Theory and practice of development planning - a critical appraisal

Helal Uddin Ahmed | Published: October 07, 2017 20:46:40 | Updated: November 11, 2017 12:40:46

Planning, Development and Management are key concepts in the field of Development Administration. In a developing country like Bangladesh, development is the ultimate goal of administration, and planning and management are the means to achieve it. This concept may be represented by the formula: 'Development is a function of planning and management'. However, this formula is over-simplified and the extent of correlation is influenced by a vast array of variables.

Planning in the context of development implies working out a scheme, method or design for the attainment of development objectives. Planning and management both emphasise the attainment of objective - planning by making advance preparations for action, management by organising, directing and controlling the implementation of action plans. As such, they may be treated as inseparable operations.

Planning is a conscious exercise in: (a) evaluating foreseeable alternative futures; (b) selecting one of these as target; then (c) working towards the achievement of set target.

HISTORICAL PERSPECTIVE: Planning takes place everywhere - at homes and organisations. But planning on a national scale is of recent origin. Historically, one would associate the concept of national planning with the emergence of socialist states in Eastern Europe. The first Soviet Plan was for the period 1928-32. Right from the start, the Soviet Plans covered all socio-economic activities of the nation. But nearly twenty years elapsed before any country outside the socialist bloc adopted national plans.

There was intense debate during this period on whether national planning was possible in non-socialist countries. France, where the controversy was at its highest, was the first country outside the socialist bloc to adopt national planning. The first French Plan (1948-53) was restricted to those aspects of the economy which had to be revived or re-launched after the Second World War. Thus, the plan dealt with power, steel, transportation, farm machinery, building materials, etc. It was in the second French Plan that social aspects were incorporated within the framework of national planning.

Since the 1950s, national planning had been a primary concern of the newly independent nations which were gaining freedom from colonial rules. Today, there is hardly any developing country that has not adopted national planning as a strategy for realising their development potential.

SCOPE OF DEVELOPMENT PLANNING: A nation has a broad range of choices as to how much of its socio-economic activities are to be brought within the scope of national planning and how much direction and control is to be exercised through it. A survey of the development plans of different countries would reveal that they fall mainly into four categories. These are: (a) Plans which deal with only government investments for providing infrastructure required for national development, where the private sector is allowed full freedom; (b) plans, which in addition to economic infrastructure, provide for social sectors like education, health, housing and social welfare, where the private sector is also allowed to operate on its own; (c) plans which provide for government participation in critical economic activities as well as governmental influence over the private sector; the private sector is encouraged, induced or directed in such plans to contribute its mite to the achievement of national growth targets through policies and legislative actions; (d) plans which deal with the entire socio-economic apparatus of the country and serves as a guide to development in all respects. There is hardly any private sector in countries where such plans are practised.

As regards the degree of direction and control exercised by a development plan, there are basically two possibilities: a plan can be imperative or indicative. In imperative planning, as one could find in socialist countries, a high-powered agency, such as the National Planning Commission determines targets, policies and strategies. They are implemented through government agencies by means of budgetary allocations and controls, and through providing directions to private agencies.

There is greater flexibility in indicative planning, and the targets are only suggestive by indicating the rate and direction of growth. The plan operates as a broad framework within which the producers are allowed freedom to grow in accordance with their own paces.

Indicative planning is in operation in many developing countries. The plans are not considered to be binding on either the public or the private sectors. The growing feeling among planners and administrators is that indicative planning is of limited use or value.

Combinations of indicative and imperative planning have also been attempted and the results were found to be better than those in situations of purely indicative planning. A greater share of imperative planning while maintaining the principle of mixed economy had been an important challenge faced by many developing countries in the past.

ARGUMENTS IN FAVOUR OF DEVELOPMENT PLANNING: The arguments that are usually cited in favour of short, medium and long-term development planning in developing countries are as follows:

n The need for planning arises because goods and services and the resources necessary for their production are scarce compared to demand for them;

n Development planning implies that the government has organised its decision making process so as to take account of all economic effects of its acts, the plan of action being a coherent one designed to achieve as rapid an economic growth as is consistent with other national goals;

n For developing countries where changes in the past have been slow, resources are scarce and attempts are made to achieve rapid transformation, the need for seeing that various government measures fit together sensibly and have the desired impact on development is very urgent. This compulsion prompts the governments to adopt development planning;

