Peripheral housing financialization: the cases of Russia and Poland

2019-08-16T11:12:20Z (GMT) by Andrea Lagna Mirjam Büdenbender
In this study, we examine the market-oriented transformations of housing finance systems in Russia and Poland from 1990 to the present time. We argue that in both countries political elites implemented a radical market-based reshaping of housing finance systems, therefore creating the institutional preconditions for housing financialization. However, by pursuing different statecraft strategies and modes of global economic integration, Russian and Polish political elites shaped distinct trajectories of housing financialization. Russian political elites pursued patrimonial statecraft strategies and a mode of global economic integration based on raw material exports. In this context, the Putin administration channeled export revenues into the securitization-based housing finance system and used this market-based infrastructure as an instrument of hegemonic power. While doing so, the Putin government shielded homeowners from an exposure to financial risk. In contrast, Polish political elites pursued liberal statecraft strategies and a mode of global economic integration based on foreign capital inflows. In this scenario, Polish political parties enabled foreign banks to dominate housing finance practices. These banks sold foreign currency mortgages that exposed homeowners to financial risk. Our study offers insights that go beyond the specificities of Russia and Poland, encouraging the development of a research agenda on housing financialization in peripheral economies.