20 August 2019

What is the rational solution to the Hong Kong protests?

Thanks to Singapore's authoritarian and paternalistic leadership, its activists have never had a chance to commandeer a successful negotiation with the government. Deprived of such experience and pushed towards the "oppose, protest, and railblock" model of activism, these civil society actors fail to recognise that skilful negotiation is part and parcel of everyday social processes within a polity to moderate policy given disparate and competing preferences on the ground.

From the point of view of Singapore's activists, the Hong Kong protests can only end in a "Springtime for Xi Jinping" (aka the coup from above) or a "Hong Kong Spring" (aka the revolution from below), both of which fit into their experience of activism as futile but dramatic political theatre but are in fact the least likely outcomes in even semi-democratic, moderately liberal, wealthy polities like Hong Kong. Little is expected from Singapore's activists aside from virtuous signalling that they "stand in solidarity" with Hong Kong and will shed the requisite amount of tears of appropriate joy or sorrow when the time comes. But what happens when we approach the protests rationally?
So what if we look at the the Hong Kong protests as a form of political negotiation?

What happens when a protracted series of mass protests and demonstrations occur? How can we predict if these social movements will be co-opted or rejected, suppressed or boil over into revolution? The fields of political science, economics, and mathematics (in the form of rational choice theory, game theory, and democratic transition models) have been applied to case studies from the Glorious Revolution of 1688 to transitions to democracy in Eastern Europe, Taiwan, and South Korea, to populist revolutions and elite coups in Latin America. Their answer lies in how negotiations pan out, and in what circumstances they pan out.

Despite their differences, the 3 existing varieties of theories agree that a protracted and predictable series of mass demonstrations tend to result in a period of behind the scenes negotiations between rulers and demonstrators. Preferences or preferred outcomes of each faction are communicated during the period of protests. But during the negotiation process, an additional sub-faction game plays itself out: hardliners, reformers, opposition radicals, and moderates on either side make rational decisions based on their preferred and tolerated payoffs, factional strengths, and to reach across the aisle while throwing a sub-faction of compatriots under the bus.

Let's now look at the Hong Kong situation of One Country, Two Systems - the alleged root of Hong Kong's political, policy, and governance dysfunction and a target demand for reform by the current protest movement.

The Zero person game

Wealth created by an invisible hand is more real than wealth created by central planning
Assuming China had no specific agenda for Hong Kong, no plans for premature Sinification, the fate of Hong Kong after its 50 years of autonomy would be more years of autonomy and Hong Kongers have no rational reason to revolt or protest. The original intentions of the drafters of the Sino-British Joint Declaration and the Basic Law in 1985 and 1990 appear to be this: Hong Kong as an already-existing financial hub contains the capitalist and democratic institutions necessary for its continued success. It can make China as prosperous if adopted as a model. Even if China were to make itself an economic powerhouse through state-directed means, Hong Kong as a continually and independently prosperous financial hub would still serve as the Chinese insurance policy against the unexpected flaws and crises of state-directed economic development, and a gateway from which dodgy Chinese state-created wealth can be turned into internationally accepted coin.

It's like the old Russian joke: Even if the Communist revolution succeeds, the Soviet Union will demand that Switzerland be preserved as the only capitalist state in the world - because communists need to know the market price for goods from somewhere!

The Peking game and the prisoners' dilemma

Regime apologists typically ask: Why protest and resist when Hong Kong is going to be Chinese sooner rather than later? Why insist on a lose-lose outcome, aka the immediate destruction of Hong Kong (presumably by a Springtime for Xi Jinping scenario)?

The drafters of the Sino-British Joint Declaration and the Basic Law that didn't count on China developing a version of capitalism with Chinese characteristics, where it would promote and enrich loyal oligarchs and subsidise key industries in their bid to be global behemoths. Not only that, but its policy over the past 2 decades are obvious: Peking intends to sideline Hong Kong into a second-tier Chinese city, tolerate the local tycoon cartel who are responsible for its policy failures and legislative gridlock, and erase the city's autonomy way ahead of schedule.

