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The World Bank Research Observer Advance Access published online on August 4, 2005
The World Bank Research Observer, doi:10.1093/wbro/lki007
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© The Author 2005. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: journals.permissions@oupjournals.org.

Article

Housing Policy in Developing Countries: Conjectures and Refutations

Robert M. Buckley 1* and Jerry Kalarickal 2*

1 Housing advisor at the World Bank
2 Consultant at the World Bank

* To whom correspondence should be addressed.
Robert M. Buckley, E-mail: rbuckley{at}worldbank.org
Jerry Kalarickal, E-mail: jkalarickal{at}worldbank.org


  Abstract

This article discusses housing policy in developing economies. It examines recent research findings in light of earlier arguments as to the benefits of more market-oriented approaches. It also looks at whether the recommendations of earlier work have been refuted or developed in subsequent analyses and policy measures. In particular, it reviews the empirical analysis of the effects of policy on housing supply, the richer understanding of the effects that land market regulations have on housing affordability and the functioning of urban areas, and the alleged mysterious effects that researchers claim effective property rights have on housing policy and on development more generally. It also examines the effects of the increased emphasis on community participation, showing how it helps to more fully reconcile the incentives faced by beneficiaries of housing policy and donors. Finally, it examines recent literature on the welfare effects of rent control. The article shows that some of the conjectures as to the likely benefits of more market-based policy have been refuted, but large welfare gains for poor people can still be realized by adapting this approach. Furthermore, this approach appears to be gaining ground as the consensus approach to effective housing policy.


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