Habitat International 25 (2001) 191}208

Jorge Hardoy Honorable Mention Paper, 2000

Refocusing the housing debate in developing countries from
a pluralist perspective
Ramin Keivani *, Edmundo Werna

Faculty of Built Environment, South Bank University, 202 Wandsworth Road, London SW8 2JZ, UK

Research and Development Unit, Headquaters of the United Nations Volunteers Programme, UK

Abstract

The debate on housing policy in developing countries since the late 1980s has been dominated by the
World Bank led strategy of developing the housing sector as a whole by enabling primarily formal private
markets to work more e$ciently. Yet, the emphasis on private markets has led to the exclusion of
complementary and alternative public, co-operative/community based and informal modes of housing
provision from serious policy consideration. This paper argues for the adoption of a more integrated housing
policy that is based on the recognition and better co-ordination of plurality of provision. Thereby, not only
allowing further development of speci"c modes in appropriate socio-economic settings but also enabling the
creation of synergies through combining complementary modes in order to overcome their relative weak-
nesses, we can boost supply to speci"c target groups.  2001 Elsevier Science Ltd. All rights reserved.

Keywords: Housing policy; Housing provision; Market enabling strategy

1. Introduction

The need for scaling up housing production in developing countries through all possible means
is now accepted and acknowledged by all policy makers and commentators in this "eld (World
Bank, 1993; UNCHS, 1996a; Tipple, 1994; Okpala, 1992). This has been largely due to the
inadequacy of project-based approaches such as sites and services and settlement upgrading
programmes for low-income housing provision in these countries. It is estimated that in the 10 yr
period of 1972}1981, for example, the combined output of such project-based programmes was
only 10% of the actual requirement in developing countries (Burgess, 1992). In its e!orts to devise

* Corresponding author. Fax: #44-20-7815-7350.

E-mail addresses: moatazr@sbu.ac.uk (R. Keivani), edmundo.werna@unv.org (E. Werna).

0197-3975/01/$ - see front matter  2001 Elsevier Science Ltd. All rights reserved.
PII: S 0 1 9 7 - 3 9 7 5 ( 0 0 ) 0 0 0 2 4 - 2
192 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

appropriate policies for expanding low-income housing provision the most in#uential interna-
tional funding and policy organisation, i.e., the World Bank, and its allied writers have proposed
the adoption of &enabling strategies' for the development of the housing sector as a whole primarily
on the basis of expanding the formal private market mechanism (World Bank, 1993, 1988;
Malpezzi, 1994; Dowall, 1992; Pugh, 1995, 1994; La, Nier, Oman, & Reeve, 1987; Cohen, 1983;
Linn, 1983). This would be through speci"c policy reforms for adjusting supply and demand
conditions and institutional development of the housing markets, particularly housing "nance, in
order to make housing markets more e$cient and eradicate what are deemed to be, largely
government imposed, barriers to their expanded activity. Similarly, while UNCHS has moved on
to adopt &adequate shelter for all and sustainable human settlements' in its 1996 Habitat II
conference in Istanbul, enabling strategies for private markets, along similar policy reforms as that
of World Bank, still form the main plank of its shelter policies and recommendations (UNCHS,
1996a, b).
The &market enabling strategy' has been subject to criticism by a number of researchers as
inappropriate to the context of most developing countries and ignoring the need for expanding the
role of informal private land markets and developers (Baken & Van der Linden, 1993; Jones, 1996;
Jones & Ward, 1994a, 1995; Durand-Lasserve, 1987; Moavenzadeh, 1987). The informal land and
housing markets are seen by these authors as the most appropriate mode for expanding low-
income housing supply in developing countries. This is complemented by a diverse body of
researchers who have concentrated on developing more speci"c policies for supporting the role of
other sections of the informal sector, such as co-operative and community based initiatives and
subsistent landlords (Vakil, 1996; Me!ert, 1992; Rakodi, 1995; Kumar, 1996).
The main shortcoming of the current debate from the viewpoint of this paper is that in the
process of advocating their own or making a critique of the views of the opposing camp there has
been a tendency to overlook the plurality of provision which must be co-ordinated to the best e!ect
depending on speci"c conditions if one is to achieve the desired result in terms of expanded
provision. It is certainly true that some of the proponents of the &enabling strategy', particularly
UNCHS (1996a, c) have paid much greater attention to the diversity of modes and agents of
housing provision than the World Bank itself. Nevertheless, the private market is still identi"ed as
the &primary housing delivery mechanism' and forms the backbone of the &shelter for all' policy
adopted at the Habitat II conference (UNCHS, 1996a, Clause 63). Moreover, the recommendations
for action for enabling private markets to work are essentially the same as that proposed by the
World Bank which are primarily aimed at developing the formal private housing markets. In spite
of rhetoric to the contrary, neither the Bank nor UNCHS policy documents have to date made
co-ordination of pluralism the true focus of policy debate. Instead, pluralism is to be achieved
through developing the formal private market mechanism.
In our view this is a misleading approach. Formal private markets can and should be
supported. However, they need not necessarily be the focus of attention in all or even the
majority of cases in developing countries. Indeed, scaling up low-income housing provision,
and the development of the housing sector as a whole for that matter, require a more
comprehensive and pluralistic approach to enabling housing strategies. Whereby the di!erent
modes and agents of housing provision are identi"ed and co-ordinated in a comprehensively
integrated policy. The purpose of this paper, therefore, is to outline the main elements of such an
integrated strategy.
 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208 193

To this end, the paper will "rst present a brief analysis of the main modes and agents of housing
provision in developing countries highlighting the capacities and limitations of each mode in
di!erent socio-economic contexts. Following, the paper will consider the degree to which the
currently dominant &enabling strategy' conforms to an integrated plural housing strategy. In its
concluding section the paper focuses on co-ordination of pluralism by bringing together the
preceding discussions on modes of housing provision and the critique of the market enabling
strategy.
At this stage we would like to acknowledge that the broad review-based nature of our analysis
drawing on a wide range of references and countries makes it di$cult to provide in-depth analysis
of contextual di!erences between countries. Nevertheless, we feel that the analysis will provide an
adequate basis for examining the overall impact and potential of &market enabling strategy' within
a pluralist paradigm of study.

