DEVELOPMENTPLANNI

NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

CHAPTERONE:I
NTRODUCTI
ON

1.
1 Theev
olut
ionofDev
elopmentt
hinki
ng

Theev
olut
ionofdev
elopmentt
hinki
ngcanbesummar
izedi
ntot
hreedi
ff
erentper
iods:

 TheEar
lyPostWarConsensus

 TheWashi
ngt
onConsensus

 TheOsci
l
lat
ingSear
chf
orSi
l
verBul
l
et

1.
1.1 TheEar
lyPostWarconsensus

Thi
sper
iodcov
ersi
mmedi
atel
yaf
terceaseofWor
ldWarI
Iupt
otheendof1960'
sand
begi
nni
ngof1970'
[Link]
sisani
nter
est
ingper
iodf
ort
hedev
elopi
ngwor
ldbecausei
t
get
sat
tent
ionbyacademi
cianshow gr
owt
handdev
elopmentcoul
dbeachi
evedi
n
t
hesecount
ri
[Link]
swhyi
nthe1950'
sand1960'
s,t
hepr
evi
ousl
ynegl
ect
edsub-
f
iel
ds ofDev
elopmentEconomi
cs wer
eredi
scov
[Link]
ail
abl
e economi
c model
s
seemedt
oof
feronl
yli
mit
edi
nsi
ght
sint
othepr
act
icalpr
obl
emsf
aci
ngt
heso-
cal
l
ed
Thi
rdWor
[Link]
nantone-
sect
ormacr
omodel
soft
heday
,fr
om Key
nesi
ant
o
Har
rod-
Domart
oSol
ow seemedt
ohav
erel
ati
vel
yli
tt
ler
elev
ancef
orsoci
eti
esnot
pr
imar
il
yconcer
nedwi
thbusi
nesscy
clesorst
eadyst
atepr
oper
ti
es.

Theper
iod,
foreaseofunder
standi
ngcoul
dbel
ookedi
ntof
ivei
mpor
tantsub-per
iods.

A)Dual
ism
I
tat
tract
eddueat
tent
iondur
ingt
[Link]
sunderdual
i
sm
ar
e:
 Soci
ologi
caldual
i
sm:Boeke,1953i
sthemaj
orpr
oponent
.Thecent
ralt
hemeof
soci
ologi
caldual
i
sm was di
ff
erences bet
ween west
ern and non-
west
ern
obj
ect
ivesandcul
tur
esar
ethemaj
orsour
cef
ordual
i
sm.
 Technol
ogi
caldual
i
sm:Hi
ggi
ns,1956 i
sthe maj
orpr
oponent
.Di
ff
erences
bet
ween v
ari
abl
efact
or pr
opor
ti
ons i
nthe t
radi
ti
onalsect
or and f
ixed
coef
fi
cient
sinmoder
nsect
orasmaj
orsour
cef
ordual
i
sm.

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 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

 Phy
siocr
ats:v
iewi
ng l
and as t
he sour
ce ofal
lweal
th,agr
icul
tur
alsur
plus
suppor
ti
ngt
henon-
agr
icul
tur
alsect
or.
 Cl
assi
caldual
i
sm:Ri
car
doandLewi
s1951ar
emaj
orpr
oponent
[Link]
plusl
abor
aspot
ent
ialf
orgr
owt
hwhent
ransf
err
edf
rom agr
icul
tur
etonon-
agr
icul
tur
e.
Lewi
sal
soasser
tsdual
i
sm i
nlabormar
ket
s(compet
it
ivewagei
nnonagr
icul
tur
e
v
ersusi
nst
it
uti
onal
wagei
nagr
icul
tur
easbasi
sfordual
i
sm)
.

B)Needf
orBal
ancedGr
owt
h(st
ruct
ural
ism)
Rosenst
ein-Rodan,1943 and Nur
kse,1953 and ot
her
semphasi
zed t
heneed f
or
bal
ancedgr
owt
hnotonl
ybet
weenagr
icul
tur
eandnonagr
icul
tur
ebutal
sowi
thi
neach
sect
or,sot
hatSay
'sl
aw coul
dcomei
ntopl
ayandbot
hshoesandsocksshoul
dbe
pr
oducedt
ofi
l
lbot
hthedemandandsuppl
ysi
des.

C)I
nter
nat
ionalTr
adeScene
Pr
ebi
sch,1962st
atedt
hatt
hei
nter
nat
ionalt
radescenepai
ntedi
ncol
orsandwas
unf
ri
endl
yfordev
elopmentanddemandedf
orequi
tabl
eexchange.

D)I
nter
vent
ioni
stSt
ate
Thecur
rentt
heor
eti
calt
hinki
ngi
ndi
cat
est
hatt
her
eisst
rongi
ncl
i
nat
iont
otur
ntot
he
i
nter
vent
ionst
ateasakeyi
nst
rumentf
ordev
elopment
.Ther
easonst
hatt
hiswas
consi
der
ed as key i
nst
rumentf
ordev
elopmentar
efi
rstpr
e-col
oni
ali
ndependent
count
ri
eswantt
oexer
ciset
hei
rowndev
[Link]
hei
nter
vent
ioni
st
f
eltt
he need t
o cr
eat
einf
rast
ruct
ure,and t
he i
nst
it
uti
ons r
equi
red t
o per
mitt
he
f
unct
ioni
ng ofa nat
ionalent
it
[Link] i
ndust
ri
ali
zat
ion was sy
nony
mous wi
th
dev
el 2nd i
opment( ndust
ri
ali
zat
ionr
evol
uti
on)
.Themot
ivat
ionwast
opr
omot
eindust
ry,
wi
thr
elat
ivel
yless at
tent
ion pai
dto whatwas v
iewed as a st
ubbor
nlyst
agnant
agr
icul
tur
epor
tray
edasadr
agont
heeconomy
,andwi
thpeasant
sseenasnon-
r
esponsi
vet
opr
icesandpr
ofi
toppor
tuni
ti
es.

Al
ogi
calaccompani
mentoft
hesev
iewswer
ePLANNI
NG MODELS,f
ocusi
ngont
he
f
low ofr
esour
ces,domest
ical
l
yfi
nancedi
nvest
mentsuppl
ement
edbyf
orei
gncapi
tal
andpay
ingr
elat
ivel
yli
tt
leat
tent
iont
ochangesi
nthebehav
ioroft
hesy
stem ort
he

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 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

r
elev
anceoft
echnol
ogy
.

Thepl
anni
ngmodel
susedwer
e:

 Pl
anni
ngf
orr
esour
ces:suchasSi
mpl
eHar
rod-DomarandMahal
onobi
smodel
s.
Thesemodel
sar
eal
lsi
l
entonpr
ice,andf
orei
gnexchanger
atef
lexi
bil
i
[Link]
pr
edomi
nantv
iew ofpol
i
cymaker
satt
hatt
imewast
hatgr
owt
handef
fi
ciency
shoul
dtakepr
ior
it
yandt
hei
ssuesofequi
ty,pov
ert
yal
l
evi
ati
on,et
cshoul
dbe
t
akencar
eofatal
aterdat
e.
 Mul
ti
-sect
orpr
oduct
ionf
unct
ionswi
thmul
ti
plei
nput
sandv
ari
abl
e(I
nput
-Out
put
model
s,Soci
alAccount
ing Mat
ri
x).The r
ealf
ocus ofpl
anni
ng shi
ft
ed f
rom
r
esour
cesf
ocust
odev
isi
ngst
rat
egi
esf
orpol
i
cychanget
oaccommodat
ethe
changi
ngr
equi
rement
soft
ransi
ti
on.

E)Technol
ogyi
ngener
ati
nggr
owt
h
Sol
ow,1957andKuznet
s,1955cont
ri
but
etoemphasi
zet
hei
mpor
tanceoft
echnol
ogy
i
ngener
ati
nggr
owt
[Link]
spr
ovi
dedanew poi
ntofdepar
tur
eforneo-
classi
calgr
owt
h
t
heor
y,notonl
yrepl
aci
ngHar
rod-
Domarwi
thasubst
it
utabl
epr
oduct
ionf
unct
ion,but
al
soent
hroni
ngexogenoust
echnol
[Link]
ntr
oducedcr
it
icalel
ement
sli
ke
Resear
ch&Dev
elopment(
RandD)
,pat
ent
sandot
herf
ormsofsci
ent
if
icendeav
ors
l
eadi
ngt
onewgr
owt
htheor
y.

