Institutional Legacies and the Differential Consequences of Neoliberal Housing Finance Policy: A Comparison of Germany, Spain, Japan, and South Korea
However, it is not evident whether the national housing systems and housing finance systems have been really converging. In fact, in many countries with non-liberal institutional regimes, the tenure structure and housing finance system have only partially transformed by the systemic effects of newly introduced neoliberal institutional elements.
This article illustrates and tries to explain the different national paths of institutional transformation of housing finance systems under the condition of global financial capitalism on the basis of the theoretical framework of residential capitalism, developed by Schwartz and Seabrooke. This approach shares the interest in institutional differences with other paradigms of comparative capitalism, but pays special attention to the particular systemic features and national differences of the housing finance system, which neither correspond to, nor can be fully explained by the existing classifications by production regime, growth model, or levels of decommodification.
Germany, Spain, Japan, and South Korea are good examples for investigating the continuity and change in the institutional structure of residential capitalism. There are three major reasons: First, the four countries belonged to non-liberal regimes in the housing finance system before the neoliberal changes. Germany could be classified as corporate-market type; Spain as familistic type; and Japan and Korea as statist-developmental type. Second, in all of the four cases, the government introduced neoliberal policies from the 1990s at the latest. Institutional frameworks about construction, mortgage, investment, and rents have been greatly liberalized. Third, such policy shift notwithstanding, the consequences of liberal policies in the structure of housing systems were not only different, but also reflected the institutional legacies, illustrating the unique systemic effects of neoliberal policies in each country.
Germany maintained the strong legal protection of private tenants, so that most of them did not choose to enter the homeownership sector and to take the risks bound to residential mortgages. Spain had an extremely high level of homeownership based on non-commercialized family-resources. With the strong liberal policies by the Arznar's government, however, a large part of the homeowners took part in housing investments, mobilizing the family-resources. Japan experienced the breakdown of housing market in the early 1990s, so that the liberal policies thereafter failed in reversing the risk-averse attitudes of the population. In contrast, in Korea the liberalization of housing sector as a method of economic recovery after the 1997 Asian crisis resulted in housing booms in the 2000s without, however, attracting a large part of the tenants into the homeownership sector.
The findings of this study suggest that although the global financial capitalism imposes general impetus and strain upon most advanced industrialized societies, the institutional conditions and the systemic impact of neoliberal policies greatly vary.