Ep 32: Chile’s “Enabling Markets” Policy with Diego Gil

Starting in the 1970s, the Pinochet dictatorship overhauled its housing policies in an effort “to transform Chile from a nation of proletarios (proletarians) to one of propietarios (property owners).” To achieve that goal, and others, Chile adopted what the World Bank would later call an “enabling markets” policy — an approach that reduced the role of government in housing provision and delegated more authority to the private sector. These reforms had far-reaching consequences, not only within Chile but beyond its borders as other nations followed its lead. Diego Gil joins us to share the history of the enabling markets approach and its impacts, both positive and negative. On the one hand, the reforms led to an impressive expansion of the formal housing sector. On the other hand, homes for low-income households were often built in poorly located, inaccessible areas. We explore the difficult task of balancing government regulation and market efficiency, the need for policies that address housing supply and housing demand, and Gil’s proposed alternative to the enabling markets policy.

Show notes:

• Mc Cawley, D. G. (2019). Law and Inclusive urban development: lessons from Chile’s enabling markets housing policy regime. The American Journal of Comparative Law, 67(3), 587-636.
• Machuca (movie).
• World Bank report: Housing: Enabling Markets to Work, 1993.
• Turner, J.F.C. (1976). Housing by People: Towards Autonomy in Building Environments. 
• Abrams, C. (1966). Man's Struggle for Shelter in an Urbanizing World. MIT Press.
• Hernando De Soto: The Other Path: The Invisible Revolution in the Third World, 1989.
• Planet Money podcast episodes about the Chicago Boys: Part 1, Part 2.
• More on measuring housing needs/deficits in the U.S. context: Housing Voice episode 13 with Nick Marantz and Echo Zheng.
  • And episode 19 on slum upgrading in Bangkok, Thailand.
  • And episode 24 on suburbanization in Mexico.
  • And episode 31 on inclusionary zoning. 
• Kuai, Y. (2021). Flying Under the Radar: 4% Low-Income Housing Tax Credit Program (Doctoral dissertation, UCLA).
• Celhay, P. A., & Gil, D. (2020). The function and credibility of urban slums: Evidence on informal settlements and affordable housing in Chile. Cities, 99, 102605.