2. Modes of housing provision in developing countries

Housing provision in developing countries is classically divided into two main groups of
conventional/formal and unconventional/informal modes of provision. These essentially represent
a dichotomy between two opposing processes (Drakakis-Smith, 1981). The former group repres-
ents housing that is produced through the o$cial channels of recognised institutions, e.g. planning
authorities, banks and building and land development companies, and observing formal legal
practices, building standards and land use and subdivision regulations. In the main using semi-
industrial to industrial mode of production utilising wage labour, modern industrially produced
materials and being relatively capital intensive (Drakakis-Smith, 1981). The latter group, on the
other hand, represents those housing units which are usually produced outside o$cial channels
without o$cial development permits and do not conform to land use and subdivision regulations
(Drakakis-Smith, 1981; Baross & Van der Linden, 1990). This group in the main uses a traditional
mode of production which is relatively labour intensive, utilising a large input of self-help labour
and indigenous and traditional materials (Drakakis-Smith, 1981). However, a considerable number
of unconventional dwellings may also utilise modern industrial materials, semi-industrial methods
of production and wage labour or contract builders for at least some parts of their building
activities (Tipple & Wilkinson, 1992; Brumlik, 1992). As shown in Fig. 1 these main groups of

Fig. 1. A conceptual model of housing provision in developing countries.

194 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

provision, moreover, can be subdivided into further modes depending on the actors involved and
the social relations between them.

3. Conventional or formal modes of housing provision

The conventional or formal mode of housing provision mainly caters for the high-income groups
of the urban population in developing countries. This is mainly achieved through the private
market. In addition the state, either directly or indirectly, also provides housing units for some
sections of the low-income groups and essential government employees through this mode. To
these must be added co-operative housing provision which can be formed either through govern-
ment channels or independently.

4. Unconventional or informal modes of housing provision

Unconventional or informal modes of housing provision in developing countries primarily exist

due to the inability of low-income groups to purchase high quality and professionally designed and
constructed housing produced through the conventional sector (UNCHS, 1996c; Gilbert, 1990;
Drakakis-Smith, 1981; Turner, 1976). This situation itself is brought about by the inability of
peripheral capitalist development to absorb large sections of the urban population in formal sector
employment on the one hand or to provide adequate wages and salaries to large sections of those
that are employed by the sector on the other. As a result the unconventional mode of housing
provision has become a necessary part of urban growth and development in developing countries
in order to provide housing for the vast majority of urban poor who cannot gain housing through
the formal sector. Consequently, the state is forced to tolerate and accommodate a certain degree of
illegality and irregularity.
Table 1 provides a summary of the di!erent modes of housing provision in developing countries.

5. The market enabling strategy

The roots of the market enabling strategy should, in fact, be sought in the work of such
pioneering housing researchers and practitioners as John Turner, William Mangin and Charles
Abrams on self-help housing processes in informal settlements in the 1960s and the earlier work of
Jacob Crane in initiating government sponsored self help schemes in Puerto Rico in the 1930s and
1940s (Turner, 1972, 1976; Abrams, 1966; Drakakis-Smith, 1981 and Harris, 1998). The importance
of their work, particularly that of Turner, lay in identifying the self-build processes through which
millions of low-income households were able to provide their own housing units at their own pace
and according to their own priorities and requirements of their stage of life, on mainly squatted
land in informal settlements. Their arguments for accepting, channelling and strengthening these
processes as the main mechanism for low-income housing provision in developing countries
pushed the boundaries of housing debate. In time such processes were to be adapted in to the more
formal policy of aided self-help programmes which became the corner stone of World Bank, UN
and many national governments in developing countries during the 1970s and 1980s.
Table 1
Summary of the main modes of housing provision in developing countries

Mode of provision Main characteristics Appropriate setting Target group

Formal private
Speculative Domination by formal developers (large and small) Middle to high income countries Largely middle and high-
income groups
Formal "nance The existence of well functioning development and In certain positive
building industries economic conditions, i.e.,
high and rapid economic
growth and rising incomes
this mode can also target
the higher sectors of the low
income households
Industrial building technology
Compliance with planning regulations and building Sustained and rapid economic growth and rising
standards incomes
Developer-Landowner Mainly small scale joint ventures between developers Middle to high income countries Largely middle income
and landowners groups
Mixed formal}informal "nance A strong middle class
Industrial/semi industrial building technology Well established development and contracting
industry
Compliance with planning regulations and building
standards
Buoyant housing market
Ability to build to higher densities than the
original buildings
Individual owner-occupier Land owner commissioning building for his own use
technology
Mixed informal}formal "nance Middle to high income countries Largely middle income
groups
Semi-industrial building technology
Compliance with planning regulations and building Well established contracting industry In certain cases, i.e., public
R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

standards land allocation, can include

low-income groups

Public provision
Direct Large-scale projects "nanced and initiated by Largely inappropriate in developing countries Better suited as tied/service
governments as a form of low-income housing housing for essential public
employees
Largely built by private contractors
Formal "nance
Industrial building technology
Compliance with planning regulations and building
standards
195
 196
Table 1 (continued)

Mode of provision Main characteristics Appropriate setting Target group

Sites and services Project-based serviced land allocation Particularly suited to countries with large public Low to middle income
land resources groups
Large degree of self-build More limited but still applicable in other countries
Initiated by national governments as well as
international agencies
Complicated organisation and bureaucracy
Problems with replication and cost recovery
Mixture of formal and informal "nance
Traditional/semi-industrial building technology
Overall compliance with planning regulations and
building standards
Settlement upgrading Extending services and regularising existing low All developing countries Low income groups
income settlements
Initiated by national governments or international
agencies
Complicated organisation and bureaucracy
Problems with replication and cost recovery
Co-operative Formal organisation of workers, trades people and Largely undeveloped but appropriate in all Low to middle income
low-income households for the purpose of housing developing countries groups
provision
Co-operation and negotiation with public authorities, Requires government support for greater expansion
banks and contractors
Initiated by governments, political parties or more
organic
Mixture of formal and informal "nance
Semi-industrial building technology
Overall compliance with planning regulations and
R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

