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Abstract

European settlement in South Africa dates from the occupation of the Cape of Good Hope by the Dutch East India Company in 1652. After the British occupation in 1806, former Dutch colonists established independent Republics which united with the British colonies to form the Union of South Africa in 1910, later to become a Republic in 1961. The greater part of the farmland at the time of the Union was held by Europeans, and the Africans who did not remain to work on European owned farmland were confined to tribal reserves. Under the Natives' Land Act of 1913, segregation was adopted, and Africans were no longer permitted to be share or cash renters on European farmland, nor could Europeans gain title to land set aside for Africans. The Natives' Trust and Land Act of 1936 provided for a transfer of 6 million hectares of land to Africans to compensate them for their loss of land rights and voting rights based on ownership of property, which were removed in other legislation in the same year. This paper examines the role that the market could play in alleviating the inequity that may have arisen in land allocation. If institutional constraints are to be removed through the political process, the market may serve as the indicator of the steps that may be taken.

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