Informality within government agencies tasked with controlling informal economic practices
10.7340/anuac2239-625X-3075
The trend to dualism in the study of in/formality means that we usually neglect informality within government, usually seen as the locus of formality, but in practice usually relying on informal practices to get things done. This commentary uses archival documents on colonial Hong Kong to challenge this duality.
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Alan Smart
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Informality within government agencies tasked with controlling informal economic practices
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2017-12-31
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Alan Smart
2017/12/31
10.7340/anuac2239-625X-3075
91
University of Calgary, Canada
2239-625X
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Informality within government agencies tasked with controlling informal economic practices
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                                              2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 91-95




                                                                                      FORUM




Brindisi to the Brindisians, graffiti in Brindisi, Italy. Photo by A. M. Pusceddu.


In/formalization
Edited by
Alan SMART, Josephine SMART, Filippo M. ZERILLI

Contributions of
Stamatis AMARIANAKIS, Lenka BRUNCLÍKOVÁ, Dolores KOENIG, B. Lynne MILGRAM, Sarah
MUIR, Antonio Maria PUSCEDDU, Alan SMART, Mechthild VON VACANO, Filippo M.
ZERILLI & Julie TRAPPE.




This work is licensed under the Creative Commons © ALAN SMART
Informality within government agencies tasked with controlling informal economic practices
2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 91-95.
ISSN: 2239-625X – DOI: 10.7340/anuac2239-625X-3075
IN/FORMALIZATION                                                                           91




Informality within government agencies tasked with
controlling informal economic practices

Alan SMART
University of Calgary




ABSTRACT: The trend to dualism in the study of in/formality means that we usually neglect
informality within government, usually seen as the locus of formality, but in practice usually
relying on informal practices to get things done. This commentary uses archival documents
on colonial Hong Kong to challenge this duality.




   At its most basic, informality is not following the formal procedures de-
manded in a specific domain of practice (Smart, Zerilli 2014). Yet, distin-
guishing between formal and informal ways of doing things has important
consequences, as Max Weber clearly recognized in his work on bureaucracy. I
stress only one of these, how a dualistic account in which government is the
institution which forges and enforces formal regulations to govern economy
and society obscures informality within government itself. Corruption is an
exception, but is characteristically explained away by references to individual
“bad apples”, the inappropriate intrusion of private interests into public con-
cerns, or persistence of “traditional” habits that need to be “modernized”
through rational bureaucracy. Even in its exceptions, recognition of govern-
mental informality reinforces identification of formality with government
and law. The solution to corruption, then, is to thoroughly impose the rule of
law on government itself.
   This kind of symbolic system, where formal and governmental are equated
and seen as the polar opposite of informal and societal (formal:informal /
government:society), not only serves as a “distinction” that elevates govern-
ment above society, but also obscures the inescapable interpenetration of
the informal into the formal and the formal into the informal. The situation
resembles Bruno Latour’s account of “the moderns” who conceived culture
and nature as absolute opposites, making possible rapid development of sci-

                                             2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 91-95
92                                         ALAN SMART, JOSEPHINE SMART, FILIPPO M. ZERILLI (EDS)


ence, which in turn continually produces hybrids which confuse the bound-
aries between culture and nature. Just as Latour argues that we have “never
been modern”, I would suggest that we have never been formal. The more ef-
fort that is made into “purification” through formalizing procedures, the
more inevitable it seems to be that informality creeps back in, as a fix for
rigidity and conflicts between diverse formal regulations. Modernity itself
can be seen as the rise of formality, progressively displacing the personalism
and venial alliances of monarchial courts by rational rules and procedures
that theoretically apply to all citizens. The growth of formality, however, is
not complete and arguably could never be complete, as research into colonial
Hong Kong reveals.
   Before the 1970s, bribe-taking was widespread in Hong Kong’s govern-
ment, particularly among street-level officials. They had to deal with a Chi-
nese population distant from a government they had no formal influence
over, including refugees who brought expectations from Republican China
that dealing with government was best avoided and if necessary required
bribes. Many had to break laws to survive, so opportunities for squeezing
squatters, hawkers and unlicensed factory operators abounded. Observers
thought the problem emerged because colonial rules «concerning corruption
were incongruent with Chinese “folk norms”; what the law regarded as cor-
rupt, ordinary Chinese people often saw as a normal part of life» (Hampton
2012: 228). The danger of orientalism in corruption discussions pointed out
by Gupta (2012: 81) is visible here, but dubious stereotypes clearly have em-
pirical consequences, legitimating Europeans taking bribes.
   Regulation creates opportunities for profits by those with discretion over
control of the activity. Domains where government tolerated illegal practices
were particularly prone to corruption. Unlicensed street vendors «were per-
haps the most vulnerable» (Hampton 2012: 228). The police had «ready op-
portunities» for corruption because they were responsible for issuing licenses
to «massage parlours, dancing schools, public dance halls, billiard room and
money changers» (Jones, Vagg 2007: 358). Corruption syndicates operated
among the police, so that regular payments from illegal gambling establish-
ments, for example, were distributed among officers.
   Hong Kong has been seen as the world’s best example of «successful trans-
formation from widespread corruption in the 1960s to clean government in
the 1970s» (Manion 2004: 2). A key element in this success was precise de-
marcation between legal practices and illegal corruption. For example, to
avoid being punishable as bribery, acceptable gifts to government officials
were limited by value. Administration, at least in Weberian forms, requires
sharp boundaries between acceptable and unacceptable practices.


