The Institutional Trap in the Czech Rental Sector: Nested Circuits of Power, Space, and Inequality

Abstract

An “institutional trap”is a sequence of misplaced regulatory steps that have increased the costs of institutional transformation to the level at which inefficient structures can remain stable, despite changes in the external economic environment. This is a common occurrence in Central and Eastern Europe because of the path-dependent nature of the postsocialist transformation process. This article examines the organizational and territorial transformations of housing, utility, and social welfare policies in the Czech Republic through a comparative analysis of institutional power geometries and household expenditures at the national scale. The results indicate that the Czech Republic is facing an institutional trap in the restructuring of its rent control and social welfare policies. The trap operates within three nested circuits: the power geometries of postsocialist reforms, the geographies of housing prices and social welfare, and the consumption patterns of disadvantaged households. The lock-in created by the trap can be resolved only through carefully targeted and synchronized social support and housing investment programs, parallel to rent liberalization. This article argues for comprehensive, rather than partial, solutions to the institutional trap and emphasizes the need for a deeper understanding of the relationships among institutions, space, and inequality.