At first sight, in looking at the absolute number of houses built by MINVAH since 1979, or measuring the problems of increased squatter settlements in Managua over the last four years, Nicaraguan housing policies do not suggest a great achievement. However, we must bear in mind that the Nicaraguans chose to put the main emphasis on non-physical improvements in housing provision and on social services in general, in order to benefit the largest number of people with the limited resources which were available. Within the wider field of social expenditure, housing was assigned the third priority after health and education. Since 1981 the housing deficit has grown by 17,000 units annually (Ruchwarger, 1987:170). The declining output in government shelter projects and the overall worsening of housing stress in Nicaragua must be attributed in the first place to the escalating war in the country, which has been imposed on the country by the Reagan administration. This has drastically curbed the disposable budget for any housing construction. At the same time, the influx of refugees fleeing the ever present threat of contra devastations and genocide has frustrated the decentralization policy and produced a chaotic situation in the cities where too many people have sought new homes. It may be true that not all problems encountered in the Nicaraguan housing system can be explained by the war. Due to the poor teaching facilities prevalent in the prerevolutionary period and the brain drain in response to the poor income opportunities, the level of professional and academic skills has been restricted - a condition affecting public authorities in particular when they seek to fill vacancies (because of the low wage levels they offer). There are additional concerns of coordination and competition between different ministries and other state institutions, which need years to sort. Certainly, these restrictions are endemic in most parts of the developing world, but they tend to be even more severe in periods following a political overthrow. Fortunately, the popular character of the Nicaraguan revolution set the foundations for a well-organized grassroots participation, and frequently the local community was able to offset many of the limitations coming from a more central economic or administrative level. This learning experience, which might not have been necessary under more peaceful conditions, will certainly help to build up a real grassroots democracy once the war has been overcome in Central America. In spite of the many problems discussed, the housing policy implemented by the revolutionary government in Nicaragua favourably contrasts with conditions typical in other Latin American or Third World countries. It should be pointed out that 90 per cent of all state housing investment directly favours low income groups -- a figure which would be difficult to encounter in any truly capitalist country, including the industrialized world. However, an even more remarkable and truly revolutionary achievement for the majority of the population is the free access to land and basic services, as provided within the urbanizaciones progresivas program in urban areas. In rural areas the Agrarian Reform represents a similar approach, since land titles are also distributed to small farmers free of charge, and housing is explicitly considered a productive (and not consumption) investment. By adopting these two principles, other Third World countries would be able to solve at least part of their housing problem, but this would also imply sacrificing certain "freedoms" currently enjoyed by landed and finance capital and represent a step towards a mixed economy.