Development Planning

Jonathan JeongColin ClarkeIda Bastiaens

“We are all planners now “- Arthur Lewis, Principles of Economic Planning

Golden Oldies

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

Hirschman, cont’d

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

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

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

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.

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

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

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?

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

Literary Map

Development Planning

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

Wallis

Hirschman

Turner and Hulme

Staudt Waterston

Illich

Caiden and Wildavsky

Martinussen

Synthesis

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.

Synthesis

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

Synthesis

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

Martinussen, Ch. 22The Political Economy of Civil SocietyFocus on household and local community

Critical Points:1.National Income measures do not show

income distribution (socially or territorially)2.Macroeconomic figures can be misleading

because they do not account for:1. Subsistence agriculture, fishing, etc2. Informal sector, illegal activities3. Household production4. Environmental destruction

Martinussen, Ch. 22I. Household and Whole Economy Model(Friedmann and Polanyi)a. Economics embedded in social relations,

household unit of organizationb. Diagram:

Household econ econ relations mkt econ (formal and informal)Allocation of time social-cultural relations civil

society (communal and domestic)

Martinussen, Ch. 22I. 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

II. Citizen ResistanceBailey and ScottMicro level perspectives

III. Politics as Discoursepower relations, mentalities, histories, ideologiesInsight into political culture and social grouping

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)

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

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)

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

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)

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

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

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

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

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).