n Development and its paths are not as smooth or automatic as neoclassical economists would have it. In a developing country with imperfect markets and incomplete adjustments, it cannot be assumed that after an early rough ascent, growth trickles down and spreads among various socio-economic sectors. Market forces cannot be relied upon for optimal allocation of resources and acceleration of socio-economic growth-cum-justice, especially in developing countries;

n A principal claim made in favour of national planning is that it reduces the wastage of resources that takes place in an unplanned economy as a result of competition among different producers. In a planned economy, the needs of the society as a whole are given greater attention than the self-interest of those who own resources and invest in production. The government plays a central role in directing and controlling the use and investment of resources. The main purpose of such a role is to maintain a balance or equilibrium between various facets of the economy like production and consumption, savings and investment, supply and demand of manpower, public resources and private expenditures, etc. The effort to maintain balance and harmony among each of these pairs contributes to the consistency and coordinated interaction of economic variables. It is through such consistency and coordinated interaction that a planned economy minimises wastage of resources.

WEAKNESSES AND CONTRADICTIONS: Let us now analyse the weaknesses and contradictions observed in nearly seven decades of development planning in the developing world. These are sequentially presented below:

n Since the structure of economic resources, i.e. property relations determine the sources of power, aggregate planning becomes difficult because of limited ownership of resources by the public sector of a mixed-economy. In such circumstances, planning in a mixed economy can have limited sphere of influence as it influences only the public sector directly;

n Development planning implicitly assumes a social welfare function, which can be translated into aggregate and then sector-wise targets. Colin Leys has argued that there is no collective planning function. Instead, planning is done through a competitive process and the powerful interest groups often succeed in distorting the priorities in their favour. Since planning is not done in an unbiased and neutral manner, the planning decision may be contrary to the assumption of social welfare function;

n Concentration of development planning on macro targets, like growth, ignore the distributional aspects of wealth and resources;

n Development planning based on aggregate targets concentrates too much on measurable quantities, but often ignores the qualitative and institutional aspects;

n There is little scope for popular participation in macro-level development planning. Lack of commitment is observed amongst politicians and bureaucrats alike as planning remains more or less a technocratic exercise;

n Perpetuation of the dependency syndrome is observed as the general masses are not given responsibility in plan formulation or its implementation;

n As against imperative planning, most of the developing countries follow indicative planning, where there is no provision for penalties in case of major deviations. Many developing countries lack viable democratic institutions and consequently there is little or no accountability on the part of bureaucrats who do most of the planning and implementation. In the absence of political accountability, the bureaucrats feel free to have their own ways. The outcome may be unrealistic targets, conservative achievements and ultimately planned underdevelopment.

n It is often argued that planning is an exercise in idleness. It is more so when plans have medium or long-term dimensions. We live in a world of uncertainty, and it is absurd to take decisions holding so many variables as certainties and basing future plans on conjectures, statistics, hypotheses and projections, which are merely fragments of the whole truth. The worst part of it all is the assumption of a superior intellect who plans the future on behalf of others, does not allow the target group to participate in the decision making process, and passes on its decisions only for execution. Shorter term plans may be accepted as they are based on immediate and discernible realities, but to adopt far-fetched medium or long-term plans, and to mould short-term plans in conformity with longer ones appear to be quite unrealistic.

n It is also argued that development planning is a tool for a newer form of colonialism. Through this, the developed countries get the opportunity to extend their influence on developing states, and bureaucratic machineries with the colonial mould are provided the opportunity to control the socio-economic system. However, the bureaucrats do it with little regard for the welfare of the common man and do not hesitate to sell the future of the country just for the fun of it. Some of them find it interesting to play project-project game, use the downtrodden people as human guinea-pigs, and test their theories on economics and development mostly for name, fame or fortune. Development planning has provided those at the helm of affairs to play god with economy or development, and they find this alluring even at the expense of the community at large.

n In most developing countries, democratic political institutions have failed to get a foothold in the soil, and consequently the development plans are mere economic programmes with little or no political strings attached to them. This results in alienation, apathy and disaffection of the masses at large and a very slow rate of acceptance (sometimes even rejection) of the programmes. The ultimate result is often hardware with hardly any software attached to them.

Dr. Helal Uddin Ahmed is a retired Additional Secretary and a former editor of Bangladesh Quarterly.



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