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The Political Economy of Ownership: Housing Markets and the Welfare State

Published online by Cambridge University Press:  02 May 2014

BEN ANSELL
BEN ANSELL*
Affiliation:
University of Oxford
*
Ben Ansell is Professor of Comparative Democratic Institutions, Department of Politics and International Relations and Professorial Fellow, Nuffield College, University of Oxford, New Road, Oxford, OX1 1NF, United Kingdom ([email protected]).
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Abstract

The major economic story of the last decade has been the surge and collapse of house prices worldwide. Yet political economists have had little to say about how this critical phenomenon affects citizens’ welfare and their demands from government. This article develops a novel theoretical argument linking housing prices to social policy preferences and policy outcomes. I argue that homeowners experiencing house price appreciation will become less supportive of redistribution and social insurance policies since increased house prices both increase individuals’ permanent income and the value of housing as self-supplied insurance against income loss. Political parties of the right will, responding to these preferences, cut social spending substantially during housing booms. I test these propositions using both microdata on social preferences from panel surveys in the USA, the UK, and a cross-country survey of 29 countries, and macrodata of national social spending for 18 countries between 1975 and 2001.

Type
Research Article
Information
American Political Science Review , Volume 108 , Issue 2 , May 2014 , pp. 383 - 402
Copyright
Copyright © American Political Science Association 2014 

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