The Missing Foundations of Housing Finance: Incomplete Markets, Fragmented Policies and Emerging Solutions in Guatemala
AbstractIn Guatemala there are substantial and growing imbalances in the housing market; at the same time, financial markets remain shallow and underdeveloped. The analytical framework applied in this paper starts by identifying the types of market failures responsible for the underdevelopment of the housing finance system. The working hypothesis is that there is a correlation between the nature and scope of market failures, and the kind of public interventions actually implemented. Evidence collected points to a rejection of the policy adequacy hypothesis. Nevertheless, it is encouraging that solutions have begun to emerge as economic agents learn to overcome market failures; these experiences are reinterpreted as “natural experiments” showing what could happen if market failures could be fixed at a large scale through appropriate government policy. Building on this framework, the paper proposes guidelines for the design and implementation of housing finance policy in Guatemala.
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Bibliographic InfoPaper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4750.
Date of creation: Sep 2011
Date of revision:
Find related papers by JEL classification:
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
- R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Government Policy; Regulatory Policy
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
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