builiding standards
Public}nonpublic Exchanging cheap public land or other "nancial
patnership incentives for expansion of low cost housing
Can involve large scale private developers, private
individuals or the co-operatives
Mixture of formal and informal "nance
Industrial to semi-industrial building technology
Compliance with planning regulations and building
standards
Applicable in all countries, particularly those Low and middle income
with large public land resources and well established groups
development and contracting industries
Requires government support for greater
expansion
Requires government support for greater
expansion
Informal housing
Squatter housing Land invasions Countries with a large degree of communal Established low-income
and public land ownership groups
Largely self-built particularly at the initial stages Tolerant or weak governments
Incremental construction over several years
Lacking or inadequate services in most countries
Precarious locations
Manipulation by political parties and governments
Large degree of involvement of CBOs and NGOs
Informal "nance
Largely traditional and some semi-industrial building
technology
Low quality of housing in most countries
Largely lacking planned layout
Lack of compliance with planning regulations and
building standards
Informal Sub-division Domination by private developers, particularly Most developing countries, particularly where Established and higher
at initial stages squatter invasions are not tolerated sections of the low income
groups
Defacto security of tenure
Illegal sub-division of land
Planned layout but not in compliance with o$cial
regulations
Illegal and some-times precarious locations
Large degree of involvement of CBOs and NGOs
Informal "nance
Largely traditional and some semi-industrial building
technology
Incremental improvement in the quality of housing
Some selfbuild but a large degree of wage labour and
contracting than squatter housing
Informal rental housing Largely small-scale subsitence letting in low-income Appropriate for meeting the needs of the very Very low-income and
settlements or dilapidated central city tenements low-income and transitory groups in transitory groups
all countries
R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

In some cases there are larger special rental areas

developed by wealthy landlords or developers such
as bustees of Calcutta
Very low-quality of housing

In addition to references already cited in the main text of the paper, this table has been compiled from a more detailed review of literature which include Amis (1996),
Angel and Pornchokchai (1990), Baharoglu (1996), Burgess (1985), De Sampaio (1994), Desai (1996), Gilbert and Ward (1985), Igel and Srinivas (1996), Izeogu (1993), Jones
and Ward (1994b), McCutcheon (1979), Mitlin and Satterthwaite (1992), Nientied and Van der Linden (1990), Ogunshakin and Olayiwola (1992), Payne (1988), Ramirez
et al. (1992), Roy (1983), Saleem (1983), Shakur (1987), Soliman (1986), Steinberg (1990), Taschner (1992), Van Lindert (1992), Ward (1990), Ward and Chant (1987).
197
198 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

There was, however, a crucial di!erence between the self-help policies advocated by writers such
as Turner and the aided self-help policies implemented by international agencies and national
governments. The former envisaged dweller control through participatory policies for supporting
and enabling the informal self help processes by increasing the direct access of informal low-income
households to "nancial, material and technical resources. The latter, on the other hand, attempted
to formalise and regulate the process largely through internationally "nanced government control-
led aided self-help projects. It was not, therefore, surprising that the resultant bureaucratic
framework of the aided self-help programmes with their huge overhead costs, long delays and
duration and involvement of a multitude of international, national and local public and formal
private actors failed to capture the dynamism and scope of the informal processes observed in the
work of the earlier advocates of informal self-help housing (Burgess, 1992, 1985; Soliman, 1986;
Jones & Ward, 1994a).
The in#uence of self-help on the market enabling strategy stems from its e!ort to replace
conventional public housing programmes of the time, i.e., full publicly "nanced housing production
and subsidised renting, by enabling private individual self-builders to help themselves. The
di!erence, however, is that whereas the early conception of self-help envisaged an enabled and
expanded informal self-build housing sector the current World Bank conception primarily envis-
ages an enabled and expanded formal land housing market.
In this regard the World Bank (1993) has formulated certain policy recommendations which aim
at the reorientation of government activity away from direct housing provision and regulation of
the private housing markets to one of enabling housing markets to function more e$ciently. These
are:

E developing property rights,

E developing mortgage "nance including lending and borrowing at positive interest rates,
E rationalising subsidies,
E opening up urban land for residential development through provision of infrastructure,
E reforming building and planning regulations concerning land and housing development for
expanding market activity,
E organising the building industry by eliminating regulatory barriers,
E developing an institutional framework for managing the housing sector.

We have shown the private market bias of these recommendation elsewhere in greater detail
(Keivani & Werna, forthcoming). Relevant critical studies also include Jones and Ward (1994a,
1995), Jones (1996) and Baken and Van der Linden (1993). It su$ces to state here that these
recommendations are primarily designed to create the institutional capacity and an open market
environment for expanding formal private activity.
In a defence of World Bank policy and private housing markets Malpezzi (1994) points to
tremendous over-regulations in many housing markets of developing countries which impede
market operation and drive up costs. The aim of the enabling strategy he explains is to increase the
practical e$ciency of private markets towards producing housing for the majority of the popula-
tion than their present situation. E$cient markets will separate incremental consumption from
incremental payment, `so that households can consume the "nal desired bundle, or closer to it,
soonera (Malpezzi, 1994, p. 459) and pay for it incrementally through mortgage repayments over
 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208 199

