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taining the scope and nature of a planning agency. Those on the left place a high value on planning, while those on the right give little, or no, or negative value, to planning. A potential positive aspect of planning, upheld by those who place a high value on planning, is that it leads to greater economic stability. A capitalist system's main concern is with profi ts, not with consumption. Its focus on profi ts makes it highly unstable and subject to recurrent crisis. Planning can be used to dampen the unwanted gyrations in the economy stemming from a market system. On the negative side there is power and the threat of power that comes with planning. It is no accident that a centrally planned economy like the Soviet Union produced a Stalin. Hierarchy and power is part and parcel of the very nature of planning. Planners believe they know what is best for others and impose their will on others. Power, employed in planning under the rationale and guise of doing well for others, is an unwanted problem. Power is anti-freedom and addictive. A real risk of planning is that, without careful monitoring, it can easily get out of control and usurp freedom. In psychotherapy, they have found that human beings tend to blossom in relation- I NTEGRATED PLANNING ships that encourage them to fi nd and develop their own inborn potentiality, their own direction, and to discover their real selves and become authentic, independent, autonomous actors in the drama of life. The economy is a social system consisting of human beings in a nexus of social relationships. A government that promotes a healthy social environment Power, employed in planning under the rationale and guise of doing well for others, is an unwanted problem and refrains from interfering with the development and natural direction of social relationships by the imposition of its will is likely to reap the fruits of a more creative, a more productive, and more innovative society. There is a general human tendency and belief that once we understand the operation of any phenomenon we can then bring it under our conscious control for our own benefi t. However, there are some instances for which detailed conscious control may not be the preferred option. Scientifi cally, we might know all the intricate movements and the necessary coordination of the various muscles to lift a water glass form the table to get a drink of water, but would probably go insane if we had to consciously decide to do each and every step involved. The recent overall interpretation of planning by the West has been from a triumphant point of view. The west points out that the world has had a major social experiment in planning in the former Soviet Union and in other countries and that centralized planning has failed, especially in the areas of economic effi ciency and economic growth. A more nuanced THE INDIA ECONOMY REVIEW 19
P LANNING P ARADIGM view is the notion of convergence. The notion of convergence is that countries are becoming more and more alike over time, so that, the capitalist west is incorporating some planning aspects into their system, and the planned economies are becoming more capitalistic by incorporating market elements into their systems. There is little doubt that extensive centralized Soviet style planning is ineffi cient and dampens incentives to produce. However, the historical record seems to indicate that it is possible that planning, when used as an overall guide or as a general blueprint for the direction and coordination of an essentially market economy, may be helpful, or at least, not harmful, in facilitating the transition from a less developed to a modern economy. China is a case in point. South Korea and Japan are other examples in which overall planning were used in combination with the market in the development process. In terms of economic development it may be that there are different amounts and kinds of planning that are optimal for different stages of economic development. Perhaps at an initial stage of development, a lot of centralized planning may be helpful, but with further development, it needs to be set aside to allow markets to rule, but with further development, as economies become older and more mature, greater planning may once again be needed. In early stages of development, a planned economy may be helpful to jump-start the economy. Indeed, perhaps, limited human capital resources can only be used in an effective way by consolidating them in a planning agency. However, in later stages of development, a directed economy may retard eco- 20 THE IIPM THINK TANK nomic development as the economy now has a life of its own which is not given free reign to express itself when directions are given from above. However, once the planning authority or any agency becomes established in the government it becomes entrenched and is diffi cult to remove even when its functions become obsolete or dysfunctional. An analogous thing often happens in a relationship between a father and a son. In the father son relationship, when the son is a small child, there is an advice giving role adopted by the father and, at this stage of development, the advice that is given is really needed by the son. To take just one striking example, the son as a little child may be naturally attracted to the beauty of fi re but is unaware of the danger of fi re, so the father warns him not to touch fi re or he will get hurt. When the son becomes a young man, inappropriate continuance of the habituated advice giving role by the father can inhibit the independent development of the son and defl ect him from following the path he is inherently meant and destined to go. References and Additional Thinking • Chobanov, Dimitar and Adriana Mladenova. (2009). “What is the Optimum Size of Government”, Institute for Market Economics, http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf, June 2010. • Elliott, John E. (1958). “ Economic Planning Reconsidered”, Quarterly Journal of Economics, 72(1), pp. 55-76. • Friedman, Milton. (2009). Capitalism and Freedom (Fortieth Anniversary Edition), University of Chicago Press, Chicago. • Hauner, David and Annette Kyobe. (2008). “Determinants of Government Effi ciency”, IMF Working Paper No. 08/228, International Monetary Fund (IMF), Washington, DC. http://www.imf.org/external/pubs/ft/ wp/2008/wp08228.pdf August 2010. • Potts, Nick. (2001) “ Is it Time to Finally take Dr Kalecki’s Rational Planning Medicine?”, International Journal of Social Economics, 28(3), pp.667-680. • Rogers, Carl A. (1961). On Becoming a Person, Houghton Miffl in Company, Boston. • Sakharov, Andrei. (1990). Memoirs, Alfred A. Knopf, New York. • Vedder, Richard K. and Lowell E. Gallaway. (1998). “Government Size and Economic Growth”, Joint Economic Committee, U.S. House of Representatives, pp. 1-15, http://www. house.gov/jec/growth/govtsize/govtsize. pdf, February 2010. (The views expressed in the write-up are personal and do not reflect the offi cial policy or position of the organization.)
