Review of public budgeting and financial management

User charge is an alternative option to privatizing public service provision. But its use as a policy instrument, compared with that of asset sales or contracting out, for instance, is less researched and documented. This paper tries to fill the gap. By contrasting the experiences of employing user charge for two public services in Hong Kong with diametrically opposing results, this paper offers preliminary conclusions on several lessons, which governments, in their drive toward improved efficiency, can learn in commercializing their trading activities. Implications to public policy making are also suggested. These include: the user-pays principle has to be applied equitably, the public service market has to remain depoliticized, the management has to be transformed to behave more entrepreneurially, and the users have to be educated.