Game theory responds: Where is the benefit Hong Kongers for going along with Peking's attempt to Sinify the city? Absent of any positive payoff, the rational choice for Hong Kongers is to play the Chicken Game with Peking. How eager is Peking to destroy Hong Kong immediately and deprive itself in the remaining decades of having an insurance policy, gateway, and financial hub to launder its dodgy wealth into internationally acceptable coin?

Wrinkles in the negotiation game

The Hong Kong protests are famously "uncoordinated" even if not quite spontaneous. This is no doubt a practical response to the Hong Kong government cracking down on leading Umbrella protest activists, but has the downside of removing negotiators from the equation.

Who can represent the protest movement? How can the pro-reform legislators in Hong Kong's dysfunctional government initiate and sponsor negotiations with "Chief Executive" Carrie Lam, the pro-Peking factions, or the tycoon cartel's representatives in Hong Kong government? How will a negotiation process and a negotiated compromise look without representatives from the protest movement?

But it's not the entire fault of the protesters. Who can and should negotiate for Hong Kong? Its chief executive? Xi Jinping and his party apparatus in Peking? Peking's supporters in Hong Kong legislator? The tycoon cartel? Lam may not have the autonomy to negotiate any reform, if she has any real autonomy and decision-making powers at all. Peking stepping in and solving the problem (even with a non-violent, less authoritarian but vaguely reformist compromise) exacerbates the problem of a Legislative Council that is not fit for purpose.

The endgame

The upside is that Peking has already publicly hinted who it is willing to throw under the bus. In its immediate response to the initial outbreak of violence in the protests on 28 July, the Hong Kong and Macau Affairs Office chief offered his empathy for Hong Kong youth and their struggle for "affordable housing and employment" - social goods that the Hong Kong government has failed to deliver, with the connivance of the self-enriching tycoon cartel.

Based on the following criteria:
Protests do not peter out in numbers and frequency when school term resumes in September (or, if the protests are temporarily suspended for school term, they resume later without petering in numbers and frequency);
Protests do not spiral out into more violence;
Protests maintain wide support across Hong Kong society while not tipping the danger point;
Pro-Peking demonstrations continue unhindered in their current numbers,

we make the following set of predictions:
Peking unilaterally throws either Lam or a few members of the tycoon cartel under the bus. Who gets thrown depends on the LamBot having another embarrassing public malfunction or a tycoon or two becoming the focus of future demonstrations, whichever happens first;
The reform deal will deliver a "liberalised functional representation" rather than a universal suffrage system; and
Peking to remain at the border with its armoured personnel carriers conducting "exercises" for public consumption.

We propose that "Springtime for Xi Jinping" is an implausible scenario. A violent crackdown is out of the question based on the widespread support for the protests. In other words, it's not just university students unlike Tiananmen. It's a wide swathe of civil society, and Hong Kong society. A violent crackdown will thus alienate Peking from Hong Kong society instead of repressing the protest movement. Demographically, the attendance at the protests put China at a severe disadvantage. The protesters and their supporters are far younger and better educated than the average age of China. It is they who can wait the issue out to the expiry date of Hong Kong's autonomy while China's population ages way before it becomes a rich nation, much less consolidate its wealth.

Still, politics is a game of skilful negotiated outcomes, and there is no guarantee that Peking, the Hong Kong protesters, Carrie Lam, or the tycoon cartel, having made countless missteps along the way, will not make any blunders in the near future.

Recommended reading
Josep Colomer. 2000. Strategic Transitions: Game theory and Democratization.
Karl Dieter-Opp, Peter and Petra Hartmann. 2018. The Rationality of Political Protest. A Comparative Analysis of Rational Choice Theory
Karl Dieter-Opp, Peter Voss and Christiane Gern. 2008. Origins of a Spontaneous Revolution.
Yi Feng and Paul J Zak. 1999. The Determinants of Democratic Transitions, Journal of Conflict Resolution 43(2):162-177
Adam Przeworski. 1991. Democracy and the Market: Political and economic reforms in Eastern Europe and Latin America.
Barry Weingast. 1997. The Political Foundations of Demoracy and Rule of Law, American Political Science Review 91(2):245-63.
Jakub Zielinski. 1999. Transitions from Authoritarian Rule and the Problem of Violence, Journal of Conflict Resolution 43(2):213-228.

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