many years. Intermediary "nancial systems and well developed rental housing markets, he
continues, aid the process of housing capital formation by separating consumption decisions from
current income and `more dependent on long-run (permanent) income, and log run desired
consumptiona (Malpezzi, 1994). Hence the emphasis on deregulation and institutional develop-
ment for increasing formal private market activity.
We do agree that formal private markets can and should be more e$cient to expand their
housing production to include larger numbers of the lower and middle income populations.
However, the degree to which the scenario of an e$cient housing market depicted by Malpezzi is
actually viable in most developing countries in at least the short to medium terms remains highly
debatable and one might even say unlikely. This is evident in the failure of IMF and World Bank
sponsored short-term macro-economic stabilisation or structural adjustment programmes of
3}5 yr to lead to expanded private sector investment and sustainable economic growth in most
developing countries, which have undertaken such programmes, in the medium terms (Pugh, 1995,
1994).
It is precisely this gap between the objective conditions of developing countries and World Bank
policy proposals that forms a main plank of criticism in Jones and Ward's (1994a, 1995) critique of
the Bank's New Urban Management Programme and urban policy in general. They identify
certain positive aspects to the NUMP and urban policy, such as the shift from project-based
approach to a more comprehensive and enabling role by public administrations, greater emphasis
on e$ciency and transparency in government, decentralisation, local empowerment and the link
between urban economy and the national economy. Nevertheless, they have serious misgivings
about the ability to either e!ectively implement some of the institutional reform of NUMP
recommendations due to political compromises in many developing countries or the ability of
low-income households and the informal land markets to bene"t from much of the proposed
programme even if implemented. They argue that the market-led nature of the programme
seriously limits the `scope within NUMP for the state to intervene in order to create the precise
conditions which might allow policies advocated under NUMP to succeed. Without this structure,
therefore, the unquestioning application of the NUMP proposals are likely to lead to a range of
varied outcomes that are di$cult to predict and not necessarily of a positive naturea (Jones
& Ward, 1994a, pp. 46}47). They, therefore, conclude by asserting that an important tool for
overcoming this shortcoming is for the state to maintain a mixture of control and management
over the land market rather than solely relying on management or totally abrogating the
responsibility (Jones & Ward, 1994a, 1997). It is only in this way, they argue, that the state can
`in#uence the land market signi"cantly enough to resolve the land problem &#ashpoints' in LDC
citiesa (Jones & Ward, 1994a, b, p. 47).
Jones and Ward on the whole regard the Bank's urban policy in the 1990s as a clear shift to the
mainstream Bank ideology as part of an attempt by the Bank to bring its rather &maverick' urban
department more in line with its mainstream neoliberal free market philosophy. In a reply to this
critique and earlier writings by Jones and Ward (1997), Pugh (1997) argues that Jones and Ward
have been selective in their use of data and ignored the post 1986 developments in Bank thinking.
He argues that while in the early 1980s Bank's urban policy could be described as primarily
neoliberal it had evolved under the in#uence of institutional economics and liberalist new political
economy to have a much wider and inclusive conception of enabling with a reorientation of
public}private roles in the most e$cient way. He then points to the Bank's 7-point housing policy
200 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

recommendations to further argue that far from the state withdrawing it would have expanded
roles in targeted subsidies, the creation of appropriate policies, and institutional reforms in such
areas as housing "nance, land policy development, building regulations and the environment.
Pugh, moreover, extensively uses UNCHS urban and housing policy documents since 1987 to
show that the post 1990 World Bank conception of enabling as having a strong local community,
CBO, NGO and informal input.
The proposed increased involvement of the state along the 7-point recommendations outlined,
however, does not negate the neoliberal philosophy underlying the Bank's policy agenda. If any
thing it reinforces this perception since they are all primarily designed to create the institutional
capacity for expanded formal private market activity. Moreover, we are of the view that it is
a mistake to equate UNCHS and World Bank policies and ideology on the subject. While their
policies overlap to a large degree with respect to enabling the formal private markets the UNCHS,
as Pugh's citations show, has paid much greater attention to making the strategy more inclusive by
including particularly the community and co-operative sectors. The Bank pays scant attention in
this regard.
Following similar concerns the 1996c (p. 338) UNCHS report on human settlements states:
As the title of the most recent World Bank policy statement makes clear, the focus is on &enabling
markets to work rather than on enabling poor people to gain access to housing and land
markets'.
As a result, the Habitat II agenda explicitly takes on board the low-income communities
themselves, community groups, NGOs and women as main actors who should be supported
through the enabling strategy as the private market (UNCHS, 1996a). Nevertheless, while the
UNCHS has moved in the right direction the focus of the policy has remained enabling private
housing markets to work as the primary housing delivery mechanism along the same lines as the
World Bank policy recommendations. Accordingly, the Habitat II agenda pays scant attention to
the role and requirements of the informal private markets in their own right.

6. Beyond enabling private markets

As shown in Table 1 the diversity of modes of housing provision in developing countries and the
range of actors involved indicates that the process involves an intricate and complex network of
relationships between various agents and the state. In designing policies for the expanded provision
of low-income housing provision in developing countries, therefore, it is important to take account
of the social and political context and dimensions of land and housing supply (Jones, 1996; Baken
& Van der Linden, 1993). For this reason it is important to identify and take in to consideration the
entire structures of provision and the interactions of the relevant interest groups and agents
involved in the various sub-markets and forms of housing provision. This is as opposed to solely
relying on adjustments to supply and demand which is the basis of the recommendations outlined
by the World Bank and its allied writers. Such adjustments are unable to take account of the
complex relationships between the di!erent actors and interest groups which are played out in
cultural, social and political spheres which are country and even city speci"c and which directly
in#uence the outcome of such policies.
 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208 201

The relaxation of land use regulations and increased government provision of basic infrastruc-
tural services, for example, can be positive actions which increase both formal and informal private
sector access to suitable residential land and help in reducing the price of housing units in
developing countries. Indeed, critics of World Bank &enabling strategy' have themselves called for
reducing size and standard regulations as a means of increasing security for informal market
activity (Baken & Van der Linden, 1993).
However, due to the existence of landed interest groups and their close interaction with public
o$cials in many developing countries the e!ects of withdrawal of state from land ownership and
control and deregulation of the land market in terms of private ownership and exchange remains
far more unclear. Indeed, as many authors have pointed out, the problem of excessive land
speculation by landowners, including building "rms and developers, in unregulated land markets
poses a serious challenge to the e$ciency of the private market mechanism. Baken and Van der
Linden (1993) have argued, for example, that there is a need to distinguish between the demands
generated by the use value and investment value of land since increased deregulation and more
freedom for the market cannot prevent excessive land price increases caused by investment
demand.
This is particularly the case in developing countries where it is more likely that conditions
conducive to increased investment demand in land such as the lack of alternative investment
avenues and high in#ation rates exist (Baken & Van der Linden, 1993). Moreover, despite
protestations by advocates of the formal private markets (Malpezzi, 1994; Walters, 1983) that
speculation is a rational response to scarcity of serviced land which would be eradicated in its
absence other writers have noted the tendency of formal private "rms to take the easiest route for
pro"t maximisation through land speculation and land development gains even in the UK which
has undoubtedly negligible scarcity of serviced land and a much more developed housing and real
estate market (Duncan, 1986; Ball, 1983).
An often quoted example of the success of deregulation and increased capacity of housing
markets has been the experience of Bangkok between 1980 and the mid-1990s (Dowall, 1989, 1992).
As noted by Yap (1996), however, the &Bangkok phenomenon' occurred during a relatively long
period of one and half decades of economic growth and increasing e!ective demands of the middle-
and low-income populations. In the words of Baken and Van der Linden (1993) it is quite likely
that in such favourable economic and demand conditions a similar increase in private market
production capacity would have occurred even in a more regulated market.
Overall the above debates support the argument that imperfections and ine$ciencies are
inherent to urban land and housing markets rather than being necessarily related to government
regulations. Such ine$ciencies would be particularly damaging for increased low-income housing
provision by the formal private sector since it would require lowering the cost of supply. A major
factor in this regard would be increased access to cheaper factors of production, such as land and
"nance, by the formal private "rms. Consequently, if deregulation of land and "nance leads to
increased speculation and monopoly behaviour on land or very high interest rates as in the case of

