University of Bristol

Department of Social Policy & Social Planning

MSc course in Development Administration & Planning

Name: Jos-Mara Tabern Abad

Essay Title: What do you consider to be the major constraints on effective planning in the developing countries? Which of these constraints can be overcome and how?. Module Title: Development Planning: Theory, Policy and Process. Lecturer: Pervaiz Nazir

Spring Term 1995

Development is a much more complex concept than was once imagined; there are no obvious answers to many of the most fundamental problems affecting the Third World1. Among the tools devised to solve these problems is Planning: a continuous process which involves decisions, or choices, about alternative ways of using available resources, with the aim of achieving particular goals at some time in the future2. This inter-disciplinary process entered into crisis from its very beginning: Soviet Union's 'planned economy' of the Gosplan, whose essential business was to create new industries rather than run them, chose to give immediate priority to the basic heavy industries and energy-production which were the foundation of any industrial economy. The drawback of this procedure was an enormous bureaucratisation and malfunction of the economic apparatus as well as other parts of the system3. As long as the economy remained at semi-subsistence level and had to merely lay the foundation for modern industry, this rough-and-ready system worked. In an economy isolated from foreign influence, command industrialization, with all its waste and inefficiencies, worked impressively4; things are different in the sophisticated labyrinth of modern, mixed economies.

The 'crisis of planning' unfolded during the 1960s, especially in the developing countries: The concern with economic objectives was manifested in a preoccupation with macroeconomic planning and to a lesser extent, with the planning of major economic development projects. The other important aspect of development planning at the time was its methodological approach. This approach could be criticized on a number of counts: Firstly, there tended to be far too much emphasis on simply writing 2

plans or vetting projects. This blueprint for the future, often incorporating totally unrealistic objectives, frequently became an end in itself rather than a means for achieving development. Secondly, such plans were rarely 'operationally oriented' and no real attempt was made to consider how they might be implemented. Indeed, the gap between planning and implementation was, and still is, one of the major shortcomings of planning in the Third World, and it is consequently an issue which has received significant attention in recent years. Thirdly, many economic development plans were excessively rigid. Killick (1981) suggests that this may be counter-productive, if not damaging, to a country's interests if the government's ability to adjust and respond to changes in economic environment is impaired. He also argues that the need for shortterm economic management may not be adequately recognized if government is preoccupied with medium-term development planning. Fourthly, there were problems resulting from the nature of the relationships and the interactions that occured between the politician, the planner and the traditional administrator, what Seers5 termed 'the basic triangle of forces'.

This list of planning shortcomings, already detected over a decade of global steady economic progress, has grown bigger in the latter times because of the globalization of the economy and the various crises which have occured since the 1970s. The many practical problems facing the planner in the Third World -ranging from inadequate data to acute shortages of essential administrative resources to rapid internal and external political and economic changes- limit the extent to which any systematic approach to planning can be adopted.

Roughly speaking, there are internal and external constraints to planning. More specifically, in this essay I will attempt firstly to describe the major constraints on effective planning in the Third World at the organizational, operational and spatial levels of planning. Secondly I will review some empirical evidence gathered from the National Development Plan documents of a number of countries, namely Swaziland, Papua-New Guinea, Tanzania, Zambia and Pakistan. To conclude, I will suggest the possibility of overcoming some of the problems examined.

Internal and external constraints

An important part of planning involves forecasting, deciding what should be done and the sequence in which the various activities should be performed in order to proceed in a logical and orderly manner6. Thus modelling and forecasting occupy an important place in the planning process, being models idealized representations of real-world situations7. The concept of rationality is central to the notion of a cyclical planning process, which is founded in principles of reasoning rather than simply on emotions or guesswork. To be rational is necessary to be comprehensive. In the real world this is quite impossible. Rationality must inevitably be limited8. At the organizational level, it is especially important to take into consideration the political system in the country concerned (for example, the way in which political leaders come to power, whether it is one-party or multi-party system and the degree of centralization or decentralization), the political ideology of the government in power and

the social structure of the society. The situation in most developing countries is so different from that in the countries where many of the basic concepts and techniques of planning have evolved that one is forced on many occasions to question the applicability of these concepts and techniques9.

