Combating financial crimes in Hong Kong and Singapore and the quest for competitiveness: A political economy perspective

Despite the growing policy attention to financial crimes, theoretical discussions about the policies that the state has pursued to deal with this problem have been lacking. This paper develops a theoretical framework to understand the politics of financial crimes. It argues that policy efforts against financial crimes pursued by the state can be explained with reference to the financialization of the global economy and the quest for global competitiveness. At the same time, these global forces are mediated by the dynamics of domestic politics, which determines the pace and the scope of financial regulation. This paper then applies this theoretical framework to explain the differences between Hong Kong and Singapore in their efforts to deal with financial crimes. The difference in terms of their regulatory thrusts in financial affairs relates to their divergent economic ideologies. The final part of this paper highlights the key challenges that Shanghai is facing in dealing with financial crimes with reference to the relevant historical experiences of Hong Kong and Singapore. Copyright © 2014 City University of Hong Kong.