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Indicative planning in developing countries


  • Balassa, Bela


Indicative planning which involves the establishment of sectoral targets which are not compulsory for the private sector and are embedded in macroeconomic projections that pertain to a period of several years. Indicative planning has been widely practiced in developing countries during the post war period. At the same time, the review of the experience of those countries indicates that it failedd to have favourable economic effects while utilizing scarce administrative resources. That lack of success of planning, together with the growing understanding of the importance of incentives and markets, have contributed to the decline of planning in the 1980s. THe question remains, then, what should the role of the public sector in developing countries be? Available evidence indicates the superiority of private enterprises over public enterprises. Nevertheless there is evidence that infrastructural investments favourably affect private investment. At the same time, such investments should be subject to rigorous project evaluation so that appropriate choices may be made among alternative investments. Thus the usefullness of planning re-emerges in the confines of public sector investment in infrastructure.

Suggested Citation

  • Balassa, Bela, 1990. "Indicative planning in developing countries," Policy Research Working Paper Series 439, The World Bank.
  • Handle: RePEc:wbk:wbrwps:439

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    References listed on IDEAS

    1. Krueger, Anne O & Tuncer, Baran, 1982. "An Empirical Test of the Infant Industry Argument," American Economic Review, American Economic Association, vol. 72(5), pages 1142-1152, December.
    2. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    3. Andrew M. Watson & Joel B. Dirlam, 1965. "The Impact of Underdevelopment on Economic Planning," The Quarterly Journal of Economics, Oxford University Press, vol. 79(2), pages 167-194.
    4. Thomas,Vinod, 1989. "Developing country experience in trade reform," Policy Research Working Paper Series 295, The World Bank.
    5. Laird, Sam & Nogues, Julio, 1988. "Trade policies and the debt crisis," Policy Research Working Paper Series 99, The World Bank.
    6. Romer,Paul M, 1989. "What determines the rate of growth and technological change?," Policy Research Working Paper Series 279, The World Bank.
    7. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    8. Hill, Hal, 1982. "State enterprises in a competitive industry: An Indonesian case study," World Development, Elsevier, vol. 10(11), pages 1015-1023, November.
    9. Nishimizu, Mieko & Robinson, Sherman, 1984. "Trade policies and productivity change in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 16(1-2), pages 177-206.
    10. Balassa, Bela, 1988. "Public finance and economic development," Policy Research Working Paper Series 31, The World Bank.
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    More about this item


    Economic Theory&Research; Environmental Economics&Policies; Health Monitoring&Evaluation; Poverty Assessment; ICT Policy and Strategies;


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    1. Planificación indicativa in Wikipedia Spanish ne '')


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