Institutional arrangement and unauthorised building works in Hong Kong

Abstract

PurposeTo explain the serious social problem of unauthorised building works (UBWs) in Hong Kong and why this problem is difficult to overcome.Design/methodology/approachAn institutional economics approach is adopted. This paper concentrates on the governance zone of the institutional arrangement.FindingsThe current institutional arrangement in Hong Kong encourages owners to build UBWs, and makes the identification of UBWs very complicated. This paper concludes that the existing framework of governance fails to take into account the conflict of interests in collective goods. The no‐retrospective‐approval stipulation also renders a no‐alternative solution.Research limitations/implicationsIt is a case study of Hong Kong, but it has research implications on institutional economics under the current arrangement of co‐ownership.Practical implicationsAn important element in structural surveys is to ensure the structural safety of a building. An understanding on the governance of UBWs has serious implications for the structural survey approach.Originality/valueThis paper is the first paper on exploring UBWs from an institutional economics framework.