ASi" kUCTURE FlOR DEVELOPMENT

powerful minorities can capture thte process to the largely re-plicates historical allocations and does not
exclusion of others. Finally, local communities can- allow for increased emphasis on particuflar activities
not be expected automatically to take into account or the phasin out of others. In Cameroon, Nepal,
the environmental costs theyr impose on others, any and Zambia, transport sector allocations have emmore
than a private firmn would.
plhasized the construction of new roads over main-
Improving allocationstenance
budgetary
mpro
or rehabilitation- of existing networks, even
~~~~~~~~~~~~though
the latter is a dear priority.
*Decentralization and participation can be useful in- Comprehensive and centralied medium-term
*struments for overcom'ing market failure, particu- planning with strong backing from political authorlarly
when the public goods provided are local. ities was attempted in many developing countries
When the public goods are at the national level- dining the late 19550s; and 1960s, without conspicusay,
a highway network-the central government ous success. An excess of ambition spawned large
maintains direct involvemnent in allocating re- public projects, many of which remain a costly bursources
and in the planning and selection of proj- den for the economies concerned.
ects. The process and criteria underlying central In some.ewononuies, incuding many in East Asia,
governments' decisions on budgetary outlays for governiment dedisionmaldng of a more intermediate
national -public goods and for transfers to subna- nature has been practiced- In Japarn, Korea, Mablaytional
governments are described in this section. sia, Singapore, and Taiwan, China, authorities focus
Strategic and project planning are discussed in a on directing public expenditures and actively COOPlater
sectioni.
erate with a strong private sector. Flexibility and
In many developing countries, the baisic process adaptability to changing circumstances are characfor
allocating and controlling public funds for capi- teristic, with formial plans being indicative rather
tal investment and recurrent operations is often dif- than prescriptive. In Malaysia, governmentt decificult
to reconcile w.ithi professed development ob- sionmaking involves different levels of government,
jectives. An analysis of budgetary allocations in with each level focusing on those issues for which it
Uganda revealed that the budgetary process there is best qualified (Box 4.4).
Box 4A4 Centralized. and decentralized infrastructure planning in Malaysia
The Malaysian approach to inifrastructure planning jurisdiction over the selection of expenditure programs
blends centralized and decentralied forms. First, at the for the five-vear plans.
centralevel, national development objectives and tar- Trhe institutional framework for hinfrastructure develgets
are formulated by the National Economi c Council (a opmnent in Malaysia has been effective in ensuring tlhat
mfinisterial council chaired by the prime ministe) and public provision of infratructure has reflecte both
the National Development Planning Comumittee (coin- broad national priorities and local needs. infr-astructure
pose of top civil servants from federal ministries), rvso.a sufficient to sustain strong economic
Alongside -these two groups, the Economiic'Planning growth up to the 1980s.
Unit, located in the prime miinister's department, acts .as By that time, however, the emergence of strong pria
coordinating and hintgrting agency rather than an ini- irate sector capacity convinced the government thiat its
tiator of sectoral Plans_
direct involvement in some sectors and activties was no
Following. deflibertion by these two groups, the longer necessary Fresh approaches were also perceived
federal government's development policies and sec- to be desirable int dealing with gruwing hifrdstructure
total priorities are conveyed to mndilstries, statutory bottlenecks. The government responded flexibly to these
*bodies, and state governments, which are then invited changing circmstances, placing hinfiastructure sectors at
*to submi't their programs for the next five-year plan. the forefront of its privatizatian program". To date;
This second stage constitutes the' dE-centralized ap- eighty-five projects have been partly or completey prdproach
to planning. Agencies that are located, in the vatized, indluding the 900-kilometer North-South Hfighstates
are required to discuss their development pro- way, the container termtinal, in Port Kelang, Telekom;
grams with the appropriate State Econom-ic Pang. Malaysia, and the National Electricty Board. The goviUniit
before submitting themn to the relevant federal erminents "Guidelines on PrivatiztioeC issued in 1935
miinistrv, This ensures that the state governments are and "PrVa1ization Master Plan" firmulated in 1939
aware. of the development. proposals of the. federal clearly confirm its view of infirastructure.prvatization
agencies operating withi.i their boundaries. Th N- yet another mneans to achieve. its underlying developtional
Developmrent-Planning Comm-ittee has ultimte ment strategies..
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