Ch.1.pptx

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Copyright © 2012 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter One
INTRODUCTION

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Development Planning
• Development planning is the scientific
management of resources for the purpose of
achieving definite targets or objectives within
specific period.

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• Development planning is the
instrument to define a country’s
future direction or destination.

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What is Planning ?
• In planning, we try to respond the three
basic questions:

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i. Where are we now?
• The present socio-economic status of the
country.(it requires to analyze the country’s
social and economic situation based on
reliable data and information.)

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ii. Where do we want to go? What do we
want to achieve ?
• The medium-term goals/objectives, a clear
goal and objectives of the government needs
to be spelled out , based on the long-term
vision of the country.)

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iii. How can we get there?
• The strategy to achieve including policies
and programs. (It requires analysis of the
options available to achieve the objectives and
choosing the most appropriate and efficient
option. ) Moreover, it also requires to identify
the policies and programs that best suits to
carry out the strategy.)

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Why Planning?
• To know the best development strategy.
• To make priority based on their needs.
• Best use and better distribution of resources
and outputs.
• Efficient resource mobilization.

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Types of development Planning
Considering the time duration, it is three
types.
• Perspective or long-term plan (15 to 20
years period)
• Medium term plan (3 to 7 years period)
• Annual Plan (1 year period)

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Components of Development Plan
• Statement Vision
• Statement Goals/ objectives
• Macro-economic Framework (Targeted
growth rates of various economic sectors,
Investment requirements and source of funds
to achieve the targeted growth rates.
• Strategies
• Priorities

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• Programs/Projects of various sectors
• Allocation of resources.
• Implementation Mechanisms
• Monitoring and Evaluation Mechanism, and
• Expected Output/Outcomes.

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Success of a Development Plan depends upon:
 Setting objectives.
 Appropriateness of policies and strategies.
 Adequacy of data and information.
 Realistic targets and projections.
 Proper understanding of needs
 Provision of resources
 Human resources.
 Appropriate organizational set up and
administrative arrangement.
 Effective Implementation.
 Effective monitoring and evaluation mechanism.

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Planning Process
1. Traditional Approach:
• Basically “top down”- little involvement of
stakeholders and beneficiaries.
1. New Approach:
• A participatory and more “bottom up”
• Local, Provincial and National Level Consultations
• More inclusive participations: gender, ethnic
groups, Dalits, Madhesis, disabled, youth, political
parties, development partners, NGOs/INGOs etc.

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Different prospective role of state
1. Liberal prospective ( Capital economy)
• Right of individuals to life, liberty and property.
• Market driven economy / Free market.
• Limited state- That state governs the least.
2.Marxist prospective (Socialist economy).
• State-owned economy where the government plans the goods and
services that a country produces, the quantity that is produced, and the
prices as which they are sold
• Planned economy in which resources are allocated by need. Governments
allocate resources for “the good of society”
• The spread of wealth and income is more equal.

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3.Mixed economy.
• An economic system that features characteristics of both capitalism and
socialism.
• A mixed economy is an economic system that is variously defined as
containing a mixture of markets and economic planning, in which both
the private sector and state direct the economy; or as a mixture of public
ownership and private ownership; or as a mixture of free
markets with economic interventionism.

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Different development planning approaches
• 1.Economic growth approach.
• Economic growth refers to an increase in a country's ability to
produce goods and services.
• The advantage of economic growth is that an increase in real national
income allows more goods for consumption.
• To generate output, inputs were necessary, namely, labor, land, and
capital.
• Increasing inputs would generate increased output.

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Growth targets in Plan (e.g)
Indicators Status of FY2012/13 Targets
Annual average economic growth rate (%) 3.6 6.
Annual average agricultural growth rate (%) 1.3 4.5
Annual average non-agricultural sector growth rate (%) 5.0 6.7
Annual average growth rate in employment (%) 2.9 3.2
Life expectancy at birth (in years) 69.1 7 71.0

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2. Strategic planning approach
• Strategic planning is setting goals, determining actions to
achieve the goals, and mobilizing resources to execute the
actions.
• A strategy describes how the ends (goals) will be achieved by
the means (resources)
• Strategic planning is an organization's process of defining
its strategy, or direction, and making decisions on allocating its
resources to pursue this strategy.
• It may also extend to control mechanisms for guiding the
implementation of the strategy

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Strategic planning approach (e.g)
• Long-Term Vision : To upgrade Somaliland from a least developed to
a developing country by 2030.
• Objective : To bring about a direct positive change in the living
standards of the general public by reducing the economic and human
poverty in the nation.
• Goal : The main goal is to decrease the proportion of the population
living below the poverty line to 20 percent.

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3. Top down approach
• Coming from or directed by those of highest rank.
• Top managers provide guidelines, information, plans and fund processes.
• Top down” approach tends to centralise decision making.

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4. Bottom up approach.
• This is “Grass roots” development approach.
• The aim is to lift people out of poverty by helping them directly.
• Helping them to help themselves. Local involvement in the decision
making process.
• Identifying their needs and deciding on the most effective solution.

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5. Participatory development approach.
• Participatory planning emphasizes involving the entire community in the
strategic and management processes of planning; or, community-level
planning processes, urban or rural.
• Participatory planning aims to harmonize views among all of its
participants as well as prevent conflict between opposing parties.
• Marginalized groups have an opportunity to participate in the planning
process.

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6. Export led growth approach.
• Economic growth through the production and export of
products which the country has a comparative advantage
at producing.
• This approach adopted by many East and South-East
Asian countries particularly successful in Taiwan.
• There can be significant state involvement in the form of
investment, subsidies and protectionist measures.

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7. Import substitution approach
• Production of products domestically instead of import of products.
• Subsidies and protection of domestic industries from foreign competition
and tariffs and non-tariff barriers reducing imports.

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8. Foreign Direct Investment approach.
• Encourage foreign companies to locate in the country to stimulate
economic growth.
• The foreign companies would provide the investment the economy needs.
• Policy encouraged by the World Bank. Particularly significant in extractive
industries such as mining and oil where the initial costs are very high.
• Some protection of domestic industries needed.

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