The problems in allocating the funds arise from the shortage of capital, a factor
which compels economic procedure, regardless of whether the social and economic
system is capitalist, socialist or mixed. Since it is precisely in developing
countries that loanable funds are especially scarce, it is hardly surprising if the
economic pressures there are especially acute. The use of scarce capital resources
for housing construction competes with other forms of expenditure in industry,
small-scale manufacture, agriculture, the infrastructure and so on. In market
economies, resources are directed into the various sectors by means of interest
rates; in state economies, by decisions of the political administration; and, in
mixed economies, by a combination of these two. In principle, however, the
results are identical: 1 the low-income housing sector is neglected. In one case