The telecommunications regulatory regimes in Hong Kong and Singapore: When direct state intervention meets indirect policy instruments

Successful economic liberalization somewhat paradoxically requires high levels of state capacity, while 'deregulated' markets deploy new regulatory mechanisms that, rather than diminishing state power, reconfigure it. A comparative case study into the recent liberalization reforms of the telecommunications sectors of Hong Kong and Singapore is presented here in order to throw light on these developments. The end result of the reform processes in each jurisdiction is quite similar - globally open, competitive and highly efficient telecommunications markets in which major global companies are leading players. However, the routes by which this end result was achieved tell different stories about the manner in which governments balance domestic interests in the process of liberalization. They build on local institutional strengths and deploy instruments appropriate to their own bureaucratic and political contexts. Correspondingly, in constructing the 'new regulatory state', they produce subtle variations on the pro-competitive model of regulation. However, detailed analysis of the two reformed telecommunications regimes shows that underlying these differences is the prominence of a common set of instruments that make less use of highly intrusive, direct forms of state power but greater use of more indirect forms that thrive 'in the shadow' of state authority, a phenomenon that is at the heart of theorizing about the new regulatory state. These instruments enhance rather than diminish state capacity where they are deployed strategically by governments.