A maze of regulations and administrative barriers has imposed high transaction costs on formal-sector housing entrepreneurs. By raising the costs of providing low-income housing, African governments
Urbanisation is a growing phenomenon in Africa. Across the continent cities are drawing more and more people in search of economic opportunity. The majority of these people end up living in informal settlements: slums. As Africa’s slums expand, international organisations, NGOs, and governments themselves call for strong public-sector action to deal with the problems in these settlements and to limit their expansion. However, government intervention in African housing markets may have contributed significantly to the growth of informal settlements. A maze of regulations and administrative barriers has imposed high transaction costs on formal-sector housing entrepreneurs. By raising the costs of providing low-income housing, African governments bear much responsibility for driving formal-sector entrepreneurs out of the housing market and for driving their citizens into slums.
Citation (Chicago-Style)
Boudreaux, Karol. "Urbanisation and Informality in Africa's Housing Markets," Institute of Economic Affairs 28 (2)(2008): 6-13.