I
twashowev
er,
Kuznet
s1971,
thoughmai
nlyconcer
nedwi
thdescr
ibi
ngmoder
ngr
owt
h
r
athert
hananal
yzi
ngt
het
ransi
ti
onpr
ocessi
nget
ti
ngt
her
e,whi
chpr
ovi
dedanot
her
essent
iali
ngr
edi
entf
ocusedpr
eci
sel
yont
hedev
elopi
ngwor
ldatt
heendoft
hepost
-
warconsensuser
[Link]
swasi
nter
est
edi
nwhysomedev
elopi
ngcount
ri
eswer
e
successf
ulandot
her
snotandpl
acedmaj
oremphasi
sont
hesour
cesofst
ruct
ural
changeov
ert
imeasbet
weenagr
icul
tur
e,i
ndust
ryandser
[Link]
iewedpol
i
cyas
ei
therbasi
cal
l
yaccommodat
iveorobst
ruct
ivet
othepl
ayofunder
lyi
ng economi
c
f
orcesanddi
dnotv
iewi
tasanexogenousv
ari
abl
e.

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 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

1.
1.2 TheWashi
ngt
onConsensus

I
tis undoubt
edl
yunf
airt
o at
tri
but
ethe r
eal
i
zat
ion t
hatpol
i
cychange i
sthe key
i
ngr
edi
entofsuccessf
uldev
elopmentt
othei
nter
nat
ionalf
inanci
ali
nst
it
uti
ons.I
trat
her
woul
d gi
ve mor
e cr
edi
tfor t
he r
eal
i
zat
ion t
hat pr
ices mat
ter mor
e and t
hat
macr
oeconomi
cst
abi
l
itymat
ter
[Link]
orcont
ri
but
orsoft
hei
deaar
e:Li
tt
le,
Sci
tov
sky
,and Scot
t1970,Bhagwat
i1978,Kr
ueger1978,Cohenand Rani
s,1971,
amongot
her
s,whoi
nsi
stedt
hatar
e-st
ruct
uri
ngoft
her
ail
sofdev
elopmentwasneeded.

Themai
ningr
edi
ent
soft
heconsensusar
e:
 Pr
ivat
izat
ionanduni
fi
edandcompet
it
iveexchanger
ates
 Si
mul
taneousl
i
ber
ali
zat
ionoff
inanci
almar
ket
s(domest
icandi
nter
nat
ional
)
 Rel
ati
veopennesst
oFor
eignDi
rectI
nvest
ment(
FDI
)andgr
adualder
egul
ati
onof
cont
rol
syst
ems
 Emphasi
zeonRandD
 Changesatmi
crol
evel
:labormar
ketpr
oduct
ivi
ty,l
egal
,fi
nanci
aland ot
her
i
nst
it
uti
onal
ref
orms
 Pr
ogr
am l
endi
ngchangesi
ntost
ruct
uraladj
ust
mentl
endi
[Link]
hpr
ogr
am and
st
ruct
uraladj
ust
mentl
endi
ng wer
e subj
ectt
o debat
es r
angi
ng f
rom cost
ef
fect
iveness oft
he r
esour
ces spentt
o al
lthe wayt
he condi
ti
onal
i
tyl
i
sts
i
mposedoni
nter
nal
aff
air
soft
her
eci
pientcount
ry.

1.
1.3 TheOsci
ll
ati
ngSear
chf
oraSi
lv
erBul
let

Vi
ewi
ng percapi
tai
ncome gr
owt
h as t
he keyobj
ect
ive has been quest
ioned f
or
somet
[Link]
iousmai
nst
ream at
tent
ionhasbeengi
vent
othedi
str
ibut
ionofi
ncome,
t
otheext
entt
owhi
chpr
ivat
eincomepov
ert
yisr
educedandt
otheext
entt
owhi
ch
publ
ici
ncomepov
ert
y(t
hedi
str
ibut
ionofpubl
i
cgoods)i
sbei
ngaddr
[Link]
i
c
i
ncomepov
ert
ycanbeseent
hroughv
ari
oushumandev
elopmentdi
mensi
onsl
i
kei
nfant
mor
tal
i
ty,
li
feexpect
ancy
,li
ter
acyasf
undament
alobj
ect
ivesofdev
elopment
.

Thebasi
cef
fi
ci
ency-equi
tyt
radeof
fsl
edt
oredi
str
ibut
ionwi
thgr
owt
happr
oachof

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 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
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dev
elopment
.The cont
rov
ersi
alr
elat
ionshi
p bet
ween gr
owt
h and i
ncome pov
ert
y
al
l
evi
ati
on i
sthatgr
owt
his a necessar
ybutnotsuf
fi
cientcondi
ti
on f
orpov
ert
y
r
educt
ion.

Theor
eti
calRev
isi
oni
sm
Recent
lywi
tht
headv
ancementi
ntheor
eti
calt
hinki
ngandpr
obl
emsf
acedi
ngl
obal
r
elat
ions,
ther
ear
isesaneedt
orev
isesomet
heor
[Link]
e:
 NewTr
adeTheor
y:t
hechal
l
enget
oopenness(
global
i
zat
ion)andf
avor
ingi
mpor
t
subst
it
uti
on(
inf
ant
s)l
eadst
othet
wo-
wayr
elat
ionshi
pbet
weengr
owt
hand
humandev
elopment
.
 Recentemphasi
zeofdev
elopmenteconomi
stsar
eon:mi
crof
oundat
ionsof
dev
elopmenti
ssues(
womenhousehol
ddeci
sionmaki
ng;poorper
for
manceof
l
and,l
aborandcr
edi
tmar
ket
s)andmi
cro-
credi
tor
gani
zat
ionsandNGO'
sin
dev
elopi
ngcount
ri
es.

BestGuessesast
otheWayFor
war
d
 Av
oiddeal
i
ngwi
thl
argenumberandgoi
ngt
owar
dsasetofsmal
lnumber
compar
ati
ve hi
stor
ical st
udi
es encompassi
ng t
ypol
ogi
cal
l
y '
'
nei
ghbor
ing'
'
count
ri
es.
 Need t
o pur
sue on t
he t
wo-
way r
elat
ionshi
p bet
ween gr
owt
h and human
dev
elopment
.
 Cl
oserl
ook on t
he pr
os and cons ofdecent
ral
i
zat
ion and i
tsr
elat
ion t
o
democr
ati
zat
ionanddeci
sionmaki
ngbyt
hebr
oaderbodypol
i
tics.

1.
2 Hi
stor
icalBackgr
oundofEconomi
cPl
anni
ng

Thei
deaofpl
anni
nghasal
onghi
stor
yandgoesbackt
othet
imeofPl
uto[
thef
ir
st
per
sonwho t
alked aboutor
gani
zed pl
anni
ng]
.Itwasl
aterdev
eloped,shaped and
mol
dedbyemi
nentt
hinker
sandwr
it
ersbot
hint
hewest
ernandeast
[Link]
er,
t
hei
deaofeconomi
cpl
anni
ngi
nit
smoder
nfor
miscompar
ati
vel
ynew.I
ti he20th
st
cent
uryphenomena.

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 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

I
deol
ogi
cal
l
y,t
heev
olut
ioni
sfr
om t
hreeper
spect
ives:
[Link]
anni
ngi
neast
ernEur
ope(
soci
ali
stper
spect
ive)
[Link]
anni
ngi
nwest
ernEur
ope(
capi
tal
i
stper
spect
ive)
[Link]
anni
ngi
nunder
dev
elopedcount
ri
es(
mixedeconomyper
spect
ive)

1.
2.1 Pl
anni
ngi
nEast
ernEur
ope

Dur
i he19th cent
ngt ury
,int
ell
ect
ualt
heor
ist
s,t
hinker
sandwr
it
ersi
ntheEast
ernEur
ope
becamef
edupwi
tht
hei
nqui
ryandcont
radi
cti
onsofpur
ecapi
tal
i
[Link]
efor
e,t
hey
dev
elopedt
hei
deaofst
atei
nter
vent
iont
osetmat
ter
sri
ghtandt
opr
eventi
nequal
i
ties
r
esul
ti
ngf
rom capi
tal
i
sm (
freeeconomy
)asol
uti
ont
othef
all
acyofl
aisser
-f
air
[Link]
t
wasonl
yst
atei
nter
vent
iont
hatwasadv
ocat
[Link]
ewasnoment
ionofeconomi
c
pl
anni
ngandhowt
oint
err
elat
ewasambi
guous(
alt
hought
heyr
eal
i
zedt
hatl
aisser
-f
air
e
wasnotwor
king)
.In1928t
heSov
ietUni
ongav
ethei
deaofeconomi
cpl
anni
ngar
eal
shapewheni
tfor
mul
atedi
tsf
ir
stf
ivey
earpl
an.

