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Examines work investigating the impact of the crisis on social welfare policies two Asian countries — Hong Kong and Korea, and argues that these two states were not prepared for the crisis. States that Hong Kong is adopting a neoliberal approach to social welfare, contrasting this with Korea taking unprecedented steps to restructure the social security system, after its economy nearly collapsed, taking a more developmental approach to social policy. Posits that only time will tell whether Korea’s momentum of change can be sustained, while in Hong Kong social security policy will still be dictated by a neoliberal agenda in the near future.

The expansion of social welfare in advanced capitalist countries following the Second World War has been phenomenal. Concomitant to this is the mushrooming of comparative social research devoted to the analysis of welfare states. The central question in comparative policy discourse has been the search for the determinants of social welfare development. There is no consensus over the structural determinants for welfare efforts. However, the literature on comparative social policy has identified a significant number of variables which spur social policy development: industrialization, urbanization, modernization, working‐class mobilization, union strength, state and its particular structure, open economy, diffusion, military spending, and national ideology (Wilensky & Lebeaux, 1965; Wilensky, 1975; Uusitalo, 1984; Wilensky, 1985; Flora, 1987; O'Conner, 1988; Esping‐Andersen, 1990; Pierson, 1991; Wong & Daley, 1991; Janoski & Hicks, 1994).

Examines the extent to which social policy adopted by the colonial government in Hong Kong (prior to its hand‐over China in 1997) has set the agenda for the government of the newly formed Special Administrative Region (SAR). Chronicles the historical development of social policy in Hong Kong since the inception of the colonial government in 1842; identifies that, with the exception of a short‐lived period of expansionism (stimulated by social unrest in the mid‐1960’s) social welfare provision appears to have been low on the government’s agenda and incremental in nature ‐ the emphasis being on economic growth, rather than public spending on welfare programmes. Examines the strengths and weaknesses of this incremental approach; outlines the commitment of the SAR government to the market economy and its proposals for a modest increase in welfare provision, essentially building on the legacy left behind by the colonial government.