Housing Markets and Economic Flexibility
| DOI | http://doi.org/10.1111/1467-9485.00102 |
| Author | Kenneth Gibb,Laurie Hunter |
| Published date | 01 September 1998 |
| Date | 01 September 1998 |
This latest addition to the annual series of Special Issues of the Scottish Journal
of Political Economy is f ocused on the housing market. Specifically, it aims to
explore some of the key issues that arise in an economic context where policy
measures have been designed to improve the flexibility of market systems-
policies which came to the fore initially in the early 1980s in the United
Kingdom under the influence of the Thatcher Government but continued right
through the whole eighteen years of Conservative government f rom 1979 to
1997. These policies were a major part of the supply side approach to policy
adopted by the Conservatives, a necessary micro counterpart to the espousal of
monetarist (or monetarist-informed) policies at the macroeconomic level. If
economic growth could not be enhanced by demand management, and
expansion without increased inflation could only be achieved by enlarging the
productive capacity of the economy, it was important that steps were taken to
improve the efficiency of the supply side of the economy, including the
efficiency of markets (Johnson, 1991).
Markets in many cases were seen by the Government as failing to act
efficiently, either because they were over-regulated, or because private market
arrangements had been replaced by some form of social or non-market
arrangement. The effect was to reduce the flexibility and responsiveness of the
market system, producing distortions of market signals and giving rise to
rigidities which inhibited the optimal allocation and utilisation of resources. A
main purpose of policy was then to reduce the scale of the public sector, to
pursue a course of de-regulation where regulations had been built up over the
years. Later on, policies in the welfare state arena sought to introduce quasi-
market solutions, introducing market signals and elements of competition into
formerly non-market institutions (such intermediate solutions were seen as sa fer
or more politically acceptable— Glennerster, 1997). ‘Economic flexibility’ thus
became a central part of the political agenda and its manif estations were
widespread across many sectors of the economy.
‘Flexibility’ is an easy slogan and it is often difficult to muster arguments
against measures explicitly designed to improve flexibility. Giving coherent
structure and meaning to flexibility is less easy (Legge, 1995 ). In many cases
the original reasons for public ownership or f or regulation had been the
349
Scottish Journal of Political Economy, Vol. 45, No. 4, September 1998
© Scottish Economic Society 1998. Published by Blackwell Publishers Ltd, 108 Cowley Road, Oxf ord OX4 1JF, UK and
350 Main Street, Malden, MA 02148, USA
HOUSING MARKETS AND ECONOMIC
FLEXIBILITY
EDITORS INTRODUCTION
Kenneth Gibb and Laurie Hunter *
*University of Glasgow
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