Themai
nobj
ect
iveoft
hesoci
ali
st(
Sov
iet
)pl
anwast
oachi
evet
her
api
dtr
ansf
ormat
ion
ofabackwar
dagr
icul
tur
esect
or(
tradi
ti
onal
sect
or)i
ntoamoder
nindust
ri
alsect
or.

1.
2.2 Pl
anni
ngi
nWest
ernEur
ope

Ther
ecoul
dbesev
eralf
act
orst
hatnecessi
tat
epl
anni
ngi
nWest
ernEur
ope,among
ot
her
swar
s,gr
eatdepr onof1930th,expansi
essi onofmar
ket
s,andspeci
ali
zat
ion.I
n
West
ern economi
cs,a ser
ies of t
he abov
e hi
stor
icaldev
elopment l
ed t
othe
coor
dinat
ionofeconomi
cpol
i
cies,
i.
e.,
planni
[Link]
e:
A)Thedev
elopmentofsci
enceandt
echnol
ogynotonl
ymademat
eri
alpr
ogr
ess
possi
ble,butal
sot
heymadepl
anni
ngpossi
bleaswel
limpr
ovecomput
ati
on
f
aci
l
ity
;adv
ances i
n managementt
heor
y(or
gani
zat
ion coor
dinat
ion)
. The
i
nter
veni
ng depr
essi
on r
emi
nded t
hest
ateoft
het
ragedyi
ncompl
etenessof
economi
ctheor
yandpubl
i
cpol
i
cy.
B)I
nthe1930’
s,t
hecapi
tal
i
stwor
ldwasi
nthemi
dstoft
hebi
ggestdepr
essi
oni
nthe
wor
ldhi
stor
[Link]
tal
i
sm f
ail
edanut
tercol
l
apseandi
tsi
nher
entcont
radi
cti
on

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 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

cameupt
othesur
[Link]
cgr
owt
hcol
l
apsedandacut
emi
ser
ypov
ert
y
wel
lexper
iencedbypeopl
[Link]
efor
e,economi
standpol
i
tici
anf
avor
edeconomi
c
pl
anni
ngasar
emedyf
ort
heseandot
hereconomi
cil
l
[Link]
e’
smi
ndnowt
urned
t
oeconomi
cpl
anni
ngaspanaceaf
ort
hei
reconomi
cil
l
swhi
l
eKey
neswr
it
ings
al
soi
nawayst
rengt
hent
hebel
i
efi
ntheef
fi
cacyandeconomi
cpl
anni
ngi
n
capi
tal
i
stcount
ri
es. Meanwhi
l
ether
ewasanat
temptt
opl
aneconomi
cli
fei
n
Nazi
Ger
manandFasci
stI
tal
ydur
ingt
het
ime(
thi
rt
ies)
.
Not
e:-Theobj
ect
iveoft
heeconomi
cpl
anni
ngi
ntheWestwasbasi
cal
l
y
di
ff
erentf
rom t
hatoft
heSovi
etUni
[Link]
poseofpl
anni
ngi
nNazi
Ger
manywaspr
imar
il
ytobui
l
dupt
hewarpot
ent
ialr
athert
hani
mpr
ovi
ng
t
hel
i
vingst
andar
doft
hepeopl
e.

C)Theout
breakofWor
ldWarIandI
Inecessi
tat
est
hepr
operandef
fi
cientpl
anni
ng
ofeconomi
cresour
cesf
orsuccessf
ulpr
osecut
ionoft
hewar
.[Forcoor
dinat
ed
managementofscar
cer
esour
ces]
D)I
nthepostwarper
iod,
thewardev
ast
atedcount
ri
esofEur
opewer
ecompel
l
edt
o
r
esor
ttoeconomi
cpl
anni
ngt
orehabi
l
itat
ethemsel
vesowi
ngt
o:-
 Asacondi
ti
onf
orr
ecei
vi
ngassi
stanceundert
heMar
shalpl
an,t
heUSA
i
nsi
stedupont
hesecount
ri
est
ofor
mul
atet
hei
rrehabi
l
itat
ionpl
ancov
eri
ng
al
mostev
erysect
oroft
heeconomy
.
 TheUSAi
tsel
fhasr
ecogni
zedt
hesi
gni
fi
canceofeconomi
cpl
anni
ngwhen
i
tadopt
saneconomi
cpr
ogr
am cal
l
edt
he“
new deal
”tocomeoutoft
he
suf
fer
ingf
rom gr
eatdepr
essi
oni
nthi
rt
ies.
E)The gr
owt
h of mar
ket
s and i
ncr
eased speci
ali
zat
ion l
ed t
o i
ncr
eased
i
nter
dependence among economi
c act
ivi
ti
es and t
o gr
eat
er economi
c
ext
ernal
i
ties,whi
chl
eadt
oadopt
ionofeconomi
cpl
anni
[Link]
eisaneedt
o
i
nter
venepubl
i
cagenci
est
orect
if
ythenegat
iveext
ernal
i
ties.
F)Thedev
elopmentofdemocr
acyal
sol
eadt
otheadopt
ionofpl
anni
ngi
nor
dert
o
r
ect
if
y soci
ali
nequal
i
ties peopl
e coul
dvot
efort
hose who exper
ience an
i
nter
vent
ioni
stappr
oach.

Page7
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

1.
2.3 Pl
anni
ngi
nUnder
dev
elopedCount
ri
es

Economi
cpl
anni
ngwasconsi
der
edasi
mpor
tantpanacea(
remedy
)forunder
dev
eloped
count
ri
esi
nthei
rdesi
ref
ori
ndust
ri
ali
zat
[Link]
oachi
ever
api
dgr
owt
hinshor
t
per
iodoft
[Link]
cpl
anni
ng,
ther
efor
e,wasconsi
der
edasat
oolt
oachi
ever
api
d
economi
cdev
elopment
.

Howev
er,t
hedev
elopment(
evol
uti
on)ofpl
anni
ngt
ookadi
ff
erentcour
se(
pat
h)t
han
t
her
ichcount
ri
esduet
othef
oll
owi
ngr
easons:

 I
nLessDev
elopi
ngCount
ri
es,pl
anni
ngwasconsi
der
edasani
deol
ogyr
ather
t
hanameansbecausei
nthesecount
ri
espl
anni
ngwasconsi
der
edasadesi
re
(
expr
essi
on)ofmanyt
hings,
suchas:Desi
reofsel
fcont
rol
,Desi
re(
expr
essi
on)
ofi
ndependence,Expr
essi
onofsel
f-
det
ermi
nat
ion,t
henpl
anni
ngasapol
it
ical
andcul
tur
algoal
.

 New l
eader
s(el
i
tes)emer
gedwhent
heygoti
ndependencewi
thnew v
isi
on
(
ideas)
.Thi
sbr
ingsnew deci
sionmaki
ngcapaci
ty,whi
chi
stomeancol
oni
al
admi
nist
rat
orswer
egoneandt
hesenew l
eader
shav
etopl
anbecausei
twas
consi
der
edasapot
ent
ialt
ool(
inst
rument
)tosur
viv
eandpr
osper
it
[Link]
er,
t
he t
hen pl
anni
ng wasnotasa r
esul
tofpopul
arpar
ti
cipat
ion (
bot
tom up
pl
anni
ng)
.Itwasupdownpl
anni
ngt
oexpr
esst
heneedoft
hel
eader
swho
cont
rolt
hepol
i
ticalst
ruct
ure-t
heydi
ctat
ethepl
[Link]
anni
ngher
ewasnotasa
consequentofi
ndust
ri
ali
zat
ion,whi
chi
sthei
nver
seoft
heWest
ern,dev
eloped
count
ri
es.