 It is pertinent to note that on the basis of experiences in Ahmadabad, India, and Mexico both Baken and Van der
Linden (1993) and Jones (1996) seriously question the extent of costs attributed to compliance with o$cial regulations
and standards in formal private market activity.
202 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

Chile between 1974 and 1982 it cannot be conducive to increased provision of low-income
housing by formal private "rms. In this regard Duran and Soza (1987) note that in Chile
during 1974}1982 the government was emphasising the role of private supply to cover the
whole quantitative and qualitative range of demand and left price regulations, credit and
interest rate control to the market. Therefore, the private sector was recognised as the only
agent for supplying the housing demand of the middle-high income population, while the urban
poor were basically excluded. However, even many of the higher income social groups
could not a!ord the price of houses on o!er, which is evident from the fact that many houses
remained unsold*e.g. 15,000 new units in Greater Santiago alone in April 1983 (Duran & Soza,
1987). At the same time as a result of "nancial deregulation the "nancial costs of an average
privately constructed house in the construction phase alone was 31.4% of the sale price and
a purchaser would have to pay a real interest rate of about 269.68% over twelve years (Duran
& Soza, 1987).
With the direct example of the Swedish housing market the 1996 UNCHS (Habitat) Global
Report on Human Settlements has acknowledged that enabling policies for increased and cheaper
housing provision through the formal private market does not necessarily mean increased deregu-
lation (UNCHS, 1996c). Rather, it may even mean increased regulation and intervention by the
state even to the extent of laying down what is produced by the private market if it leads to the
provision of cheaper and plentiful factors of production (UNCHS, 1996c). This is also exactly the
crux of the argument put forward by Jones and Ward (1994a, 1995, 1997) in their critique and
replies to World Bank and Pugh.
Strassmann (1994) reaches a similar conclusion as to the limits of an under-regulated market on
the basis of the situation of the land market in Manila where there is minimal government
regulations on land and housing markets, relaxed standards and regulations for low-cost housing,
an e$cient building industry in technological and institutional terms and an active real estate
market. Yet, large amounts of residential land are kept empty within the city for speculative
purposes by private land owners due to almost negligible taxation on vacant land which accounts
for only 0.2% of the reasonable market value of land. Consequently, half of the households could
not a!ord even the cheapest units built by the unsubsidised formal private sector due to high land
and housing prices. Therefore, the degree to which land and housing markets are deregulated or
supervised is entirely dependent on identifying and examining the structures of provision and
relationship of agents in any particular context.
Moreover, there is deep rooted involvement of politicians, political parties and local o$cials in
the illegal activities of informal settlements in developing countries. These include sanctioning
land invasions and protecting informal subdivisions. Such activities indicate that the
implementation of policies and application of regulations in the "eld of land and housing are
intrinsically tied to, and a result of, interplay between di!erent political and economic interest
groups which is often manifested in the form of clientelism and political mediation (Baken & Van
der Linden, 1993; Jones & Ward, 1994a, 1995). A similar relationship can also be identi"ed between
ine$cient and excessive speculative activities of formal private landowners and politicians. This is
exempli"ed by the case of Manila, Philippines, where e!orts for raising idle land taxes and related
land reforms were thwarted by powerful formal private sector land owners who were supported by
some congressional leaders who were themselves large property and land owners (Strassmann,
1994).
 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208 203

7. Conclusion: the shift to a pluralist approach

The preceding discussions lead us to the conclusion that rather than utilising all available means
for expanding housing provision in developing countries, the current conception of &enabling
strategy' is primarily a policy for the development of formal private markets to the implicit or
explicit exclusion of other policies and modes of provision which were highlighted in Table 1. It is
the contention of this paper that the over-reliance on formal private markets which is apparent in
the Bank's strategy will lead to the sti#ing of initiative in the development of new policies and a lack
of more appropriate application and further development of the other existing policies and modes
of provision.
We would, therefore, advocate a more comprehensive and pluralistic approach to enabling
housing strategies. This would combine adjustments to overall supply and demand conditions of
the market with the identi"cation and inclusion of all the related modes and agents of provision in
appropriate policies aimed at expanded housing provision by the identi"ed modes and agents to
carefully selected target groups which form the most suitable sub-market for each mode. Such an
approach would consider the social, cultural and political factors which govern and determine the
activities of agents in each mode in order to co-ordinate and enhance the positive aspects of each
mode and counteract their negative tendencies and actions. Moreover, as each mode of provision
has its own advantages which suit the speci"c requirements of certain sections of urban population
it is important to identify the target group of the expanded provision of each mode based on
realistic analysis of the output capacities of the modes and requirements and e!ective demand of
the groups concerned.
Consequently, and contrary to the current &enabling strategy', such an integrated approach may
lead, for example, to increasing public sector involvement in, and regulation of, land and housing
markets depending on the speci"c conditions of countries concerned. Similarly, it may combine
several di!erent modes such as project based sites and services programmes, co-operative/CBO
housing, formal and informal contractors and developers and public land allocation in order to
overcome their relative weaknesses and boost appropriately targeted housing provision.
On the other hand in some middle to high income countries, particularly with sustained and
rapid economic growth, rising incomes and well established contracting and development indus-
tries, di!erent modes of formal private housing markets can play a major role in housing provision
for the middle and upper tiers of the low-income groups. In addition to providing institutional
support for the housing market, particularly housing/building "nance and infrastructure provision,
the low-income output of such modes may be enhanced through the creation of public}private
partnership schemes.
Partnership in our view is an important mode of provision which could tie many di!erent modes
in di!erent socio-economic context to create synergies for e$cient and a!ordable housing provis-
ion. As a recent paper by Jones and Pisa (2000) notes, partnerships may also be seen to bridge the
ideological divide between the advocates of the free market system and those of state intervention
by allowing the participation of both as a well as community actors. A common form of
partnership relates to public}private joint venture schemes. In this mode of provision public
authorities usually provide cheap suitable land and tax incentives and private "rms provide
"nance and build housing units on these land in exchange for being able to sell an agreed part
of the projects on the open market and o!er the rest to low-income households at agreed prices.
204 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

