ASi" kUCTURE FlOR DEVELOPMENT

powerful minorities can capture the process to the largely rwplicates historical allocations and does not
exdusion of others. Finally, local communities can- allow for increased emphasis on particular activities
not be expected automatically to take into account or the phasing out of others. In Cameroon,-Nepal,
- environmental the costs they impose on others, any: and Zambia, transport sector allocations have emnmore
than a private finn would.
phasized the construction of new roads over maintenance
or rehabilitation of existing networks, even
-Improving budgetary allocations - - . though the latter is a clear priority.
Decentralization and participation can be useful in-- - Comprehensive and centralized medium-term
struments for overcoming market failure, particu- planning with strong bacldng from political authorladly
when the public goods provided are locaL ities was attempted in many, developing countries
When the public goods are at the national level- during the late 1950s and 1960s, without conspicusay,
a highway network-the-central government ous success. An excess of ambition spawned large
maintains direct involvement 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 econories, including many in East Asia,
governments'. decisions on budgetary outlays for government decisionmaking of a more intermediate
national public goods and for transfers to subna- nature has been practiced. In Japan, Korea, Malaytional
govemments are described in this section. sia, Singapore, and Taiwan, China, authorites focus
Strategic and project planning are discussed in. a on directing public expenditures and actively cooplater
section.
erate with a strong private sector Flexibility and
In many developing countries, the basic process adaptability to changing circumstances are characfor
allocating and controlling public funds for capi- teristic, with formal plans -being indicative rather
tal investment and recurrent operations is often dif- than prescriptive. In Malaysia, government decificult
to reconcile with professed development oh- sionmaking involves different levels of govenunentL
jectves. 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 44).
-Box t4
Centralized and&decenitralized infrastructure planing in Malysia
B6 4E =n plnnn -. Malaysia .-
- The Malaysian approach to infrastrcture planning jurisdiction over the selection of expenditure programs
-,blndscentralizedanddecentralizedforms.Frst, atthe' forthefive-yearplansr.-
'central level, national development objectives and tar- The institutional frameWrk for infrastructure develgets
are formulated.by chi National Econoic Council (a opment in Malaysia has been effective in ensuinng that
minister council chaired by the prime mnirster) and: public provision of inastructure has reflected both
the National-Development Planning Committee. (com- broad national priorities and local needs. Infrasucture
posed of top civil sevants fr.m, federl ministries). proviion was sufficent to sustain strong economic
Alongside these two groups, the Economic Planning growth up to the 1980s.
Uni, located in thie prime minister's department acts as - By that time, however, the emergence of strng pria
coordinating and integratig agency rather than an iu- vate sector capaLty convinced the government that its
: tiator of sedtoral plans. .: . : - direct involvement in some sectors and activities was no
Following deliberation by these two grups, the : longer necessarsy Fresh approacds were also perceived,
fedemal government's, development policies and sec- to be desirable in dealing with growing infrastructure
toral priorties are conveyed to ministries, sttutory bottlenedcs. The govenment responded flexibly to these
:bodies, and state governments, which are then invited changing cdrumsanc, placing infrastucture setors at
-to submit their pgrams for the next five-year plan.- the forefront. of its privatization progam- To date,
This second stage constitutes the decentralized ap- eighty-five projecs have been partly or completely priproach
to planiing. Agencies that are located in-the vatzed, induding the 900-kclometer North-South Highstates
arequired to discuss their development, pro- way, the containwr terminal in Port Kelang Telekom
grams with the appropriate State Economic Planning Malaysia, and the- National Electricity Board. The gov-
* Unit -- before submitting them to the relevant federal . enment's "Guidelines or Privatization issued-in 1985
.. ministry.This- ensures that the state govenments are and 'Privatization Master..Plar formulated in .1989
aware of the dvelopment proposals of the federal; dey confirm its view of inrstructure privatization as
*.- .agencies perating within- their boundaries. The Na- yet another means to achieve its underlying develop-
:--.tionalDevelopment-Planning Committee has utimate ment strategies. . -
79