Beyond economic growth: The genuine progress of Hong Kong from 1968 to 2010

We estimate the Genuine Progress Indicator of Hong Kong from 1968 to 2010. We present the results for all items of the economic, environmental and social sub-indices, and compare these sub-indices to the GPI and the GDP. Our main finding is that while in other countries the GPI has been dropping (since the 1970s or 1980s in most Western countries) or has been stable (since the 1990s in many Asian countries), in Hong Kong the GPI has an upward trend throughout the study period. We have five explanations for this trend: 1) the economic restructuring that has taken place from the 1990s, when labour-intensive industries left Hong Kong for neighbouring China; 2) the fact that many of these relocated industries were heavily polluting, which results in the environmental costs shifting to China; 3) The lack of public financial support for declining industries and sectors that in other countries are heavily subsidised (e.g., farming), resulting in a more efficient use of public funds; 4) the small size of Hong Kong, which results in more efficient public investment, allows for lower taxation, and reduces the cost of transportation, among others; 5) the high investment in fixed capital formation, which increases the GPI.