We can also distinguish two different aspects of planning organization: organizational structures and organizational procedures. The former refers to the division of labour into various tasks to be performed and the coordination of these tasks to accomplish the activity. The latter refers to the various administrative procedures which can be used to achieve either the vertical or horizontal coordination within an organization10. The organization of planning is an extremely complex affair because it involves coordination between so many different groups, each one with its own interests and priorities11. Planning and policy-making are not always clearly separable activities. The question of what is and what is not a policy issue depends very much on what sort of issues happen to be especially controversial, sensitive or 'political' in any particular situation12. So the division of responsibility between politicians, planners and administrators is a gross over-simplification of reality. Politicians often provide actual directives about alternative courses of action. The administrators involvement is very important because they are the people who will have to implement the plans and they are unlikely to be enthusiastic about the implementation if they consider the plans to be unworkable or undesirable13. The main role of the professional planner is to act as a coordinator, collecting and analyzing the information and proposals for action provided by the others, rather than actually making the decisions himself14. Professional planners are frequently

frustrated by what they often regard as 'political interference'15. Progress is also impeded by disorganized competition in some countries among more or less autonomous public and semipublic agencies and local, state and central governments for foreign exchange, local currency and other scarce resources essential for carrying out investment projects and programs16.

From the operational standpoint, Central planning agencies' credibility, impartiality and technical competence are likely to be questioned as a result of the power struggles over short-term practical issues. The consequence has been either giving up the quest for relevance to actual decisionmaking and taking refuge in the preparation of medium- and long-term plans for their own sake, or a concentration on providing technical support for short-term political decisions and the abandonment of any serious attempt at examining medium- and long-term development issues17. However, in most developing countries the basic weakness is not the absence of a comprehensive approach to development planning, but a shortage of soundly conceived projects. Most countries run into great difficulties, not in formulating over-all plans, but in preparing and carrying out projects and in operating them efficiently when completed. In part, this is because planners, who are mostly trained as economists, are better versed in the broader "macroeconomics" of model-building than they are in "micro-economics" of project preparation and evaluation18.

Unfortunately, it is all too often the case that technical sophistication assumes too important role in planning, and that the development and application of particular

techniques become ends in themselves19. In many Third World countries data problems are extremely acute and this factor, coupled with shortages of skilled manpower and resources, make it even more necessary to adopt a pragmatic approach. In advocating a rational approach to decision-making it is often all too easy to create the impression that both planning and decision-making should be viewed as objective, technical processes. This is a dangerous fallacy as it ignores the fundamentally political nature of the decision-making process20 as explained in the above organisational aspects. To devise 'quick and reasonably clean' methods of data collection is not an easy task since there are four general approaches: Natural resource surveys; collection of national statistics; social surveys for specific purposes; and participant observation21 all of which suppose many operational difficulties. Also the same data may have to be treated in several different ways, and that different kinds of data require different form of treatment22 adding complexities to the generally resource-scarce planning systems.

Again, political evolutions may affect development planning like in India, whose infirmities have arisen less from the deficiencies in the planning system than from a fading national consensus on development goals and a decline in the commitment of governments at the centre and in the states to substain the development process23.

Implementation is often regarded as something which is beyond the scope of planning or planners. However, this does not mean that planners can ignore the implementation stage24. Among specific operational limitations, we find that many times the main barriers to be overcome are the lack of capital stock both in quantity and quality; so the

development process would require the generation of adequate savings for rapid growth of investment. These investible resources would have to be found mainly out of growing incomes or external borrowing, as the average consumption levels are normally low25. Also the rate of increase of the population often proves to be much higher than assumed when drafting the Plans26. The centrality of capital goods and technology in the development process may result in contradictions, for whilst considerable growth can be achieved in the short run, it creates a dependence on the international economy dominated by the developed countries27; a strategy of development that relies heavily on imported technology can create a disjuncture between agriculture and industry, each one depending on the outside economy for its inputs for production28. The process of capital accumulation and transformation of the national economy may slow because the production of capital goods and equipment and therefore capital expansion takes place outside the national economy29, so affecting future operational results. Taking such problems into account, especially in terms of the choice of planning techniques and the operational aspects of planning does not prevent from being over-ambitious in expectations.

At the spatial level of planning, we have comprehensive national development planning, project planning, sectoral planning and 'integrated area' planning30. Ideas about what would constitute effective local level economic planning remain ambiguous31. Too much emphasis on projects tend to lead to a 'shopping list' approach to planning, in which plans consist of no more than lists of projects (especially capital projects) submitted by individual sectors, regions or other interest groups. Many national and, in particular,

regional and local development plans are like this32. Inter-sectoral consistency and spatial planning of infrastructure would continue to require effective forecasting of the development of the private sector of industry33.

