Learning from others: the spread of capital housing subsidies

Abstract

One of the benefits of globalization is that governments have the opportunity to learn from the experiences of others. The ability to learn from others' discoveries and mistakes should improve government performance. This is the basis for the World Bank's partial transformation into a knowledge bank. However, we know little about how governments draw lessons in practice. We know that sometimes they are forced to accept unwelcome lessons, as in IMF conditionality agreements. But perhaps equally often the process of adoption is voluntary. The paper considers how Colombia developed its capital housing subsidy programme. A ready exemplar was available in Chile and the major development banks were anxious to persuade other governments to accept the Chilean model. The paper considers whether Chilean experience was imitated in Colombia, the role that was played by the development banks, and how and why internal considerations determined the final form of the programme.

Notes

Tussie (1995, p. 49). Unlike the World Bank, the Inter‐American Development Bank's Articles of Agreement do not require government guarantees on loans. Hence it accepts guarantees by private banks or direct foreign investors.

Under Belisario Betancur, a major effort was made to make lower‐income housing units available to the poor. The key plank in this effort was to remove the barrier of the housing deposit. The Housing and Savings Corporations were expected to lend a proportion of their savings for social‐interest housing.

Some Chileans also visited Colombia to advise the government, although most of these visits came in 1993 and 1994, after the programme was in place. Much later, in 1999, a team of Chilean consultants conducted an evaluation of the Colombian subsidy programme in preparation for an Inter‐American Development Bank loan to support the programme (Budinich et al., 2002).