Such schemes have been tried in several developing countries including Malaysia, India and Iran
(Billand, 1993; Moatazed-Keivani, 1993; Drakakis-Smith, 1981). Depending on the context, the
design criteria of at least the low-income section of the project is negotiated with, or determined by,
the government side (Moatazed-Keivani, 1993).
Depending on the socio-economic and land ownership structure of the cities concerned other
variations of public}private partnerships can emerge. In west Africa and Mexico an important
third actor in such schemes are the customary land owners (Jones & Pisa, 2000). Indeed, as the
ejido-private partnership schemes in Mexico show in the early stages of the programme the
government largely played a facilitative role by providing the legal framework for such partner-
ships to occur through the provision of legal titles to such customary land communities willing to
participate (Jones & Pisa, 2000). Up to early 1998, however, the ejido-private partnership did not
have any clear low-income housing mandate or intention. Indeed, Jones and Pisa (2000) note that
of the 12 participating ejidos all except one were principally intended for providing land for middle
income residential and luxury leisure developments.
Another type of partnership can occur between the public and co-operative mode of housing
provision. In this mode the public sector provides land free or under market price and members of
the co-operative "nance and build their own housing units. This form of partnership was
implemented relatively successfully in Iran after the 1979 revolution. In 1985, for example, over 6%
of total urban housing investment in the country was provided under this mode. Again for such
modes to be e!ective it is crucial that the government has both the political will and physical
resources to implement such programme. One should note that even on its own the co-operative
mode of provision can be an e!ective form of low-income housing provision. By de"nition
co-operatives allow groups of people to organise themselves and pool their resources and e!orts
into a formal organisation which can then negotiate on behalf of its members for acquiring
land from the government or the private market, applying for and receiving credit or
mortgage loans from government and formal sector institutions, receive building materials and
commission contractors for building the housing units (Vakil, 1996; Okpala, 1992). In addition to
Iran co-operatives have proved to be relatively successful in a number of countries including India
and Turkey (Okpala, 1992). In 1984, eighteen Apex co-operative Housing Societies in India
covered some 34,000 housing co-operatives and by 1982 had provided loans for the completion of
480,000 dwellings (Okpala, 1992). In Turkey, on the other hand, the contribution of housing
co-operatives to the total housing production during 1978}1980 was more than 13% (Okpala,
1992).
The experience in Iran and elsewhere suggests that as far as low-income housing provision is
concerned the success of such partnerships is primarily dependent on the political will and physical
capacity of governments to pursue the policy in terms of their ability to build up large land reserves.
In Iran, for example, extensive public}private as well as public}co-operative partnership schemes
only were possible due to the large public land reserves which were built up under the Urban Land

 The ejido is a form of land tenure enshrined in Article 27 of the Mexican constitution (1917) which established that
certain peasants (ejidatarios) held rights to land for agrarian purposes in perpetuity which could not be sold, rented or
mortgaged (Jones & Ward, 1998). By late 1990 this form of land ownership accounted for 55% of the national land area
and was held by 3.5 million ejidatarios in 30,000 communities (Jones & Pisa, 2000).
 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208 205

Act after the 1979 revolution which introduced a ceiling limit on private ownership of land in urban
areas. To this must be added the political will of the post-revolution government to implement the
Act and follow such programmes through. Lack of political will and undue interference has been
noted as the main reasons for failure of innovative projects in both India and Pakistan (Jones
& Pisa, 2000).
In addition to the political will and physical and institutional capacity of the government,
however, the success of such schemes is also dependent on satisfying the requirements of the other
stakeholders. In the case of private actors the pro"t motive is obviously the most crucial factor. In
Iran, for example, until 1990 the public}private schemes had not been very successful due to the
bad locations of the land plots o!ered by the government which created problems of sale of the
units on the open market (Moatazed-Keivani, 1993). Similarly, the ejido-private partnership
programme in Mexico has thus far proved to be not very successful. Jones and Pisa (2000) point out
that by early 1998 only eight out of a total of 1122 ejidos surrounding Mexico largest cities had
established partnership schemes in a total of 12 projects. Reasons for this included bureaucratic
inadequacies and delays in granting land titles, shortage of capital in the ejido sector and
domination of the schemes by the private sector to the exclusion of ejidatarios leading to loss of
control over their land and the project without su$cient "nancial remuneration. As a result the
Mexican government has taken steps to overcome these problems with fast track legal title
provision and proposals for new lines of "nance for ejido development through a national fund or
state government. In the event of provision of public "nance the government would become
a formal partner in the project until such time the ejido has repaid the capital or decides to donate
serviced land (Jones & Pisa, 2000). Another important initiative has been proposals for changing
the organisational structure of ejido-private partnerships by recommending the formation of trusts
to act as intermediaries between the partners in an attempt to redress the power imbalance between
ejido and private partners (Jones & Pisa, 2000). As Jones and Pisa (2000) note, however, while these
measures have been undoubtedly positive it is too early to judge their e!ect in overcoming
problems identi"ed with the earlier partnerships. It may be that the government will have to take
further measures to make the process more transparent and inclusive of ejido demands to urban
agencies as well as higher e$ciency and "nancial viability for both ejidatarios and private
developers.
In conjunction with Table 1 the above discussion on partnerships and co-operative modes of
housing provision serve to illustrate the rich potential that exist in terms of modes of housing
provision in developing countries. As noted in the case of partnerships, problems always exist. They
are, however, not insurmountable. The challenge for governments is to muster the political will and
for international and national policy makers, practitioners and academics to devise innovative
policies for realising the potential without preconceived ideological biases and preferences.
Depending on the social, economic, political, legal and institutional conditions and capacities of
countries concerned there are di!erent opportunities for co-ordination and creation of synergies
through complementary combinations. The task, however, is by no means easy nor have we
provided the ultimate paper on the issue. Rather we have only provided the general outline of
a strategy which must be developed and re"ned through greater research on identifying and
examining the potential, means and problems of co-ordination between di!erent modes of housing
provision in speci"c contexts in developing countries. This paper ends, therefore, by calling for
further research in this area.
206 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