I
ngener
al,af
teri
tsi
ntr
oduct
ioni
ntheUSSRi
n1929t
heconceptofpl
anni
ngr
emai
ned
unconsi
der
edf
oraboutt
wodecades,t
il
laf
tert
heendofWWI
[Link]
ali
stcount
ri
es
st
art
ed pr
epar
ing and i
mpl
ement
ing t
hei
rpl
ans af
ter1945 wher
eas non soci
ali
st
count
ri
espl
anni
ngt
ookbi
rt
hint
he1950’
[Link]
yispl
anni
ngi
npr
act
icev
erynew,i
t
hasdur
ingi
tsbr
iefexi
stence,
under
gonesev
[Link]
ncl
udesconsi
der
abl
e
di
ver
sif
icat
ionofmet
hodsofpl
anni
ng,ev
eni
nsoci
ali
st count
ri
es,accor
dingt
othe
speci
fi
chi
stor
ical
condi
ti
onsofeachcount
ry;
great
erdecent
ral
i
zat
ion,
par
ti
cul
arl
yint
he
spher
eofmanagementofi
ndust
ry,
l
argeuseofeconomi
cincent
ivesanddecr
easi
ng

Page8
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

useofadmi
nist
rat
ivei
nst
rument
sfort
hei
mpl
ement
ati
onofpl
anset
c.

1.
3 Pr
oject
ion,
Planni
ngandFor
ecast
ing

Thepl
annershoul
dhav
eani
nter
estoradesi
reont
hesubj
ectmat
terhe/
shei
sgoi
ngt
o
accompl
i
shbef
ore“
whenandhow”t
oper
for
mit
.Adesi
ret
ounder
takeawor
kiscal
l
ed
pr
oject
ion,
i.
[Link]
oject
ioni
sapr
econdi
ti
ont
opl
anni
ngandf
orecast
ing.

Pl
anni
ngatanyt
imei
sconcer
nedwi
tht
hef
utur
e,whent
hegoall
aiddowni
napl
anand
t
hemeansbywhi
cht
hesear
etobeachi
[Link]
cast
ingi
nvol
vi
ngt
heuse
ofst
ati
sti
call
awsandpr
obabi
l
itycal
cul
ati
onal
soconcer
nst
hef
utur
eandpr
ovi
des
answert
oquest
ionsl
i
ke“
when?
”and“
how accur
atel
y?”Pl
anni
ngi
snotf
orecast
ing
al
thoughi
tmakesuseoft
het
echni
quesoff
orecast
ing.

For
ecast
ingr
egar
dseconomi
cact
ivi
tyasaspont
aneousact
ivi
ty,
whi
chi
tjustt
raceout
andt
owhi
chwear
esubj
ect
ed wher
easpl
anni
ng i
nfl
uencest
hecour
seofev
ent
sand
underi
tman,i
nst
eadofbei
ngsubj
ect
edt
oeconomi
cev
ent
s,di
ctat
est
otheeconomy
.
Assuchpl
anni
ngal
sol
i
mit
sther
elev
anceoff
orecast
ingbycont
rol
l
ingt
heev
ent
s.I
t
f
oll
ows t
hatwi
tht
he i
ncr
ease t
he degr
ee ofper
fect
ion i
n pl
anni
ng,t
he f
iel
d of
f
orecast
ingwi
l
lbecor
respondi
ngr
educed.

Howev
er,
for
ecast
ingi
simpor
tanti
ntwor
espect
s:

i
. I
tshowst
hel
i
kel
ycour
seoff
utur
edev
elopment

i
i
. I
tenabl
es concer
ned peopl
etot
ake necessar
y st
eps f
ormeet
ing t
he
dev
elopi
ngsi
tuat
ions

Despi
tet
he di
ff
erence,i
tis nev
ert
hel
ess t
rue t
hatpl
anni
ng i
mpl
i
es a pr
eli
minar
y

Page9
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

oper
ati
onoff
orecast
[Link]
anni
ngi
spossi
blewi
thoutpl
anner
satf
ir
stbei
ngawar
e
oft
hef
utur
ecour
seofev
ent
s.I
nthesi
tuat
ionwher
efut
ureeconomi
cdev
elopment
sar
e
unav
oidabl
eeachpl
anconst
it
utesabl
endofel
ement
soff
orecast
ingast
owhati
swhat
i
sobj
ect
ivel
yunav
oidabl
ewi
thpl
anni
ngofwhati
sdesi
[Link]
ecast
ingget
sint
he
pr
epar
ati
onofpl
anni
ngi
ntwoway
sint
hepr
epar
ati
onofpl
ans,andi
nknowi
ngabout
t
hosedev
elopment
swhi
chcannotbei
nfl
[Link]
atedbyMaur
iceDobb“
anypl
an
musti
nsomef
orm bysy
nthesi
soff
orecastanddi
rect
ion”
.
1.
4 Def
ini
ti
onsofEconomi
cPl
anni
ng

Ther
eisnoagr
eementamongeconomi
stswi
thr
egar
dtot
hemeani
ngoft
het
erm
economi
cpl
anni
[Link]
erm hasbeenusedv
eryl
oosel
yineconomi
cli
ter
atur
e.I
tis
of
tenconf
usedwi
thcommuni
sm,soci
ali
sm oreconomi
cdev
elopment
.Anyt
ypeof
st
atei
nter
vent
ioni
neconomi
caf
fai
rshasal
sobeent
reat
edaspl
anni
[Link]
hest
ate
cani
nter
veneev
enwi
thoutmaki
nganypl
[Link]
heni
spl
anni
ng?

Pl
anni
ngi
sat
echni
que,ameanst
o anendbei
ngt
her
eal
izat
ionofcer
tai
npr
e-
det
ermi
nedandwel
l
-def
inedai
msandobj
ect
ivesl
aiddownbyacent
ralpl
anni
ng
aut
hor
it
[Link]
oachi
eveeconomi
c,soci
al,pol
i
ticalormi
l
itar
yobj
ect
ives.
Thei
deaunder
lyi
ngpl
anni
ngi
saconsci
ousanddel
i
ber
ateuseoft
her
esour
cesoft
he
communi
¬tywi
thav
iewt
oachi
evi
ngcer
tai
ntar
get
sofpr
oduct
[Link]
ate,
thr
ougha
pl
anni
ngaut
hor
it
y,t
akest
her
esponsi
bil
i
tyofpl
anni
ng.I
trepr
esent
sacompl
etebr
eak
f
rom t
hepol
i
cyofl
aissez-
fai
re.

Thet
womai
nconst
it
uent
soft
heconceptofpl
anni
ngar
e:
 Asy
stem ofendst
obepur
sued,
and
 Knowl
edgeast
otheav
ail
abl
eresour
cesandt
hei
ropt
imum al
l
ocat
ions.
Thus,
planni
ngi
sat
echni
quef
orachi
evi
ngcer
tai
nsel
f-
def
inedandpr
e-det
ermi
nedgoal
s
l
aiddownbyacent
ralpl
anni
ngaut
hor
it
[Link]
ofessorLewi
s([Link]
thurLewi
s)i
n"The
pr
inci
plesofEconomi
cPl
anni
ng"hasr
efer
redt
osi
xdi
ff
erentsensesi
nwhi
cht
het
erm
pl
anni
ngi
susedi
neconomi
cli
ter
atur
[Link]
e;
 Town and count
ry pl
anni
ng – i
nvol
vi
ng geogr
aphi
calzoni
ng off
act
ori
es,
r
esi
dent
ial
bui
l
dings.

Page10
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

 pr
ogr
ammi
ngofpubl
i
cexpendi
tur
efordi
ff
erentt
imeper
iod

 Pl
anni
ngofpr
oduct
ion(howf
ir
msusedi
ff
erentf
act
orsofpr
oduct
ion)

 Pl
anni
ngwhi
chi
nvol
vesset
ti
ngoft
arget
sbygov
ernmentf
orpr
ivat
eorpubl
i
c
ent
erpr
ises

 Pl
anni
ngwhi
chi
ncor
por
atet
argetset
ti
ngf
ort
hewhol
eeconomy
.

 Pl
anni
ngwhi
cht
hegov
ernmentusest
otr
ytoenf
orceuponpr
ivat
eent
erpr
ises.

