luck 4.7%Injustice 28.5%Social development 33.6%

Demographic variablesFemale 58.4%Education (6 groups: 1–6) 3.18 (1.51)Married 66.8%


tended to support redistributive programmes. Also relevant is the fact thatrespondents who said their family belonged to a lower social class were moreinclined to support public programmes aimed at addressing income inequal-ity. This testifies to our assumption that subjective self-interest plays a substan-tial role in shaping public attitudes towards redistribution.

A somewhat more intriguing finding is that when asked about the causes ofpoverty, individuals who saw social injustice as the most salient factor alsotended to support redistribution. The correlation coefficient of this factor withthe dependent variable was 0 .81 in the multiple regression models. Seeing


Table 2

Bivariate correlations of agreement with the redistribution policy statement, ‘Should thegovernment reduce income difference between the rich and the poor?’

Support for redistributioncorrelation coefficient

Self-interest variablesPerceived vulnerability 0.12**Unemployed 0.09**Perceptions of being in a lower social class 0.09*Age (12 groups: 1–12) -0.03Number of children -0.01

Social values variablesPerceived causes of income inequality 0.14**Perceived magnitude of income inequality 0.14**Perceived causes of povertyBad luck -0.05Injustice 0.25**Social development -0.06

Demographic variablesFemale -0.04Education (six groups: 1–6 ) -0.01Married -0.08*

Notes: * p < 0.05. ** p < 0.01.


poverty as a social phenomenon beyond individual control suggests that peo-ple are more sympathetic to the disadvantaged, regardless of their own finan-cial situation. The finding may nonetheless suggest a subtle change occurringin Hong Kong, which was viewed as a welfare regime close to the liberal type.Usually, in the liberal welfare regime, many people attribute poverty to indi-vidual causes. However, public attitudes, albeit divided, towards poverty andredistribution in Hong Kong differ substantially from the one in the liberalsystem. In addition, the literature on welfare legitimacy indicates that theHong Kong people are exceptionally motivated by sympathy and moralobligation compared with other developed countries (Wong et al. 2006).

Unemployment status and number of children in the family had nodiscernible effect on support for redistribution. As welfare benefits are limitedand should be directed to those in greatest need of state intervention, unem-ployment or the burden of caring for children may not be a reason for seekingredistribution in the Hong Kong context. In addition, the findings of thisstudy do not support the governmental protection hypothesis wherein populardemand for redistribution changes according to economic circumstances.

However, a caveat to these findings is also in order. Changing publicattitudes towards the welfare state have posed a threat to developing a goodredistributive policy in Hong Kong. People are now more divided than everon social policy and a looming trend is that Hong Kong people demand for


Table 3

Multiple and logistic models of public attitude to redistribution

Multipleregression

Logisticregression

Dependent variable: Agreement that thegovernment should reduce incomedifferences between rich and poor

Unstandardizedcoefficients

Unstandardizedcoefficients

Self-interest variablesPerceived vulnerability 0.19* 0 .39*Unemployed 0.40 0 .53Perceptions of being in a lower socialclass

0.25* 0 .49**

Social values variablesPerceived causes of income inequality 0.09* 0 .06Perceived magnitude of incomeinequality

0.10 0 .07

Perceived causes of povertyBad luck 0.01 0 .44Injustice 0.81** 0 .68**Social development 0.18 0 .03

Demographic variablesMarried -0.14 0 .27

Adjusted R2 0.083 0 .06

Notes: * p < 0.05. ** p < 0.01.


a greater state intervention when income inequality and poverty havereached unprecedented levels. As noted by Chow (2003 ), prior to thereturn of sovereignty in 1997 , it appeared that social policy in Hong Kongmoved towards universalism. Nevertheless, the runaway economy, risingunemployment, and worsening fiscal position in Hong Kong soon after1997 made the HKSAR government cautious, even sceptical, aboutexpanding the scope of social policy. The government rejected any possibil-ity of turning Hong Kong into a Western liberal welfare state and promoteda flexible welfare strategy by handing out many one-off benefits to theneedy (Chan 2012 ). It seems that middle-class people and those with highlevels of education or high incomes, who may be seen as the most politicallyimportant section of the population, dislike the thought of a universal wel-fare system (Wong et al. 2006 ).4

