This article examines how the Hong Kong Special Administrative Region government squares the welfare circle. Because of the constrained institutional pathway of the established welfare system, the government is not successful in either reducing public expenditures or raising taxes. The article argues that it is important to look into the role of institutional design in the management of public expectations.
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Errata: In the September/October 2016 issue (volume 56 number 5, pages 836 and 849), there was a technical printing error in Figures 1b and 2 of the article by Ajay Raina that resulted in a loss of data on the graphs. This online article contains the restored figures in their original, correct state. The error is regretted.