Ther
eisanenor
mousl
i
ter
atur
einwhi
chi
tref
ersonl
ytot
hegeogr
aphi
calzoni
ngof
f
act
ors,r
esi
dent
ialbui
l
dings,ci
nemasandt
hel
i
[Link]
imest
hisi
scal
l
edt
ownand
count
rypl
anni
ngandsomet
imesj
ustpl
anni
[Link]
anni
ngmeansonl
ydeci
dingwhat
moneyt
hegov
ernmentwi
l
lspendi
nthef
utur
e,i
fithast
hemoneyt
ospend.

A pl
annedeconomyi
sonei
nwhi
cheachpr
oduct
ionuni
t(orf
ir
m)usesonl
ythe
r
esour
cesofmen,
mat
eri
alsandequi
pmental
l
ocat
edt
oitbyquot
aanddi
sposesofi
ts
pr
oductexcl
usi
vel
ytoper
sonsorf
ir
msi
ndi
cat
edt
oitbycent
ral
order
.

Pl
anni
ng'somet
imesmeansanyset
ti
ng ofpr
oduct
ion t
arget
sbyt
hegov
ernment
,
whet
herf
orpr
ivat
e orpubl
i
c ent
erpr
[Link]
ernment
s pr
act
ice t
hist
ype of
pl
anni
ngi
fonl
yspor
adi
cal
l
y,andi
fonl
yforoneort
woi
ndust
ri
esorser
vicest
owhi
ch
t
heyat
tachspeci
ali
mpor
tance.

Her
etar
get
sar
esetf
ort
heeconomyasawhol
e,pur
por
ti
ngt
oal
l
ocat
eal
lthecount
ry'
s
l
abor
,for
eign exchange r
aw mat
eri
als and ot
herr
esour
ces bet
ween t
he v
ari
ous
br
anchesoft
heeconomy
.

Thewor
d'pl
anni
ng'i
ssomet
imesusedt
odescr
ibet
hemeanswhi
cht
hegov
ernment
usest
otr
ytoenf
orceuponpr
ivat
eent
erpr
iset
het
arget
swhi
chhav
ebeenpr
evi
ousl
y
det
ermi
[Link]
dynandZwei
gmai
ntai
nst
hatpl
anni
ngi
spl
anni
ngoft
heeconomy
,
notwi
thi
ntheeconomy
.Iti
snotamer
epl
anni
ngoft
owns,publ
i
cwor
ksorsepar
ate
sect
ionoft
henat
ionaleconomy
,butoft
heeconomyasawhol
[Link]
anni
ngdoes
notmeanpi
ecemeal
planni
ngbutov
eral
lpl
anni
ngoft
heeconomy
.

Page11
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

Someoft
hedef
ini
ti
onsofeconomi
cpl
anni
nggi
venbyot
heracademi
ciansar
e:

Pr
ofessorRobbi
nsdef
ineseconomi
cpl
anni
ngas"
col
l
ect
ivecont
rolorsupersessi
onof
pr
ivat
eact
ivi
ti
esofpr
oduct
ionandexchange.
"

ToHay
ek,
planni
ngmeans,
"thedi
rect
ionofpr
oduct
iveact
ivi
tybyacent
ral
aut
hor
it
y."

Accor
dingt
oDr
.Dal
ton,"
Economi
cpl
anni
ngi
nthewi
destsensei
sthedel
i
ber
ate
di
rect
ionbyper
sonsi
nchar
geofl
arger
esour
cesofeconomi
cact
ivi
tyt
owar
dschosen
ends.
"

Lewi
sLor
dwi
ndef
inedeconomi
cpl
anni
ng,"
asaschemeofeconomi
cor
gani
zat
ioni
n
whi
ch i
ndi
vi
dualand separ
ate pl
ant
s,ent
erpr
ises,and i
ndust
ri
es ar
etr
eat
ed as
coor
dinat
euni
tsofonesi
ngl
esy
stem f
ort
hepur
poseofut
il
izi
ngav
ail
abl
eresour
cest
o
achi
evet
hemaxi
mum sat
isf
act
ionoft
hepeopl
e'
sneedswi
thi
nagi
vent
ime.

I
nthewor
dsofZwei
g,"
Economi
cpl
anni
ngconsi
stsi
ntheext
ensi
onoft
hef
unct
ionsof
publ
i
caut
hor
it
iest
o or
gani
zat
ion and ut
il
izat
ion,ofeconomi
cresour
[Link]
anni
ng
i
mpl
i
esandl
eadst
o"cent
ral
i
zat
ionoft
henat
ional
economy
.

Oneoft
hemostpopulardef
ini
tionsisbyDi
cki
nsonwhodef
inespl
anni
ngast
he
maki
ngofmaj
oreconomicdecisionson:
 whatandhowmuchi
stobepr
oduced,
 How,
whenandwher
eiti
stobepr
oduced,and
 t
owhom i
tist
obeal
l
ocat
ed,
Ev
ent
hought
her
eisnounani
mit
yofopi
nionont
hesubj
ect
,yeteconomi
cpl
anni
ngas
under
stoodbyt
hemaj
ori
tyofeconomi
stsi
mpl
i
esdel
i
ber
atecont
rolanddi
rect
ionoft
he
economybya cent
ralaut
hor
it
yfort
hepur
poseofachi
evi
ng def
ini
tet
arget
sand
obj
ect
iveswi
thi
naspeci
fi
edper
iodoft
ime.

Asawor ki
ngdefi
nit
ionPlanni
ngisatechniqueorameanst oachi
[Link]
ref
erst
ocertai
npredeter
minedtar
get(welldefi
nedobj
ect
ive).Endmightbeachi
evi
ng:
 Economi
cobj
ect
ives,
 Soci
alobj
ect
ivesormi
l
itar
yobj
ect
ivesorbot
h

Page12
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

Themainpoi nti
snottohav eplanornott ohavepl
anbutwhatkindofplandoweneed
toachi
ev et
heobject
[Link]
onofstatei
nalleconomi
cactivi
ti
esisi
nev
itable,
i
.e.;
governmentdoint
ervenei naneconomyi nonewayoranot her
.Butwhatmat tersi
s
thedegree,
typeandnatureofi nter
vent
ion.

I
tisdi
ff
icul
ttohav
easi
ngl
euni
ver
salaccept
eddef
ini
ti
onofeconomi
cpl
anni
[Link]
e
ar
evar
iousf
act
orswhi
chobst
ruct
edf
ort
hecl
earandpr
eci
seconceptofeconomi
c
pl
anni
[Link]
cpl
anni
ngcanbeseenf
rom t
woangl
[Link]
i
ncl
udei
nst
it
uti
onalr
elat
edmeani
ngofeconomi
cpl
anni
nganddev
elopmentr
elat
ed
meani
ngofeconomi
cpl
anni
[Link]
ormerconcepti
srel
atedwi
tht
heowner
shi
p
pat
ter
nofr
esour
ces.I
nregar
dtot
hisconceptf
orsoci
ali
stcount
ri
eseconomi
cpl
anni
ng
i
nthecont
extofpr
ivat
eowner
shi
piscont
radi
ctor kehot
yandl
i -i
[Link]
hem i
tis
pr
eci
sel
yfordoi
ngt
hingsdi
ff
erent
lyf
rom mar
ketmechani
sm t
hatpl
anni
ngi
sneeded.
Ont
heot
herhandnon-
soci
ali
steconomi
espl
anni
ngi
scompat
ibl
ewi
thanyi
nst
it
uti
onal
ar
rangement(
pri
vat
izat
ion,
li
ber
alcompet
it
ivemar
ketsy
stem et
c.)
.

Anot
her angl
e of concept
ual
i
zing economi
c pl
anni
ng i
sthe di
ff
erent l
evelof
dev
elopmentofcount
ri
[Link]
iouscount
ri
esadopt
ingpl
anni
ngar
eatdi
ff
erentl
evelof
dev
elopmentandhav
edi
ff
erentpat
ter
nsofdev
elopment
.Thedi
ff
erenceshav
eaf
fect
ed
deci
si
vel
ythepoi
ntofconcent
rat
ionofeconomi
cpl
anni
ng.I
ncaseofdev
elopi
ng
count
ri
esatl
owl
evel
s,i
nfr
ast
ruct
urali
nvest
mentget
stopr
ior
it
[Link]
hehi
gherl
evel,
the
pl
anni
nghor
izonwi
denswi
thchoi
cet
obemadei
nsucht
erm asaheav
yVsl
i
ght
i
ndust
ri
es,i
nvest
menton consumergoods orcapi
talgoods et
c.f
ordev
eloped
economi
esi
ncr
easi
ngf
urt
herconsumpt
ionl
evel
,adv
ancedi
nthet
echnol
ogyf
ront,
and
expandR&Dar
ethecr
uci
alconsi
der
ati
onoft
hei
reconomi
cpl
anni
ng.