Page 1 and 2: THE INDIA ECONOMY REVIEW Volume VII
Page 3 and 4: IIPM: THE FUTURE IS HERE Since its
Page 5 and 6: CREDITS Founder Dr. M. K. Chaudhuri
Page 7 and 8: P LANNING P ARADIGM In the State of
Page 9 and 10: P LANNING P ARADIGM Almost all wond
Page 11 and 12: P LANNING P ARADIGM Central Agency
Page 13 and 14: P LANNING P ARADIGM paign in 1992:
Page 15 and 16: P LANNING P ARADIGM The Complexity
Page 17: P LANNING P ARADIGM future from the
Page 21 and 22: crises. This note contends that the
Page 23 and 24: proximately 25% of the then global
Page 25 and 26: process of economic growth. Newly d
Page 27 and 28: Japanese radio with one transistor
Page 29 and 30: I NTEGRATED PLANNING THE INDIA ECON
Page 31 and 32: in such times. The other institutio
Page 33 and 34: nomic planning had entered the lexi
Page 35 and 36: Entire network works out as a singl
Page 37 and 38: nomic order. In his infl uential 19
Page 39 and 40: I NTEGRATED PLANNING The experience
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Page 43 and 44: I NTEGRATED PLANNING Table 1: Centr
Page 45 and 46: macroeconomic environment and the p
Page 47 and 48: Prashant Singh Country Head - Direc
Page 49 and 50: But there lied the fault. The fi rs
Page 51 and 52: T RANSFORMATIVE PLANNING THE INDIA
Page 53 and 54: straining rules and institutions we
Page 55 and 56: tion and higher growth requires rap
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Page 59 and 60: Table 1: Plan Outlays and Expenditu
Page 61 and 62: The second revision lowered the wei
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P LANNING P ARADIGM Commission play
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P LANNING P ARADIGM Whither Economi
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P LANNING P ARADIGM achieving “mo
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P LANNING P ARADIGM Table 3 . Inves
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P LANNING P ARADIGM matic character
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P LANNING P ARADIGM Resource Data M
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P LANNING P ARADIGM Don't Throw the
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P LANNING P ARADIGM dynamic and the
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P LANNING P ARADIGM Commission from
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P LANNING P ARADIGM Commission has
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P LANNING P ARADIGM A Tale of Two C
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P LANNING P ARADIGM After the elect
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P LANNING P ARADIGM The Road to Pro
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P LANNING P ARADIGM rather through
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P LANNING P ARADIGM The road to hig
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P LANNING P ARADIGM From State to D
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P LANNING P ARADIGM began by taking
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P LANNING P ARADIGM leadership in B
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P LANNING P ARADIGM Unhealthy Plann
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P LANNING P ARADIGM made for enabli
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P LANNING P ARADIGM too failed. The
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P LANNING P ARADIGM quality of care
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P LANNING P ARADIGM 118 THE IIPM TH
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P LANNING P ARADIGM out of its reve
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P LANNING P ARADIGM Also, a good nu
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P LANNING P ARADIGM 124 THE IIPM TH
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P LANNING P ARADIGM sectors which a
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P LANNING P ARADIGM concurrent resp
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P LANNING P ARADIGM Is Big Dam a Pl
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P LANNING P ARADIGM dams in Arunach
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P LANNING P ARADIGM to enter on the
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P LANNING P ARADIGM Where's Natural
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P LANNING P ARADIGM tions there are
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P LANNING P ARADIGM livelihoods are
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P LANNING P ARADIGM Plundered Histo
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P LANNING P ARADIGM hierarchy of th
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P LANNING P ARADIGM the trend. Faul
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P LANNING P ARADIGM were employed.
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P LANNING P ARADIGM cies the govern
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P LANNING P ARADIGM the electricity
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P LANNING P ARADIGM start when cont
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P LANNING P ARADIGM Durg district.
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P LANNING P ARADIGM major provision
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P LANNING P ARADIGM image of their
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THE HUMAN FACTOR OTHER IIPM JOURNAL
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