Housing finance between social needs and economic realities: The dilemma of policy transfer under neo-liberalism.

Nubi, T.G. ; Oyalowo, B.A. (2010)

Scholarly article

Article

The aim of this paper is to show how the interplay between social needs and economic realities affects housing policy in developing countries. The paper addresses the very topical issue of housing finance policy for low-income dwellers in rapidly urbanizing African countries. The paper locates housing finance firmly within the neo-liberal development framework being canvassed as the panacea to underdevelopment in these countries and argues that the dilemma facing governments in the current economic downturn is manifested in the realities of decreasing productivity, marginal economic growth, low development and massive urbanization problems versus low-income housing need within the constraints of a neoliberal macro-economic policy. The study adopts a comprehensive content analysis methodology which is based on the review of literatures, the analysis of media accounts of government activities in the housing sector and analysis of official government policy statements. This methodology is applied to housing policy in Nigeria (as a case-study of developing countries) and Britain (as a case-study of developed countries). Findings reveal interesting dimensions of change in institutional and political transformation of housing services in developed and developing countries: while housing finance reforms are generated within the system in developed countries, it is led by international institutions such as IMF and World Bank in developing countries. Thus, while developed countries have responded to the present economic downturn by adopting ‘more government’: direct injections into the housing finance basket, developing countries have exhibited a dilemma –seeking to satisfy legitimate, obvious housing needs and facing the need to conform to neoliberal policies in the hard realities of low productivity and marginal economic growth. The result has been the adoption of an ‘enabling’ toga which is overwhelmingly displayed as reduction of fund injection into low-income housing and a disturbing readiness to appropriate this role to a reluctant private sector. The paper concludes that sectorial policy transfers are incapable of meeting developmental needs when they take place within the context of divergent macroeconomic policies. What is needed therefore are policies that are in tune with local realities, and are flexible and responsive to change. This is best achieved with homegrown policies. However, governments necessarily operate within a comity of nations and therefore have to sign on to global agreements. The challenge for governments here is to localize foreign policies and then mainstream them into indigenous policies and hence ensure that when policy transfer occurs, it is not to the detriment of the people they are meant to serve.