Although efficiency theories have been adopted by governments around the world to improve public services, Hong Kong escaped their prescriptions until recently. In order to evaluate why such policies have been adopted, the authors develop a theory-led evaluation in which public choice theory and transaction-costs economics are synthesised to present a contingent efficiency framework. The study is focused upon the housing, planning, and lands arena, and includes analysis of policy documents and interviews with a range of civil servant, politicians, professional bodies, and private sector providers. The findings indicate that efficiency theories now explain institutional reform in Hong Kong—the variables of competition, size, asset specificity, monopoly, and change in public officials, together with the context within which public organisations in Hong Kong work, explain why such policies have now been pursued.
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