Besi
det
otheabov
ear
gument
s,di
ff
erentaut
hor
sdescr
ibed economi
cpl
anni
ng i
n
v
ari
ousway
[Link]
hese:[Link]
thurLewi
si ThePr
n“ inci
plesofEconomi
cPl
anni
ng”
ment
ionsatl
eastsi
xway
sinwhi
checonomi
cpl
anni
ngcoul
dbei
nter
pret
[Link]
e;

Page13
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

 Town and count

ry pl
anni
ng – i
nvol
vi
ng geogr
aphi
calzoni
ng off
act
ori
es,
r
esi
dent
ial
bui
l
dings.

 pr
ogr
ammi
ngofpubl
i
cexpendi
tur
efordi
ff
erentt
imeper
iod

 Pl
anni
ngofpr
oduct
ion(howf
ir
msusedi
ff
erentf
act
orsofpr
oduct
ion)

 Pl
anni
ngwhi
chi
nvol
vesset
ti
ngoft
arget
sbygov
ernmentf
orpr
ivat
eorpubl
i
c
ent
erpr
ises

 Pl
anni
ngwhi
chi
ncor
por
atet
argetset
ti
ngf
ort
hewhol
eeconomy
.

 Pl
anni
ngwhi
cht
hegov
ernmentusest
otr
ytoenf
orceuponpr
ivat
eent
erpr
ises.

ThomasWi
l
sondescr
ibedgr
owt
hrel
atedmeani
ngofeconomi
cpl
anni
[Link]
dingt
o
t
heaut
hor“
planni
ngi
sanumberofconsi
stentandr
elat
edmeasur
esdesi
gnedt
ocr
eat
e
anenv
ironmentmor
efav
orabl
etogr
owt
h”or“
planni
ngi
nvol
vest
hepr
epar
ati
onof
of
fi
cial
progr
ammesi
nor
dert
ocont
rol
thepr
oduct
ionofev
eryi
ndust
ri
alent
erpr
ises”
.

Ev
eret
[Link] ment
ioned i
nst
it
uti
onalr
elat
ed meani
ng ofeconomi
c pl
anni
ng.
Pl
anni
ngf
oreconomi
eswhi
chr
esour
cesownedbyt
hegov
ernmenti
sunder
stoodt
o
r
efert
o“cent
ral
i
zedcont
roloft
heeconomy
”wher
easf
ormar
keteconomi
esormi
xed
economi
es,pl
anni
ng i
mpl
i
es “
the gov
ernmenthas or
gani
zed i
ts deci
sion maki
ng
pr
ocesssoast
otakeaccountofal
ltheeconomi
esef
fect
sofeachofi
tsact
sto
achi
evedasr
api
deconomi
cgr
owt
hasi
sconsi
stentwi
thot
hernat
ional
goal
s.

1.
5 TheNeedf
orEconomi
cPl
anni
ng

Pl
anni
nghasbeeni
ntr
oducedi
ndi
ff
erentcount
ri
esf
ordi
ff
erentr
easons.I
nsoci
ali
st
count
ri
es,wher
erev
olut
ionspr
ecededandpubl
i
cowner
shi
pofr
esour
cesf
oll
owed,
pl
anni
ngbecomesani
nst
it
uti
onalneedoft
hesy
stem.I
nnon-
soci
ali
stcount
ri
es,wi
th
pr
ivat
eowner
shi
p,sev
eralf
act
orshav
eini
ti
atedt
heuseofpl
anni
[Link]
heot
herhand
col
oni
zedcount
ri
esusedneedpl
anni
ngt
obeoutoft
hecol
oni
alsy
stem andt
oadopt

Page14
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

t
hei
rowni
ndependentsy
[Link]
tet
hel
argenumberoff
act
orscont
ri
but
ingf
ort
he
needofpl
anni
ng,
onecannev
ert
hel
essbr
oadl
yli
stt
hemaj
oronesasf
oll
ow.

I
. I
nst
it
uti
onal
Requi
rement

I
nanumberofcount
ri
espl
anni
nghasbeenmadeuseoft
omeett
hei
nst
it
uti
onalneeds
oft
hei
rpeopl
[Link]
anni
ngi
nsoci
ali
stcount
ri
esi
stoabol
i
shpr
ivat
esect
ors
/
owner
shi
p/i
nthe means ofpr
oduct
ion and i
tsr
epl
acementby publ
i
c/st
ate/
owner
shi
pandt
oinf
luencet
hechar
act
erofi
deol
ogyt
hathasi
nspi
tepeopl
eint
his
st
ruct
uralchangeofowner
shi
[Link]
heraspecti
frel
atedt
ocapi
talaccumul
ati
onA
soci
ali
stsoci
etywi
thoutpr
ivat
ecapi
tal
i
st,needspl
anni
ngt
odet
ermi
net
hepaceand
pat
ter
nofcapi
tal
for
mat
ionasperi
tsneed.

Thecount
ri
esf
reef
rom t
hecol
oni
aly
okehasbeenf
oundpl
anni
ngast
hemostef
fect
ive
i
nst
it
uti
onal
/medi
um t
oachi
evet
hei
rcommongoal
sandt
ohav
eabr
ightf
utur
e,wi
th
r
api
dindust
ri
ali
zat
ionandpr
ogr
essi
vegr
owt
hrat
[Link]-
soci
ali
stcount
ri
espl
anni
ng
i
simpor
tantt
oint
hecompet
it
iveeconomi
csy
stem.

I
I. Economi
cconsi
der
ati
ons

Pl
anni
ng i
s necessar
yto meett
he changes ofmoder
n economi
cs,t
o hel
pthe
ent
repr
eneur
s,t
ounder
takev
ari
ousdev
elopment
alact
ivi
ti
es,t
aki
ngi
ntoconsi
der
ati
on
t
heconst
rai
ntofr
esour
[Link]
herchangeofsi
gni
fi
cancei
sthei
ntegr
ati
onoft
he
v
ari
oussegmentoft
heeconomy
.Int
hisr
egar
dpl
anni
ngi
sessent
ialt
omaket
he
pol
i
ciesoft
hegov
ernmentr
ati
onalandef
fect
iveandt
onar
row t
hebi
gfunct
ional
di
ff
erenceofmacr
oandmi
cropol
i
ciest
hedev
elopmentofeconomy
.Besi
desi
nst
abi
l
ity
i
ntheeconomywhi
chi
sbei
ngcr
eat
edbydepr
essi
onandunequaldi
str
ibut
ionof
i
ncomeandweal
thcoul
dbecheckedbypl
anni
[Link]
ionaluseofr
esour
cescoul
dbe
madebyt
heuseofv
ari
ouspl
anni
ngt
echni
ques,suchascostbenef
itanal
ysi
s,i
nput
-
out
putsy
stem andot
herqual
i
ficat
iont
echni
ques.

