Development Planning

1. Development Planning “We are all planners now “ - Arthur Lewis, Principles of Economic Planning Jonathan Jeong Colin Clarke Ida Bastiaens

2. Golden Oldies

3. Hirschman, Ch1-3Development Projects Observed • Hiding Hand: unforeseen errors lead to new ideas and innovations • Offsetting Potential developments: unsuspected threats and unsuspected remedial actions • Underestimate our creativity and underestimate difficulties of task= offset • Hiding hand increases the rate at which projects undertaken • Makes risk-adverter takes risks • Increase entrepreneurial spirit • Induce action through error • Developers find ways to undertake projects with difficulties: psuedo-imitation technique and psuedo-comprehension

4. Hirschman, cont’d • Uncertainties • Supply Side • Technology • Administration • Finances • Demand Side • Excess demand • shortage • Risk and Pay-off • Latitudes & Discipline • Spatial or Locational Latitude • Temporal Discipline • Latitude for Corruption • Latitude in Substituting Quantity for Quality • Latitude in Substituting Private for Public Funds

5. Waterston, Ch.1, Introduction • Gap between theory and practice • Major unresolved planning problems are primarily political and administrative instead of economic • When a country’s leaders in a stable government are strongly devoted to development, inadequacies in planning can be overcome

6. The Many Meanings of Planning • An organized, intelligent attempt to select the best available alternatives to achieve specific goals • “Planning is the exercise of intelligence to deal with facts and situations as they are and find a way to solve problems” –Nehru • Used for a variety of purposes

7. The Many Meanings of Planning • Despite array of definitions, all planning has certain common attributes: • - looking ahead • - making choices • - arranging that future actions for attaining objectives follow fixed paths, or setting limits to the consequences which may arise • Examples: wartime and postwar reconstruction, town and country, full employment and anti-cyclical, and development

8. Waterston, Ch3Spread of Development Planning • Spread of development planning: • Spreads as much to the developed countries as to the less developed countries • “A matter of necessity rather than choice (p.43)” • Provides the means to overcome obstacles and to ensure systematic economic growth • Demonstration effect of Russian planning • “Today is plan minded (p.43)” • Wide acceptance of planning as a means of achieving national development objectives • Whether a country should plan? • The question now is how to plan.

9. Waterston, Ch3Spread of Development Planning • Historical overview • Early planning • construction of irrigation and flood control system in ancient civilizations • public investment plan in colonial territories • Postwar planning • Europe: France- Monnet Plan of Modernization and Equipment ,1945-46; Marshall Plan,1948 • Asia and the Middle East: Philippines- Joint Philippine-American Finance Commission, 1947; India- Advisory Planning Board,1946; Pakistan- Development Board, 1948; Colombo Plan in South and South East Asia, 1950 • Colonial Planning • United Kingdom: Colonial and Development and Welfare Act, 1940, 1945. • France: Colonial Development Fund, 1935 • Belgian Congo: Ten-Year Plan; Netherland

10. Waterston, Ch3Spread of Development Planning • Historical overview (Continued) • World Bank • Accelerated organized national development planning • Iran’s Planning Committee , 1946; First Seven Year Plan, 1948 • Aid and Planning • Western countries stimulated spread of development planning • The Republic of Korea, The Republic of China (Taiwan) • The United States • National Planning Board/ National Resource Board • Kennedy Administration: national economic growth plan • Appalachian Regional Commission: Six-year plan, 1963 • Johnson Administration: support for regional development

11. Waterston, Ch4Stages of Development Planning • Choice of planning = f (social/economic/political structure, stage of development) • Scope of planning • Limited and piecemeal, project-by-project approach in mixed economy • comprehensive and centralized planning in socialized economy • Focused question • How much planning? • What kind of planning?

12. Waterston, Ch4Stages of Development Planning (Continued) • Socialized countries • Evolution of central planning • The pattern of decentralization • The mixed economies • Three stages of planning: the Project-by-Project Approach, Integrated Public Investment Planning, Comprehensive Planning • Planning experience and staged planning • Approach of international financing institutions • Difficulties of comprehensive planning • The capital-output ratio • Growth models • Up-and-down procedure • The problem of projects • Rationalizing current public investment

13. Literary Map

14. Development Planning Wallis Martinussen Illich • Practical • -Project/Program • -Process/Implementation • -Selection Criteria • Evaluation Technique • Management/Planning • Public sector reform Theoretical -Synthesis - Comparative/historical Perspective -Arguments -Political/Institutional Context - Alternative approaches Critical Caiden and Wildavsky Hirschman Turner and Hulme Staudt Waterston

15. Synthesis

16. Synthesis • Practical: Development planning is not just a top-down approach, it involves a process and varying techniques; many planners can underestimate the difficulties. Fortunately, creativity is also underestimated and projects can overcome their difficulties.

17. Synthesis • Theoretical: Development planning is embedded in political, institutional, and historical contexts. So, effective development planning considers all the components of society and culture.

