An Institutional Analysis of State-Market Relations in the Saudi Arabian Housing System: A Case Study of Riyadh

Abstract

Over the past decade, policymakers in Saudi Arabia continue to face enormous challenges in meeting the increasing demand for housing, particularly affordable housing. A review of the literature revealed that inefficiencies associated with state institutions and housing policies are constraining the private sector’s ability to sufficiently engage in the production of housing. This study focuses on how the state’s institutional framework in the housing system affects the performance and capacity of the market to deliver housing for the low- and moderate-income segments. The main objective is to uncover the state-market relations in order to understand the processes that shape housing outcomes. The thesis begins by describing the current operation of the Saudi housing system using the capital city of Riyadh as a single case study. Relevant literature on housing research was reviewed to build a platform for this investigation and to drill deeply into existing theoretical frameworks. Multiple institutional theoretical concepts drawn from the literature were adopted and synthesised to create a conceptual framework. This was then used to unpack institutional dynamics in the housing system and to illuminate the contemporary network of state-market relations. An exploratory qualitative research design was undertaken to facilitate insights into the institutional arrangements that shape the actual operation of key actors in the housing system. In-depth interviews conducted over two stages allowed this study to closely examine the complexities of Riyadh’s housing system in its distinctive context. The study found that state-market relations were marked by acute tension that seems to be embedded in the broader institutional context of the housing system. By illuminating and analysing the results of the fieldwork, it was revealed that many issues in the housing market are driven by a number of fundamental factors that amplify the tension between actors in the system and cause the many housing challenges in Riyadh. The implications of the findings for future housing policy are also presented.