2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 91-95
IN/FORMALIZATION                                                                     93


   It was thought crucial to limit official discretion among officers that
worked at street level. In 1960, Governor Robert Black wrote that «the exer-
cise of discretionary power by junior officers is inevitably open to abuse.
When we begin a revision of the laws ... it is intended to pay particular atten-
tion to those laws which give discretion to junior officers 1». Anti-corruption
is often thought to be best achieved through reducing opportunities for cor-
ruption. Setting out clear procedures for how governmental work should be
done reduces discretion. A report of the Advisory Committee on Corruption
stated that a key response to corruption problems was that «licensing proce-
dures have been simplified, accelerated and clarified». Licensing should be
closely examined and reformed because «procedural delays could cause cor-
ruption in some form or other. The Organizational Survey Unit is also contin-
ually seeking ways of improving procedures, forms, etc». Corruption is thus
seen to result from informality of governmental practice, particularly when
government officials are in regular contact with the public.
   Discretion by government agents has often been seen as a source of differ-
ential justice discriminating in favor of the majority or the powerful and
against minorities and stigmatized groups. It is also sometimes seen as un-
avoidable if street level bureaucrats are to be able to effectively perform their
jobs. Formalizing rules for state officers does not necessarily end discretion,
but may instead tend to displace it to less regulated fields or practices. The
outcomes of administrative efforts to reduce discretion by street-level bu-
reaucrats vary greatly by the specific nature of the position, and the practical
power of those officials to control information, among other variables.
   Ironically, clear definitions of legal process may have detrimental out-
comes as well as benefits. Turning grey areas into sharp divisions between le-
gal and illegal may foster unscrupulous but mostly legal behaviors of collu-
sion. Precisely formulated procedures can reduce the risks involved in profit-
ing from public office, in ways that are often seen by the public as illicit even
when formally legal. Those with power can cross the line more easily with
less risk. Ending illegal corruption may encourage legal forms of collusion.
Opportunistic rent-seekers may find it easier to skirt closer to legal limits
while still being safely on the legal side when that side is explicitly inscribed.
In such circumstances they can adhere only to the letter of the law, without
concern for its “spirit”. Exact formalization of what counts as corrupt may
make things worse for ordinary people, or anyone who cannot afford lawyers.
Sharp boundaries between legal and illegal may offer more impunity for
those trying to game the system. The rich and powerful have access to re-
sources that help them manipulate technicalities.
1. Quotes without citations are all from archival documents accessed at the Hong Kong
Public Records Office.

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94                                         ALAN SMART, JOSEPHINE SMART, FILIPPO M. ZERILLI (EDS)


   Even when no formal rules are broken, there are many ways in which gov-
ernment and business can (and do) cooperate in ways seen by many mem-
bers of the public as immoral or illicit. I refer here to forms of collusion that
are technically legal but meet widespread public disapproval. Anger at gov-
ernment has soared in the United States and elsewhere. Yet, interactions me-
diated through what Janine Wedel (2009) calls the «shadow elite» have so
much influence as to make public disapproval usually ineffective.
   No government can operate without discretion. Administrators, like
judges, must operate on the basis of judgements about what is best to do
when there is no obvious choice presenting itself. What is possible, however,
is to move the locus of discretion farther up the bureaucratic hierarchy, as
happened in Hong Kong after 1972. It clearly had many positive outcomes,
reducing the weight of petty extortion on Hong Kong’s people, helping to re-
store a degree of public trust in the colonial government, and creating a rep-
utation for reliable rule of law that helped to make Hong Kong one of the
world’s most important financial centres.
   The particular kinds of anti-corruption interventions may have set the
scene for spectacular corruption scandals at the very top of the government
hierarchy, such as the conviction in 2014 of Rafael Hui, the chief secretary
for administration from 2005 to 2007, the second highest ranking position in
the government, for taking bribes from a property company. His boss, Donald
Tsang, was convicted of misconduct in public office in 2017. My argument is
not that stopping the petty corruption at the bottom of the bureaucracy
pushed it upwards, like squeezing a balloon. Rather it is that the cost/benefit
calculations put in place by anti-corruption meant that if you are going to
take a chance by engaging in corrupt behavior, it better be well worth it, and
the reduction of discretion at the bottom of the ranks means that they do not
usually have such opportunities. However, the more fundamental problem
besetting contemporary Hong Kong is not illegal corruption so much as
(mostly) legal collusion, which has emerged for a complicated set of reasons
related to the complex post-1997 processes of governance (Fong 2013).
   Equating informality with society, and its regulation with government, ob-
scures all of these processes, at best individualizing corrupt acts and empha-
sizing “more of the same” in applying more formality within governmental
procedures. Only by recognizing that governmental informality is pervasive
and deserving of analysis in the same terms as societal informality can we
move forward in understanding both formalization and informalization.




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IN/FORMALIZATION                                                                     95




REFERENCES

Fong, Brian CH., 2013, State-Society Conflicts under Hong Kong’s Hybrid Regime,
      Asian Survey, 53, 5:854-882.
Gupta, Akhil, 2012, Red tape: Bureaucracy, structural violence, and poverty in India,
      Durham, Duke University Press.
Hampton, Mark, 2012, British legal culture and colonial governance: The attack on
      corruption in Hong Kong, 1968-1974, Britain and the World, 5, 2: 223-239.
Jones, Carol A. G., John Vagg, 2007, Criminal justice in Hong Kong, New York,
      Routledge.
Manion, Melanie, 2004, Corruption by Design: Building Clean Government in Mainland
      China and Hong Kong, Cambridge, Harvard University Press.
Smart, Alan, Filippo M. Zerilli, 2014, Extralegality, in A Companion to Urban
      Anthropology, Donald M. Nonini, ed, Malden, Wiley-Blackwell: 222-238.
Wedel, Janine, 2009, Shadow Elite: How the World’s New Power Brokers Undermine
      Democracy, Government, and the Free Market, New York, Basic Books.




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