The role of institutions in social housing provision: salutary lessons from the South

Abstract

This paper examines third sector social housing in early post-apartheid South Africa, hence offering important new insights into how institutions in emerging economies shape the implementation and impacts of this approach. Based on qualitative research methods, the paper finds that under conditions of weak formal governance, nascent industry capacity and disaffected communities, third sector social housing resulted in serious project failures and squandered public resources. The study employs an institutional lens to understand how formal and informal institutions shaped the implementation of projects and how key stakeholders acted upon conflicting incentives. It discusses five major factors – inadequate formal policy and regulatory framework, limited government capability and support, limited sector capacity, private finance reluctance and adverse informal arrangements – that caused serious difficulties both at the program and project level. The paper argues that developing robust third sector social housing comes with substantial financial, administrative and political responsibilities for governments, and its success depends on the alignment between the formal policy framework and informal institutions.