heart of the government's strategy.<sup>The Poverty and Inequality Report prepared for the then Deputy</sup> President Thabo Mbeki singles out<sup>three programs, land reform, social welfare and housing grants, as</sup> standing out as important targeted transfers<sup>to the poor (PIR, 1998). Table 2 shows budgeted expenditures</sup> (in nominal terms) on each of these programs<sup>for the period 1995 to 2002.</sup> The table shows that land reform is the<sup>third largest element of South Africa's RDP policies. Resources</sup> spent are more modest than in the<sup>pension and housing program, amounting to less than 5% of the</sup> pension and about 12% of the resources<sup>available to the housing program. Studies had shown that demand</sup> for residential as well as productive land<sup>is considerable (Marcus et al. 1996). Ownership of productive</sup> land not only helps to improve nutrition<sup>and smooth consumption, to gain access to credit, and to make</sup> productive investments. The program's<sup>three main elements, tenure reform, restitution, and redistribution</sup> are complementary parts of a comprehensive<sup>approach to deal with the legacy of apartheid and at the</sup> same time establish the basis for development<sup>of a diverse rural sector in South Africa. The number of</sup> potential beneficiaries to be reached by<sup>these three components jointly could well exceed the number of</sup> those benefiting from housing and pension<sup>programs.</sup> _Tenure reform_ is based on the recognition<sup>that a diversified rural economy that provides economic</sup> opportunities and well-functioning factor<sup>markets requires secure property rights for all South Africans.</sup> Given the apartheid regime's attempts<sup>to systematically undermine land tenure security, the pent up</sup> demand for such a program is tremendous.<sup>According to official estimates, the program's target</sup> population amounts to almost 6 million<sup>rural households, comprised of three main groups, namely (i)</sup> some 3.9 million black rural households<sup>in former</sup><sup>_bantustans_and South African Development Trust</sup> (SADT) areas; (ii) roughly 800,000 permanent<sup>farm-worker households whose lodging is only as secure</sup> as their jobs and who are most affected<sup>by the labor-shedding on large farms associated with agricultural</sup> liberalization; (iii) about 1.3 million households<sup>living in informal and squatter housing in and around</sup> urban areas. Some of the complex issues<sup>involved in tenure reform are illustrated in Cousins (1995) and</sup> in Adams et al. (2000). The government aims<sup>to meet about 10%-1 5% of these demands of people with</sup> insecure tenure, or 600,000 to 900,000 households,<sup>over the next 5-10 years.</sup> _Restitution_ aims to provide specific compensation<sup>to victims of forced "black spot removals" that have</sup> been undertaken since 1913. Cases, which<sup>had to be lodged before the end of 1998, are dealt with through</sup> the Land Claims Court and Commission.<sup>Given the complex nature of the cases involved, the legislation</sup> aimed to establish a quick administrative<sup>rather than judicial process to settle claims. This was not</sup> completely successful - of the more<sup>than 40,000 cases submitted, less than 1% has been resolved</sup> successfully. Furthermore, the need<sup>for written documentation of land ownership implies that the</sup> 8