Among the external constraints to effective development planning, international relationships between developed and developing countries34 play a particularly important part. The concentration and internationalization of capital at the global level make dependent development both a cause and consequence of the process of internationalization, charaterised by two facets: centralization and concentration in the one hand, and increasing though uneven penetration into various spheres of the global economy. The increasing domination of the world economy by different circuits of capital -productive, money and commodity capitals- can result in the incorporation of segments of the national and local economy hitherto unincorporated or only partially incorporated35. The 1980 report of the Brandt Commission adopted the view that continued interdependence between North and South is more or less inevitable but maintained that both parties can benefit fron this relationship. It recommended a number of measures-including more aid from the North to the South, improvements of the terms of trade and a new international monetary order- designed to improve the relative position of the South36. The deteriorating terms of trade make most developing countries heavily dependent economically on the North and also, through more subtle ties, socially and politically dependent37. Currency exchange rates, the formation and exclusion of trading blocks, international energy and financial crisis, even the role of the MNCs through which many international economic relations are mediated38 are

elements, among others, that inevitably affect effective planning. The current orthodoxy of the World Bank that 'comprehensive planning' has not worked39 is a clear example of direct external influences on the matter.

Empirical evidence

Factual evidence of the above elements can be found in several development plans: The Government of Papua-New Guinea identified a series of problems affecting the success in achieving its 1984 development objectives: a clear definition of the role of the public sector in development was required; co-ordination of national policy between central and operating bodies of government needed to be improved; management, planning and priority setting capabilities within departments needed to be improved to enable increased delegation of responsibility to implementing and sectoral agencies; manpower development programmes were required in the public sector; and personnel and general government procedures needed to be codified40.

The evaluation of Tanzania's First Plan indicated the following shortfalls: Crop husbandry, following the sharp change in market prospects; failure to generate industrial growth at the rates suggested in the Plan; growth in the construction sector was dissipated in rising prices; and overestimation of the rate of growth generated by the service sector41. Zambia's Second Plan was marked by difficulties compounded by the oil crisis, break-up of international monetary system, world inflation and recession and the consequent collapse in copper prices42. Also in Africa, Swaziland is part of the

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Common Monetary Area with the Lilangeni linked to South Africa's Rand at par. Thus changes in South Africa's economic performance and policies were of major concern for the Government of Swaziland43. The scenario of development achievements described in the Plan were based in the crucial assumption that the negotiations between the ANC and the Government would be resumed in 1993. In Pakistan, the dimensions of the First Plan were modest: it did not receive formal approval of the government until 1957, and never received full support till the new Government came into power. The financial resources available for development purposes fell short of expectations. Prices of exports, agriculture sector imports and cutbacks in allocations to the private sector severely affected Plan implementation, upsetting the cost calculation. Its Second Plan placed greater reliance on market mechanisms and fiscal and monetary policies, although identifying a delicate problem of balance in the decision concerning what share of production of goods and services should go to improve living standards, and what share be withheld to build up the nation's capital stock. It also took into account the problems of technical and

administrative feasibility. Third Plan was the first Perspective Plan as planners felt that five-year plans were inadequate as a framework for long-term growth. These Plans were successful even with the increases of population, defence expenditure, concentration of economic power and the traumatic separation of East Pakistan as internal events, plus the rise in energy prices and World inflation in the international scenario44.

Possible solutions

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Planning is itself an attempt to reduce uncertainity. The problem can be tackled firstly by looking at the sources of uncertainity and secondly by adopting a flexible approach. There are uncertainities about the general environment within which planning takes place -the world that is outside of the specific decision-making systems actually involved in planning, such as what changes will occur in the international economic situation. There are uncertainities also in what are termed 'related fields of choice' as well as about the appropriate value judgements, such as the preferences that politicians and the general public have with regard to different policy options45.

As people became aware during the 1960s that development involves more than just economic growth and that, in fact, economic growth may sometimes hamper the achievement of other goals -such as social equity- it became obvious that development planning must also adopt a broader approach. The scope of development planning should include more than just the economic aspects of planning46, thus taking into account political, social and physical environmental considerations as well as economic factors47. Even economists -a notably contentious tribe48-, agree that the project-byproject approach has serious shortcomings. Sometimes accompanied by economic policies intended to promote development, the approach is nevertheless characteristic of governments without a clearly defined long-term outlook. An Integrated Public Investment Plan starts with individual projects which are combined into sector programs and then into an investment plan for the public sector. As for comprehensive planning, without having first learned how to prepare and execute the two abovementioned

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methodologies, it has generally proved impossible for less developed countries to take on simultaneously the more difficult task of planning comprehensively for both public and private sectors49.