I
II
.Technol
ogyConsi
der
ati
ons

Page15
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

Technol
ogi
esofmoder
nti
mesi
nvol
vesomuchexpenset
hatt
hei
rful
l
erut
il
izat
ion
r
equi
rest
hatt
heyshoul
dbeusedi
npl
annedway
.Duet
oacer
tai
npr
inci
palf
eat
uresof
t
echnol
ogysuchasi
ndi
vi
sibi
l
ityadj
ust
abi
l
ity
,pr
oductchangesandmasspr
oduct
ion
pl
anni
ng atanat
ionalscal
eisi
mpor
tantf
ort
hepr
operf
unct
ioni
ng ofi
[Link]
n
t
echnol
ogyi
snotv
ari
abl
eordi
vi
sibl
etosui
tjustanyscal
eofpr
oduct
[Link],
planni
ng
i
scr
uci
alt
oreapt
hef
ullbenef
it
sandt
oav
oidanywast
age,
tobecer
tai
naboutf
act
ors
suppl
i
esasal
sot
heabsenceofanyr
iski
nrespectofdemandf
[Link]
oper
pl
anni
ngi
simpor
tantt
omodi
fy,changeorr
epl
acecapi
talgoodsast
het
echnol
ogy
changesast
opr
ovi
def
astdepr
eci
ati
onofexi
sti
ngcapi
talgoodswhi
chi
snotr
elat
edt
o
t
het
echnol
ogi
calf
ixedr
ateofwear
ingoutov
eraf
ixedspanofl
i
vecapi
talgoods.I
n
addi
ti
ont
othesepl
anni
ngal
sonecessar
yfort
hef
oll
owi
ngi
ssuesf
ir
stpl
anni
ngi
s
i
mpor
tantf
ornew pr
oduct
stot
ake shape smoot
hes wi
thoutupset
ti
ng ex
ist
ing
pr
oduct
ivecapaci
tyt
omuch.I
tisnecessar
ytoal
l
owf
ort
imei
nthecaseofchange,
and
secur
it
yoff
utur
edemandf
orexi
sti
nguni
[Link]
y,modem t
echnol
ogyi
samass
pr
oduct
iont
echnol
ogy
.Under
taki
ngal
lal
l
iedact
ivi
ti
esofpr
oduct
ionsi
mul
taneousl
y
coul
d bebey
ond t
hecapaci
tyoft
heexi
sti
ng mar
keti
nst
it
uti
on,ev
en bey
ond t
he
admi
nist
rat
ivesetupoft
hecount
[Link],pl
anni
ngatanat
ionalorwor
ldwi
descal
e
t
hroughi
tsper
cept
ionofact
ivi
ti
escanpr
ovi
def
ort
hemul
ti
far
iousact
ivi
ti
est
oensur
e
t
hatt
hecostandt
hepr
iceofmasspr
oducedgoodsar
ekeptmi
nimum.

I
[Link]
erequi
sit
eforDev
elopment

Formanycount
ri
eswhet
hert
heyar
edev
elopedorl
essdev
eloped,dev
elopmenthas
beent
hemaj
orr
easonf
ort
headopt
ionofpl
anni
[Link]
anni
ngi
sneededt
oor
gani
ze
sur
plusf
ori
nvest
mentandmobi
l
izer
esour
cest
hrought
axes,i
nter
est
,pr
iceet
c.I
n
r
egar
dtot
hedev
elopmentaspectpl
anni
ngi
scr
uci
alf
ort
hef
oll
owi
ngr
easons.

 Pr
ovi
dingI
nvest
mentResour
ces:pr
ovi
sionofi
nvest
mentr
esour
cei
sthe1stand
f
oremostr
equi
rementofdev
elopment
.Pl
anni
ngi
sessent
ialf
ort
hisasmar
keti
s
notanadequat
einst
rumentf
ort
hispur
[Link]
einRodanhas
poi
ntedout
,“t
hepr
ice-
mechani
sm doesnotwor
kwel
linr
espectofamountand
composi
ti
onofi
nvest
mentwhenonei
sconcer
nedwi
thchangesi
nfi
xedcapi
tal
.”

Page16
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

Accor
ding t
o hi
m,i
ndi
vi
duali
nvest
mentdeci
sion mayl
ead t
o non-
opt
imum
al
l
ocat
ion of r
esour
ces because i
t negl
ect ext
ernal economi
es and
compl
ement
ari
ti
esofi
ndust
ri
es,
riskest
imat
edbyi
ndi
vi
dual
sisexagger
atedt
han
t
hatconf
ormi
ng an ov
eral
linv
est
mentpr
ogr
am and i
ndi
vi
sibi
l
ityofcapi
tal
r
equi
resbi
ggert
hansmal
l
.

 Or
gani
zingResour
ces:or
gani
zi
ngr
esour
cef
ori
nvest
menti
sani
mpor
tantf
act
or
f
ordev
elopment
.Hence,pl
anni
ngensur
esuf
fi
ciencyofr
esour
cesf
orpr
oduct
ive
i
nvest
mentandcol
l
ect
ingoft
heser
esour
ces.

 Bal
anci
ngTheEconomy
:Thebal
ancemaybephy
sicalandmonet
ary
.Phy
sical
bal
anceconcer
nsout
put
sandi
nvol
veconsi
stencyi
nthepr
oduct
ionofv
ari
ous
i
nput
s whi
l
e monet
ary bal
ance i
nvol
ves t
he el
i
minat
ion ofi
nfl
ati
onar
y and
def
lat
ionar
ysi
tuat
ionusi
ngd/
tmonet
arypol
i
cyt
ool
[Link]
anni
ngi
sal
soneededf
or
mi
nimi
zi
ng costand maxi
mizi
ng pr
ofi
tand f
ormaki
ng pr
oductofpr
ofi
t
maxi
mizi
nguni
tbyadopt
ingv
ari
ouspol
i
cies.

[Link]
anni
ngf
orDev
elopi
ngCount
ri
es

Duet
ospeci
alf
eat
uresofl
eastdev
elopi
ngcount
ri
es,pl
anni
ngal
sohasaspeci
al
i
mpor
tancef
ort
hesecount
ri
esont
opoft
heabov
ebenef
it
[Link]
ncl
ude:

 Remov
ingant
igr
owt
hmi
li
eu-Ther
ear
edi
ff
erenteconomi
c,soci
alandpol
i
tical
f
act
orst
hathi
ndert
heeconomi
cgr
owt
hofdev
elopi
ngcount
ri
[Link]
lthesest
ands
i
nthewayofdev
elopmentcanber
emov
edbyest
abl
i
shi
ngnow i
ndust
ri
esand
expandi
ng t
he ol
d ones,cr
eat
ing a smoot
h env
ironmentf
orf
orei
gn di
rect
i
nvest
mentandseal
i
ngupt
hesoci
alawar
eness.

 Ov
er-
Comi
ngSmal
lness-t
hesmal
l
nessmaybecr
eat
edduet
olow i
ncomesso
t
hatl
owdemandf
orgoodsandsowi
ng,smal
lgeogr
aphi
calsi
ze,hi
ghpopul
ati
on
gr
owt
horpauci
tyofnat
uralr
esour
[Link]
obl
emscanbesol
vedbypr
oper
pl
anni
ngst
rat
egi
es.

 Dev
elopmentofi
nfr
ast
ruct
ure–i
nfr
ast
ruct
ureont
elecom ,
hi
ghway,
urbani
zat
ion,

Page17
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

el
ect
ri
fi
cat
ionet
c-

 Publ
icent
husi
asm -pl
anni
ngi
nlesserdev
elopedcount
ri
esf
indf
ert
il
egr
owi
ngi
n
t
hemi
ndoft
hepeopl
[Link]
mpor
tantt
hingt
hatpr
ovi
desaf
ert
il
e
gr
oundf
orpl
anni
ngi
sthenewl
ygener
atedent
husi
asm oft
hepeopl
efori
[Link]
seei
npl
anst
hei
rdr
eam ofhi
ghst
andar
dofl
i
[Link]
shpr
oducesa
dy
nami
cfor
ceandani
mpr
ovementi
nthei
rwor
kingcul
tur
[Link]
enov
erl
ook
er
ror
sandi
ncompet
ence,t
oler
ancemi
stakesandwi
l
li
ngl
yaccepthar
dshi
psf
or
t
hesakeofbr
ightf
utur
e.

 Lar
geoppor
tuni
ti
es-Thepl
annerseei
nthepr
esentsi
tuat
ionofLDCs’
greatnew
possi
bil
i
tiesofgr
owt
[Link]
edgeaboutt
her
esour
cesandt
echnol
ogi
es
pr
act
icesi
nadv
ancedcount
ri
esi
sofconsi
der
abl
esi
gni
fi
cancei
nexpl
ori
ngand
t
appi
ngt
hei
rownr
esour
[Link]
eoppor
tuni
ti
esf
ordoi
ngbi
gthi
ngsl
i
ke
cr
eat
ionofnewf
act
ori
es,
highway
set
[Link]
ir
esi
magi
nat
ionoft
hel
eader
sin
t
hev
ari
ousf
iel
dofl
i
fe.