Nevertheless, the situation is more complex than it first appears. Despite aseemingly conservative stance on redistributive policy, increased attention hasrecently been paid to the structural causes of poverty and inequality in HongKong, especially over the past five years. For example, nowadays many peopleattribute poverty to property hegemony, which has aroused huge debateamong Hong Kong people (Tang et al. 2012). It has been argued that prop-erty hegemony has some bearing on poverty in Hong Kong, especially for



those living in poor conditions with low incomes. At first glance, propertyhegemony is not directly related to poverty. Nevertheless, as Chan et al.(2014 ) point out, Hong Kong people are concerned about wealth disparitiesand take the view that property has a decisive effect on an individual’s eco-nomic future. For example, property developers and landowners can obtainmore material resources, while the have-nots tend to be marginalized andimpoverished due to skyrocketing house prices. The Hong Kong society istherefore dominated by the view that property hegemony is one of the crucialcauses of poverty.5 Some people believe in this type of structural explanationof poverty rather than attributing it to laziness or lack of willpower.

Our findings suggest that those who perceive poverty as resulting fromsocial injustice tend to support redistribution. Therefore, regardless of individ-uals’ financial background, more stable and enduring social values or ideolo-gies affect their preferences about government policy in this area. As societymoves towards a more general agreement on the structural causes of poverty,the pressure on the government to increase redistribution will build.

Hong Kong’s redistributive policy-making in recent years has been definedby a set of intertwined demographic, social, economic, and political trends. It isnow one of the most rapidly ageing societies in Asia and faces serious problemswith regard to elderly poverty. Meanwhile, Hong Kong remains one of themost unequal societies in Asia and, to some extent, among the developed econ-omies worldwide. The HKSAR government remaining a largely authoritarianstructure (Lee 2005 ) runs to its own timetable and seems reluctant to satisfythe demand for greater redistribution. The financial secretary of the HKSARgovernment has latterly been criticized for the government’s reluctance tocommit to an expansive and institutionalized welfare state against a huge,accumulated budget surplus. Meanwhile, in order to ease the concerns of law-makers and the general public alike, the government has also promoted a num-ber of one-off general benefits. A striking case is Scheme $6 ,000 wherein in2011, the government gave HK$6 ,000 to all adult holders of a Hong Kongpermanent identity card when contemplating how to spend public money afterthe coffers of the government were overflowing. Many people, nonetheless,were not satisfied with this, depicting the scheme as an example of the govern-ment’s inability to redistribute public money wisely and proactively.

As well as evaluating public perceptions, existing evidence also points to thepessimistic side of the residual welfare regime in Hong Kong. As pointed outby Wong (2008), the welfare level in Hong Kong, measured by social expen-diture as a share of GDP, lags almost 40 years behind the average for theOrganisation for Economic Co-operation and Development countries.6

Certainly, the informed public tends to express widespread disagreement withgovernment policy in this area. This will generate ongoing tension betweensocial demand and the government’s response, complicating any efforts toimprove redistributive policy in Hong Kong.

Conclusions

By examining a unique survey data collected in Hong Kong, we may concludethat both self-interest and social values affect public attitudes towards



redistribution. People who foresee themselves as more economically vulnerabletend to support state intervention and enhanced redistribution. Similarly, per-ceiving oneself as being of a lower social class can increase one’s support forgovernment assistance. More importantly, perhaps, those who consider socialinjustice to be the most important cause of poverty are more likely to supportredistribution. Therefore, the findings of this study indicate that public supportfor redistribution in Hong Kong may derive from two sources: self-interest asso-ciated with individuals’ own financial or other condition, and social values,which may be more stable and detached from personal circumstances.

The theory underpinning public attitudes towards redistribution furthersuggests that the structure of the welfare state also plays a part in shaping pub-lic demand for state intervention.7 As far as the Hong Kong case is concerned,the picture is intricate. The Hong Kong residual welfare model, and to someextent the liberal welfare framework, seems to be increasingly challenged inmodern times. The demand for increased state intervention has grown. Inour survey,57.80 per cent of respondents agreed that the government shouldbe concerned with mitigating income disparities while only 13 .6 per centdisagreed with the principle of state intervention. The traditional liberal wel-fare model tends to tell a story of self-reliance combined with the modestacceptance of state assistance. Nevertheless, in view of enhanced incomeinequalities, people are not only becoming more sympathetic towards thefinancially marginalized but also keener to demand that the government pro-vide support to mitigate the underlying problems. In particular, against thebackdrop of economic prosperity and buoyant government revenues, minimalintervention from the HKSAR government has been viewed as a manifesta-tion of its attempts to shirk its responsibilities to its constituents.