The changes involved in 'egalitarian' planning can be divided into three types: Firstly, there are changes in the development policies which provide the framework for planning. Secondly, there are changes in planning techniques. Concern with the distribution of the benefits -and costs- of development demands a new approach to the assessment of alternative development policies and programmes. Thirdly, there are changes in the organization of planning, emphasizing that an egalitarian approach to planning should involve greater popular participation in the planning process 'so that social choices reflect the needs and preferences of all social groups'50. Attempts to find more appropriate political and administrative systems, reform the educational curriculum, redefine standards for the provision of certain services, and encourage or revive traditional cultural forms51.

Comprehensive planning, a synoptic view of people, place and work52, entails ability to analize; selective involvement in, rather than isolation from the international economy, and for selective rather than no use of imported technology, which complements instead of constraining national development53,
means pragmatism.

Capital and skilled

manpower may be difficult to obtain54. Every effort to gather human and financial capital, plus realistic opportunism and real world analytic capabilities will result in improved development planning.

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ENDNOTES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. Conyers, D. (1994), p.37 Ibid, p.3 Hobsbawm, E. (1994), p.380 Conyers, D. (1994), p.46 Ibid, p.xv Ibid, p.7 Ibid, p.117 Ibid, p.68 Ibid, p.17 Ibid, p.185 Ibid, p.189 Ibid, p.16 Ibid, p.17 Ibid, p.14 Ibid, p.18 Waterston, A. (1969), p.90 Sagasti, F. (1988), p.435 Waterston, A. (1969), p.83 Conyers, D. (1994), p.83 Ibid p.69 Ibid, p.103 Ibid, p.110 Byres, T. p.108 Conyers, D. (1994), p.80 Byres, T. p.75 Ibid, p.76 Nazir, P. (1991), p.172 Ibid. Ibid. Conyers, D. (1994), p.11 Byres, T. (1993) p.103 Conyers, D. (1994), p.195 Byres, T. (1993), p.90 Conyers, D. (1994), p.33 Nazir, P. (1991), p.27 Conyers, D. (1994), p.35 Ibid, p.34 Nazir, P. (1991), p.34 Byres, T. (1993), p.90 Papua-New Guinea National Expenditure Plan (1984), p.39 Tanzania Second Five-year Plan (1969) Zambia Third National Development Plan (1967), p.208 Swaziland Development Plan (1993) Second (1960), Third (1965), Fifth (1978) Five-year Plans.

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Pakistan. 45. Conyers, D. (1994), p.70 46. Ibid, p.47 47. Ibid, p.48 48. Hobsbawm, E. (1994) p.274 49. Waterston, A. (1969), p.62 50. Conyers, D. (1994), p.50 51. Ibid, p.35 52. Ibid, p.54 53. Nazir, P. (1991), p.177 54. Conyers, D. (1994), p.84

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BIBLIOGRAPHY

1. Conyers, D. (1984) An introduction to development planning in the Third World. Chichester: John Wiley & Sons. 2. Hobsbawm, E. (1994) Age of Extremes. London: Michael Joseph Ltd. 3. Byres, T. (1993) The State and Development Planning in India. New Delhi: Oxford University Press. 4. Sagasti, F. (1988) National Development Planning in Turbulent Times. World Development, Vol. 16, No. 4. 5. Waterston, A. (1969) Development Planning: Lessons of Experience. Baltimore: The Johns Hopkins University Press. 6. Nazir, P. (1991). Local Development in the Global Economy. Hants: Avebury. 7. Papua-New Guinea: The National Public Expenditure Plan 1984/87. National Planning Office. Waigani 1993. 8. Tanzania Second Five-year Plan 1969/74. The Government Printer. Dar-es-Salaam, 1969. 9. Zambia Third National Development Plan 1979/83. Office of the President. National Commission for Development Planning. Lusaka, 1979. 10. Swaziland Development Plan 1993/96. Economic Planning Office. Mbabane 1993. 11. Second Five-year Plan 1960/65. Government of Pakistan Planning Commission. 1960. 12. Third Five-year Plan 1965/70. Government of Pakistan Planning Commission. 1960. 13. Fifth Five-year Plan 1978/83. Government of Pakistan Planning Commission. 1978. 14. Metra Consulting (1986). Handbook of National Development Plans. London: Graham & Trotman.

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