 Semi
-cl
osed economi
es -Si
nce LDCs’ar
e Char
act
eri
zed by
:semi
-cl
osed
economi
es,noni
ndust
ri
alandhi
ghl
ydomi
nat
edbyagr
icul
tur
alsect
[Link],any
f
luct
uat
ioni
nthef
orei
gneconomi
escoul
dn’
t’
inf
luencet
hem si
gni
fi
cant
[Link]
his
semicl
osedandsmal
leconomi
esi
tiseasi
erf
ort
hepl
annert
ofi
tthem i
ntopl
an
f
rame.

 Easi
er cont
roland r
egul
ati
on-pl
anned act
ivi
ti
es does noti
nvol
ve much
demol
i
tionofol
dact
ivi
ti
esast
her
eisnot
hingt
orepl
[Link]
des,
dev
elopmenti
n
t
hesecount
ri
esi
slar
gel
yint
henat
ureofgapf
il
li
ng,
i.
[Link]
ti
ngofnewi
ndust
ri
es,
const
ruct
ionofdamset
c.,wher
enot
hingexi
stedbef
[Link]
smakest
het
askof
cont
rol
regul
ati
onmucheasi
er.

1.
6 Requi
sit
esf
orSuccessf
ulPl
anni
ng

 Real
ist
icgoal
s-Thef
ormul
ati
onofobj
ect
ivesi
sthef
ir
stmaj
orst
epi
ndesi
gni
ng
agoodpl
anwhi
l
ekeepi
ngi
nvi
ewt
hepr
oduct
ivecapaci
tyofacount
ryapl
an.
Whi
l
ekeepi
ngi
nvi
ew t
hepr
oduct
ivecapaci
tyofacount
ryapl
anshoul
dbe

Page18
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

sucht
hati
tshoul
dbei
nspi
repeopl
etogi
vet
hebestf
ori
tsi
mpl
ement
ati
on
and compl
eti
[Link] goalshoul
d be compat
ibl
e wi
th each ot
herand
consi
stent
.

 Appr
opr
iat
epol
ici
esandi
nst
rument
s-I
tisessent
ialt
hatadequat
epr
ovi
sioni
s
made f
ort
he f
ulf
il
lmentofpl
anni
ng t
hrough appr
opr
iat
e pol
i
cies and
i
nst
rument
[Link]
i
ciesout
li
net
heact
ionandi
nst
rument
sar
emeanst
ocar
ry
outt
heact
ion.

 Adequat
eInf
ormat
ion-I
nfor
mat
iononv
ari
ousaspect
sofaneconomyi
sofv
ital
i
mpor
tancebot
hfort
hef
ormat
ionofpl
ansandt
hei
rimpl
ement
ati
[Link]
oper
ly
col
l
ect
edandsci
ent
if
ical
l
ycol
l
ect
edi
nfor
mat
ioni
sakeyt
othedr
awi
ngoft
he
t
ruepi
ctur
es.

 Rat
ionalI
nst
it
uti
ons-Ani
mpor
tantr
equi
rementf
orsuccessf
ulpl
anni
ngi
sthe
pr
esence ofsuch i
nst
it
uti
onalar
rangement
sthatar
e conduci
vet
othe
f
ormat
ionandexecut
ionofpl
ans.I
nst
it
uti
onsar
eofpr
imar
yimpor
tancei
n
t
hepr
ocessofcombi
ningr
esour
cesoft
hepot
ent
ialofacount
ryt
hatar
e
under
taken t
hrough human bei
[Link] or
gani
zat
ionalagenci
es an
i
mpor
tantonei
sthei
nst
it
uti
onsofpubl
i
csect
ors.

 Appr
opr
iat
e admi
nist
rat
ive and Techni
calAppar
atus-Thi
s compr
ises t
he
agenci
es,t
heper
sonnelandt
hepr
oducer
sandpr
ecedent
sfort
heef
fect
ive
oper
ati
onofapl
an,
theseagenci
esneedper
sonnelwhi
chshoul
dbeadequat
e
i
nper
for
mingt
hev
ari
ousser
vicesassoci
atedi
tpl
anni
ng

 Publ
ic-
Cooper
ati
on-The act
ivei
nvol
vementofpl
anner
s,admi
nist
rat
ors and
publ
i
cingener
alt
oimmensesi
gni
fi
cantasi
topenupmanypossi
bil
i
tiesand
smoot
hnesst
hepr
ocessofsuccessf
uli
mpl
ement
ati
onofpl
ans.

1.
7 CasesFor&Agai
nstPl
anni
ng

Casesf
orpl
anni
ng-al
lar
gument
sli
stedabov
e.

Casesagai
nstPl
anni
ng

Page19
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

Asat
oolpl
anni
ngcoul
dnotbear
emedyf
oral
leconomy
,soci
alandot
heri
l
[Link]
oadl
y
t
he l
i
mit
ati
on coul
d be on;concept
s,coor
dinat
ion,act
ion,f
oll
ow [Link] speci
fi
c
l
i
mit
ati
onsobser
vedonpl
anni
ngar
e:
i
. Pl
anni
ngheav
il
ydependsonr
eli
abl
edat
a.I
fther
ear
eno r
eli
abl
edat
a,t
he
pot
ent
ial
benef
it
sofpl
anni
ngwi
l
lunder
mined.
i
i. Thepr
obl
em ofdi
scont
inui
[Link]
anni
ngmodel
sdon’
tdealwi
thr
andom shocks
(
nat
uralhazar
ds,soci
alchanges,humani
nter
vent
ion)
.pl
answor
kef
fect
ivewhen
soci
alandeconomi
cdev
elopmentchangedcont
inuousl
y.
i
ii
. Thepr
obl
em ofuncer
tai
nty(
nat
ural
,mar
ket
,war
,int
ernat
ional
)whi
chhi
nder
sthe
successoft
hedesi
redgoal
oft
hepl
an.
i
v. I
nher
ent
lymar
keti
snoti
mper
fect
.Mar
ketcoul
dbeper
fectbymanmechani
sm.
Thus,
noneedofgov
ernmenti
nter
vent
iont
hroughpl
anni
ng.
v
. Costofpl
anni
ngadmi
nist
rat
ionandi
mpl
ement
ati
oni
nLDCsi
stoohi
gh.

1.
8 Shor
tcomi
ngsofPl
anni
ng

Ther
e ar
e many di
ff
icul
tsi
tuat
ions whi
ch ar
ise f
ort
he pr
operf
ormul
ati
on and
i
mpl
ement
ati
on ofpl
anni
[Link] pr
obl
ems v
ary dependi
ng upon t
he hi
stor
ical
si
tuat
ionofeachcount
ry,
andt
heai
m whi
cht
heysetbef
oret
hemsel
ves.I
ngener
alt
he
f
oll
owi
ngar
ethecommonpr
obl
emspar
ti
cul
arl
yfordev
elopi
ngcount
ri
eswhi
ch hav
e
t
obesol
vedbef
oreanymeani
ngf
ulpl
anni
ngi
spossi
ble.

 Unsui
tabl
eadmi
nist
rat
ionandl
ackofcompet
entper
sonnel
-pl
anni
ngneedst
he
Var
it
y of per
sonnel such as admi
nist
rat
ion, academi
cians, st
ati
sti
ans,
economi
stset
c.t
oreal
i
zet
hel
ongt
erm andshor
tter
m obj
ect
[Link]
er,
the
admi
nist
rat
iveandper
sonnelar
elar
gel
yincapabl
eunder
taki
ngent
repr
eneur
ial
act
ivi
ty,whi
chi
sver
ynecessar
yatt
hei
nit
ialst
agesofdev
elopmenti
nthese
count
ri
es.

 Lacks ofst
ati
sti
cs -t
o hav
e successf
ulpl
an r
eli
abl
e and qual
i
tydat
a or
i
nfor
mat
ion ar
ever
ycr
uci
[Link]
nthese count
ri
es t
her
e ar
e no adequat
e
st
ati
sti
ccol
l
ect
ingagenci
est
omakecompr
ehensi
vepl
anni
ng.

Page20
 DEVELOPMENTPLANNI
NGANDPROJECTANALYSI
S–I Debar
kUni
ver
sit
y

 Unsci
ent
if
icat
ti
tudes&i
nst
it
uti
on.–I
nvest
ment&economi
cfact
orscont
inues
t
obegov
ernedbyageol
dtr
adi
ti
onsandcust
omswhi
chobst
ructt
hef
ormul
ati
on
andi
mpl
ement
ati
onofsci
ent
if
icpl
ans.

Page21