The political economy of public housing upgrading programs

Mi Diao, Tien Foo Sing and Xiaoyu Zhang

Journal of Economic Behavior & Organization, 2024, vol. 224, issue C, 369-389

Abstract: This paper finds new evidence of using public housing upgrading programs for political rent-seeking motives. We merged datasets comprising public housing upgrading programs, resale public housing transactions, electoral division boundaries, and general election events in Singapore from 2010 to 2016. We find evidence of significant increases in public housing upgrading programs in the ruling party constituencies one quarter before general elections. Due to resource constraints, the probability of blocks being selected for future upgrading programs diminishes with the upgrading announcements in neighboring housing blocks. The negative externality is felt more by residents of affected housing blocks in the opposition constituencies, causing price declines of 1.9 % more than housing blocks in the ruling party constituencies. The preferential treatment in the upgrading program selection process for the ruling party constituencies over the opposition constituencies widens the housing price gap between the two constituencies.

Keywords: Public housing market; Political economy; Political business cycles; Public housing upgrading program (search for similar items in EconPapers)
JEL-codes: H4 H5 R2 R3 R5 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:224:y:2024:i:c:p:369-389

DOI: 10.1016/j.jebo.2024.01.007

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