Volume 29.4 December 2005 895–915 International Journal of Urban and Regional Research © 2005 The Authors. Journal Compilation © 2005 Joint Editors and Blackwell Publishing Ltd. Published by Blackwell Publishing. 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St, Malden, MA 02148, USA Blackwell Publishing Ltd.Oxford, UK and Malden, USAIJURInternational Journal of Urban and Regional Research0309-1317Blackwell Publishing Ltd 2005December 200529 4895915Original ArticlesHousing as a tool of economic development since 1929Godwin Arku and Richard Harris Housing as a Tool of Economic Development since 1929 GODWIN ARKU and RICHARD HARRIS The wealthier societies can afford better dwellings than the poorer, and many writers and governments have concluded that the best way to improve a nation’s housing is to promote economic growth. But housing is not simply an indicator, a litmus test of prosperity. Dwellings are places and objects of work, not to mention major repositories of wealth. Builders employ thousands of workers, with multiplier effects on suppliers and lenders. The housing sector, in other words, is a key component of development. Like industry and agriculture, it may be deployed as a policy tool: governments may use it to reduce unemployment, or to improve health and productivity; they may turn existing, insecure wealth into productive capital by regularizing the ownership claims of squatters (de Soto, 2000). Potentially, then, housing is a tool of economic development. It is a moot point as to how long, and even whether, international development agencies have fully recognized the economic significance of housing. Since the late 1980s, various statements by the United Nations Centre for Human Settlements (UNCHS) and the World Bank have asserted this significance, arguing for a strategy that would enable the housing sector to play an active role in economic and social development (UNCHS, 1987; 2003; World Bank, 1993; Yusuf, 1999). Many observers have emphasized the novelty of this point of view, and assumed that in earlier decades international agencies did little in the housing field. For example, Burns and Grebler (1977: 86) have commented that ‘only exceptional colonial administrations had concerned themselves with the housing . . . conditions of the native population’. But such judgements are hasty. Few have attempted to examine the earlier policies of international agencies in the housing field, and none have sought to identify their economic logic (cf. Pugh, 1997; 2001; Harris and Giles, 2003). Through a survey of the statements and actions of those agencies since the 1930s, this article sets out to rectify this neglect and argues that housing has long been viewed as a tool of economic development, although to this day its full potential has not been realized. We frame our survey as a historical narrative because the fluctuating views of international agencies have reflected a changing economic and geopolitical context. It was in the inter-war period that industrialized nations began to promote growth in what we now term the developing world. The first to do so were colonial powers, notably Great Britain. From 1929 the British government made funds available for ‘colonial development’; their magnitude and scope were expanded considerably in 1940 and then again in 1945. After that, however, colonial empires rapidly disintegrated. The United States took over as the leading provider of development finance and aid: directly in its own de facto colony of Puerto Rico; powerfully through bilateral and multilateral agencies that were active in Latin America; and prominently in new global institutions, notably the World Bank. At the same time, the formation of the United Nations, with its associated agencies and commissions, created a fully multilateral organization that, inter alia, sought to promote economic development. These varied agencies faced changing circumstances with different agenda, and we consider each in turn. We focus initially upon the evolving views of Great Britain, as the leading colonial power, and in