Cities of Industry and Vice Economic Development, Neo-Institutional Theory and Path Dependence in Hong Kong and Macau, 1800-2000

Abstract

This article attempts to fill a gap in scholarly literature regarding economic development in East Asian states. It pursues this goal by utilizing neo-institutionalist and path dependency theory in order to analyze the economic development pathways of Hong Kong and Macau since the beginning of the 19th century. These theories allow us to examine the formalization of institutions in Hong Kong and Macau during a period of high imperialism which had important bearings on economic development in the 20th century. By recounting the collapse of traditional trade networks in the south China sea at the beginning of the 19th century we establish a framework for the initial development of these institutions. We use quantitative analysis of colonial statecraft in the late 19th century which allows us to establish the context of the early development of these institutions. We also address theories of institutional ‘lock-in’ through a series of economic crises in the 20th century. This final section builds a narrative framework which allows us to address the economic development of Hong Kong and Macau through the lens of institutional development.