18. Synthesis • Critical: Development planning is criticized as being both too packaged and overextended. Solutions suggested are greater research into alternatives, including incrementalism.

19. Martinussen, Ch. 22The Political Economy of Civil Society Focus on household and local community Critical Points: • National Income measures do not show income distribution (socially or territorially) • Macroeconomic figures can be misleading because they do not account for: • Subsistence agriculture, fishing, etc • Informal sector, illegal activities • Household production • Environmental destruction

20. Martinussen, Ch. 22 • Household and Whole Economy Model (Friedmann and Polanyi) • Economics embedded in social relations, household unit of organization • Diagram: Household econ econ relations mkt econ (formal and informal) Allocation of time social-cultural relations civil society (communal and domestic)

21. Martinussen, Ch. 22 • Informal Sector and Jobless Growth • Informal: growth of labor and employment, networking theory • Jobless growth: OECD population growth, technological development, military R&D, income distribution • Citizen Resistance Bailey and Scott Micro level perspectives • Politics as Discourse power relations, mentalities, histories, ideologies Insight into political culture and social grouping

22. Illich “Dev as Planned Poverty” • Focus on overconsumption, commodification in OECD and now LDCs • Packaged Deals and Reification (Marx, Freud) • “trained in consumption of packaged goods and services… (become) less effective … in shaping his environment.” • Underdevelopment as a state of mind • “occurs when mass needs are converted to the demand for new brands of packaged solutions that are forever beyond the reach of the majority.” • Change perception of real needs into demand for a mass produced product (example thirst as needing a coke)

23. Illich “Dev as Planned Poverty” • Schools creating inferiority • Condemn people to margin because they all can’t achieve levels of schooling internationally demanded • Answer to underdevelopment: • Finding alternatives and setting priorities • Examples are clean water instead of surgery, medical workers instead of doctors • A Call for research into fundamental alternatives • Account for lack of capital in LDCs

24. Staudt (1991). Ch.5-6 • Main theme: • Although techniques attempt to obtain “clarification and insight,” they are vulnerable to “manipulation.” (114) • Selection and evaluation of project and program work properly only with an understanding of “context” (114) • Outlining project and proposal preparation in a political context • Text book sequence: problem definition, comparison of solutions, selection of solutions • Project/program preparation in institutional context • Selection criteria • Cost-Benefit Analysis • Cost-Effectiveness Analysis • Integrated Political Analysis Technique • Evaluation Technique • Logical Framework: the goals, purposes, outputs, and indicators in a project • EOPS (End-of-Project Status)

25. Turner and Hulme (1997). Ch.6 • Main theme: • Planning, devised for solving social problem, can be another source of problems in the real world • The nature of development problems • Poor data; uncertainty; separation of planning from management; lack of beneficiary participation, and project and politics • Alternative approaches to project planning • Adaptive administration • Participatory rural appraisal

26. Turner and Hulme (1997). Ch.8 • Main theme: • The organizational structure of public enterprises is characterized as bureaucratic. As a consequence, there has been much effort to employ strategies for public sector reform. • Strategies for public enterprise reform • Establishing a policy framework • Focusing on improvement through management reform • Employing various types of privatization. • Politics and feasibility • Successful reform should be, “politically desirable, feasible, and credible” (194)

27. Wallis (1989). Ch.3-4 • Main theme: • Planning has been considered as one of the basic function of organization; it has revealed an array of challenges. • Difficulties of Planning • Lack of political commitment • The isolation of planners • Administrative obstacles • Over-centralized planning • Alternatives of planning • Changing the level of direct state intervention • Attempting greater decentralization of planning

28. Caiden & Widalvsky, Ch.9 • Resource allocation & management • Planning is multi-faceted: • - planning as adaptation • - planning as intention • - planning as rationality • Formal planning: Costs & Benefits • - Budgets as plans • - Levels of rationality

29. Caiden & Widalvsky, Ch.10 • Planning plays a role in, and is influenced by myriad factors, some of which are competing and others which are complementary • Involved with other development issues such as bureaucracy, foreign aid, and budgeting • Hirschman and uncertainty

30. References • Caiden, Naomi and Aaron Wildavsky, Planning and Budgeting in Poor Countries (New Brunswick: Transaction Books, 1980). • Hirschman, Albert O. Development Projects Observed. Chapter 1-3. • Illich, Ivan. “Development as Planned Poverty” in Rahnema and Bawtree, The Post-Development Reader. (London: Zed Books, 1994). • Martinussen, Chapter 22

31. References • Staudt, Kathleen. Managing Development: State, Society, and International Contexts. (Newbury Park: SAGE Publication, 1991). Chapter 5-6. • Turner, Mark and David Hulme. Governance, Administration & Development. (West Hartford: Kumarian Press, 1997). Chapter 6 and 8. • Wallis, Malcolm. Bureaucracy. (London and Basingstoke: The Macmillan Press, 1989). Chapter 3-4. • Waterson, Albert. Development Planning: Lessons of Experience (Baltimore: Johns Hopkins University Press, 1965).