Acknowledgements

The authors gratefully acknowledge the comments of reviewers of the Jorge Hardoy Memorial
Prize and Professor Charles Choguill on an earlier version of the paper. We remain, however, solely
responsible for any errors or misconceptions.

References

Abrams, C. (1966). Housing in the modern world. London: Faber and Faber.
Amis, P. (1996). Long-run trends in Nairobi's informal housing market. Third World Planning Review, 18(3), 271}285.
Angel, S., & Pornchokchai, S. (1990). The informal land subdivision markets in Bangkok. In P. Baross, & J. Van der
Linden, The transformation of land supply systems in Third World cities (pp. 169}192). Aldershot: Avebury.
Baharoglu, D. (1996). Housing supply under di!erent economic development strategies and the forms of experience of
Turkey. Habitat International, 20(1), 43}60.
Baken, R. J., & Van der Linden, J. (1993). Getting the incentives right: Banking on the formal private sector. Third World
Planning Review, 15(1), 1}22.
Ball, M. (1983). Housing policy and economic power: the political economy of owner occupation. London: Methuen.
Billand, C. J. (1993). Private sector participation in land development. Habitat International, 17(2), 53}62.
Brumlik, A. (1992). Institutional programme in Caracas. In K. Mathey, Beyond self-help housing (pp. 303}310). London:
Mansell Publishing.
Burgess, R. (1992). Helping some to help themselves: Third world housing policies and development strategies. In
K. Mathey, Beyond self-help housing (pp. 75}94). London: Mansell Publishing.
Burgess, R. (1985). The limits of state self-help housing programmes. Development Planning Unit Research Collection,
UCL, unpublished paper.
Cohen, M. (1983). The challenge of replicability. In World Bank Reprint Series No. 287. Washington, DC: World Bank.
De Sampaio, M. R. A. (1994). Community organisation, housing improvements and income generation: A case study of
&Favelas' in Sao Paulo. Habitat International, 18(4), 81}97.
Desai, V. (1996). Access to power and participation. Third World Planning Review, 18(2), 217}242.
Dowall, D. E. (1992). A second look at the Bangkok land and housing market. Urban Studies, 29(1), 25}37.
Dowall, D. E. (1989). Bangkok: A pro"le of an e$ciently performing housing market. Urban Studies, 26(3), 327}339.
Drakakis-Smith, D. (1981). Housing and the urban development process. London: Croom Helm.
Duncan, S. (1986). House building, pro"ts and social e$ciency in Sweden and Britain. Housing Studies, 1(1), 11}33.
Duran, H., & Soza, S. (1987). Housing: diagnosis and policy recommendation in regional employment program for Latin
America and the Caribbean (PRELAC). In Search of equity: Planning for the satisfaction of basic needs in Latin America
(pp. 71}111). Aldershot: Aveburry.
Durand-Lasserve, A. (1987). Land and housing in Third World cities. CITIES, The International Quarterly on Urban Policy,
4(4), 325}338.
Gilbert, A., & Ward, P. M. (1985). Housing, the state and the poor: Policy and practice in three Latin American cities.
Cambridge: Cambridge University Press.
Gilbert, A. (1990). The costs and bene"ts of illegality and irregularity in the supply of land. In P. Baross, & J. Van der
Linden, The transformation of land supply systems in Third World cities (pp. 17}36). Aldershot: Avebury.
Harris, R. (1998). The silence of the experts: `Aided Self-help Housinga, 1939}1954. Habitat International, 22(2),
165}189.
Igel, B., & Srinivas, H. (1996). The co-option of low-income borrowers by informal credit suppliers. Third World Planning
Review, 18(3), 287}305.
Izeogu, C. V. (1993). Public policy and a!ordable housing for the urban poor in Nigeria. Habitat International, 17(2),
21}38.
Jones, G. A. (1996). The di!erence between truth and adequacy: (Re)Joining Baken, Van der Linden and Malpezzi. Third
World Planning Review, 18(2), 243}256.
 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208 207