The case study in Hong Kong may shed light on other economies. As alaissez-faire economy aligned with a residual welfare regime, the HKSAR gov-ernment has deliberately constrained its role in some social policy areas. In themeantime, Hong Kong people used to tolerate income inequality and viewedit as an acceptable side effect of the Hong Kong spirit that different personalefforts will naturally lead to a widening income gap. However, in our survey,many people view poverty and income inequality as societal problems insteadof individual failures. Therefore, property hegemony as a story related toincreasing income inequality and worsening poverty has hit local headlines.Our findings suggest a nuanced picture of public perceptions towards socialpolicy and pertinent policy structure changes in a turbulent and fast-changingeconomy. Although some new findings in a traditional residual welfare stateare presented, we also acknowledge the limitation of our study. Given thisstudy is not developed on a longitudinal dataset investigating public attitudestowards redistribution over years in Hong Kong and the sample size of thissurvey is small, the observation on redistribution attitudes should be treatedas tentative. Perhaps more importantly, this survey was conducted in a goodeconomic environment with increased government revenues. Whether ornot the findings are still valid remains to be seen if Hong Kong faces aneconomic downturn.

This study testifies to a complex interaction between government policyand popular demand. As noted previously, before 1997 , there was a



consensus pushing the HKSAR government to adopt a more inclusive anduniversal welfare system. However, after the handover to the People’s Repub-lic of China, especially when experiencing several economy downturns, theHKSAR government has reverted to a conservative approach defending aresidual welfare state. Nevertheless, over the past decade, the demand forgreater redistribution has increased steadily. The gap between governmentpolicy and popular demand has been enlarged; therefore social policy-making, especially needed in an ageing society with a substantial incomegap, has become a deadlock. All this has profound implications for othereconomies, particularly developing and transitional economies. Amid chang-ing ideology and social values in the society, the HKSAR government has hadto begin addressing the redistribution issue. The government has latterlyaccorded great attention to poverty and housing issues in Hong Kong. First,it has revived the Commission on Poverty as an inter-departmental organiza-tion advising the government on making policies related to poverty. TheCommission on Poverty, abolished in the previous administration, has workedon the setting of a poverty line and an in-depth analysis of poverty situation inHong Kong. Second, the HKSAR government intends to boost housing sup-ply especially public housing provision. As discussed before, the housing issueis intertwined with income inequality and poverty in Hong Kong. Addressingthe housing issue requires substantial government intervention and morepublic money in this area. As social values or ideologies related to incomeredistribution are evolving, the interplay between government’s new effortsand public attitudes remains an open question.

When remaining wedded to the model of residual welfare, the HKSARgovernment should pay attention to perceptions of economic vulnerabilityamong its citizens and direct more resources to those who are being margin-alized due to a variety of reasons such as economic globalization and integra-tion with mainland China. However, another caveat is in order here.Allocating more resources to social policy is not enough to tackle the rootcause of social ills. The government must have a proactive policy on theone hand, but on the other hand, a more democratic and responsive statemust be developed if public demand is to translate into effective governmentpolicy.8

Acknowledgements

Support for this research was provided by the Research Grant Council PublicPolicy Research Fund (HKIEd 7005-PPR-12) and Start-up Research Grantat The Hong Kong Institute of Education RG 86/201202913R. Correspon-dence concerning this article should be addressed to Professor Kee-Lee Chou.

Notes

1. As noted later, a theory predicts that individuals tend to be less supportive of redis-tributive programmes in economic good times (Jaeger 2013 ).

2. Svallfors (2012 ) aptly refers the self-interest hypothesis to a political economy



approach to explaining public attitudes towards redistribution with the socialvalues hypothesis being a political-sociological approach.

3. We thank a reviewer for highlighting this point.4. Intriguingly, using the 2008 European Social Survey, Ervasti (2012) reports that

people with higher levels of education tend to bemore supportive of the welfare state.5. Empirical evidence suggests that the majority of people view property hegemony as a

serious issue in Hong Kong (Forrest and Yip 2014).6. One of the reasons for this may relate to the Asian financial crisis in1997. In the face

of budget shrinkage and indications of continued fiscal pressure in the near future,the HKSAR government then introduced a budget-driven welfare restructuringwhich further reduced welfare spending (Lee 2006; see also Lau and Mok 2010).

7. Bendz (2015) points out that the existing policy, as an input, will also affect publicattitudes and mass opinion.

8. As noted by Wong (2006), moderating public expectations is also crucial for theHKSAR government.

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