Jones, G. A., & Pisa, R. A. (2000). Public}private partnerships for urban land development in Mexico: A victory for hope
versus expectation. Habitat International, 24(1), 1}18.
Jones, G. A., & Ward, P. M. (1998). Privatising the commons: Reforming the ejido and urban development in Mexico.
International Journal of Urban and Regional Research, 22(1), 76}93.
Jones, G. A., & Ward, P. M. (1997). `Hell hath no fury like an academic scorneda: A reply to Pugh (with apologies to
Congreve and women). Environment and Planning, A, 29, 169}178.
Jones, G. A., & Ward, P. M. (1995). The blind men and the elephant: A critic's reply. Habitat International, 19(1),
61}72.
Jones, G.A., & Ward, P.M. (1994a). The World Bank's &New' urban management programme: Paradigm shift or policy
continuity? Habitat International 18(3), 35}51.
Jones, G., & Ward, P. M. (1994b). Introduction: From Fitzwilliam workshop to work on methodology. In G. Jones, &
P. M. Ward, Methodology for land and housing market analysis (pp. 1}7). London: UCL Press.
Keivani, R., & Werna, E. (forthcoming). Modes of housing provision in developing countries and the scope for increased
private market activity. Progress in Planning, forthcoming.
Kumar, S. (1996). Landlordism in Third World urban low-income settlements: A case for further research. Urban Studies,
33(4}5), 753}782.
Lanier, R., Oman, C. A., & Reeve, S. (1987). Encouraging private initiative. Washington, DC: USAID.
Linn, J. F. (1983). Cities in the developing world. Oxford: Oxford University Press.
Malpezzi, S. (1994). Getting the incentives right: A reply to Robert-Jan Baken and Jan Van der Linden. Third World
Planning Review, 16(4), 451}466.
McCutcheon, R. (1979). Modern construction technology in low income housing policy: The case of industrialised
building, Ph.D. thesis, Sussex University, unpublished.
Me!ert, K. (1992). Co-operative self-help housing: The case of El Molino in Mexico city. In K. Mathey, Beyond self-help
housing (pp. 323}340). London: Mansell Publishing.
Mitlin, D., & Satterthwaite, D. (1992). Scaling-up in urban areas. In M. Edwards, & D. Hulme, Making a diwerence: NGOs
and development in a changing world (pp. 169}179). London: Earthscan Publications.
Moatazed-Keivani, R. (1993). The role of formal private building "rms in low income housing provision in developing
countries: The case of Tehran, Ph.D. thesis, Development Planning Unit, University College London, unpublished.
Moavenzadeh, F. (1987). The construction industry. In L. Rodwin, Shelter settlement and development (pp. 74}109).
Boston: Allan and Unwin.
Nientied, P., & Van der Linden, J. (1990). The role of the government in the supply of legal and illegal land in Karachi. In
P. Baross, & J. Van der Linden, The transformation of land supply systems in Third World cities (pp. 225}242). Aldershot:
Avebury.
Ogunshakin, L., & Olayiwola, L. (1992). The collapse of o$cial housing policy in Nigeria. Habitat International, 16(1),
41}53.
Okpala, D. C. I. (1992). Housing production systems and technologies in developing countries: A review of the
experiences and possible future trends/prospects. Habitat International, 16(3), 9}32.
Payne, G. (1988). Unregulated urban housing submarkets in the Third World: A review of the literature. Oxford: Oxford
Polytechnic.
Pugh, C. (1997). International urban and housing policy: A review of the &Cambridge studies', 1989}95. Environment and
Planning A, 29, 149}167.
Pugh, C. (1995). Urbanization in developing countries: An overview of the economic and policy issues in the 1990s. Cities,
12(6), 381}398.
Pugh, C. (1994). Housing policy development in developing countries: The world bank and internationalization, 1972}93.
Cities, 11(3), 159}180.
Rakodi, C. (1995). Rental tenure in the cities of developing countries. Urban Studies, 32(4}5), 791}811.
Ramirez, R., Fiori, J., Harms, H., & Mathey, K. (1992). The commodi"cation of self-help housing and state intervention:
Household experiences in the Barrios of Caracas. In K. Mathey, Beyond self-help housing (pp. 95}144). London:
Mansell Publishing.
Roy, D. K. (1983). The supply of land for the slums of Calcutta. In S. Angel, R. W. Archer, S. Tanphiphat, & E. A. Weglin,
Land for housing the poor (pp. 98}119). Singapore: Select Books.
208 R. Keivani, E. Werna / Habitat International 25 (2001) 191}208

Saleem, S. (1983). Land management in the katchi abadis of Karachi. In S. Angel, R. W. Archer, S. Tanphiphat, & E. A.
Weglin, Land for housing the poor (pp. 144}155). Singapore: Select Books.
Shakur, M. T. (1987). Approaches towards housing low income communities in the Third World: A literature review.
University of Liverpool, Working Paper No. 30.
Soliman, A. (1986). Reshaping current housing policies for the urban poor in Egypt. University of Liverpool, Working
Paper, No. 29.
Steinberg, F. (1990). Cairo: informal land development and the challenge for the future. In P. Baross, & J. Van der Linden,
The transformation of land supply systems in Third World cities (pp. 111}132). Aldershot: Avebury.
Strassmann, W. P. (1994). Oversimpli"cation in housing analysis, with reference to land markets and mobility. Cities,
11(6), 377}383.
Taschner, S. P. (1992). Changes in self-help housing production in Sao Paulo. In K. Mathey, Beyond self-help housing
(pp. 145}157). London: Mansell Publishing.
Tipple, G., & Wilkinson, N. (1992). Self-help transformation of government built #ats: the case of Helwan. In K. Mathey,
Egypt, Beyond self-help housing (pp. 283}302). London: Mansell Publishing.
Tipple, G. A. (1994). A matter of interface: the need for a shift in targeting housing intervention. Habitat International,
18(4), 1}15.
Turner, J. F. C. (1976). Housing by people. London: Marion Boyars Publishers.
Turner, J. F. C. (1972). In J. F. C. Turner, & R. Fichter, Housing as a verb, freedom to build * dweller control of the housing
process. NewYork: McMillan.
UNCHS (Habitat). (1996a). The Istanbul Declaration and Habitat II Agenda. Istanbul.
UNCHS (Habitat). (1996b). The future of human settlements: Good policy can make a diwerence. Istanbul, Turkey,
A/CONF.165/7.
UNCHS (Habitat). (1996c). An urbanizing world: global report on human settlements 1996. Oxford: Oxford University
Press.
Vakil, A. C. (1996). Understanding housing CBOs. Third World Planning Review, 18(3), 325}347.
Van Lindert, P. (1992). Social mobility as a vehicle for housing advancement? Some evidence from Lap Paz, Bolivia. In
K. Mathey, Beyond self-help housing (pp. 157}180). London: Mansell Publishing.
Walters, A. (1983). The value of land. In H. Dunkerley, Urban land policy: Issues and opportunities (pp. 40}62). Oxford:
Oxford University Press.
Ward, P. (1990). The politics and costs of illegal land development for self-help housing in Mexico City. In P. Baross, &
J. Van der Linden, The transformation of land supply systems in Third World cities (pp. 133}168). Aldershot: Avebury.
Ward, P., & Chant, S. (1987). Community leadership and self help housing. Progress in Planning, 27 (Part 2).
World Bank (1993). Housing: enabling markets to work. Washington, DC: World Bank.
World Bank (1988). World development report. New York: Oxford University Press.
Yap, K. S. (1996). Low-income housing in a rapidly expanding urban economy: Bangkok 1985}1994. Third World
Planning Review, 18(3), 307}323.