CEPAL Review - Volume 1987, Issue 31, 1987

I should like to welcome all the participants in this Colloquium and, together with my colleague Alfredo Costa-Filho, say how pleased I am that, despite your many commitments, you have found the necessary time to be with us here in this meeting and to share with us your experience in your various areas of activity.

In its simplest expression, this document is based on three premises. The first of these is that planning is capable of playing a major role in consolidating the State, considered as the political manifestation of each Nation. The second is that this role may be shared out within the organizational or administrative structure of each State, and that it is desirable for it to be organized by a highranking institutional body, which, for the purposes of this document, will be generically termed the NPB or National Planning Body. The third premise is that the role played by ILPES in the near future — as at one and the same time a multilateral agency of the United Nations system and an intergovernmental agency— will have as its overall framework the priorities identified in the region in respect of the issues covered by the first two premises.

The Colloquium whose documents are presented in this issue of the R ev iew provided an excellent opportun ity to look at and discuss some of the aspects of planning theory and practice in mixed market economies, in search of new directions which could lead to more effective planning action to deal w ith the serious problems o f the region brought on by the international crisis. The debate was not easy, however, because the presenters adopted different systems of analysis: some took a general theoretical view, whereas others were more concerned w ith the specific contents of their proposals.

Any analysis of new directions for planning should not only point out the obvious shortcomings of free-market policies but also refer to the results of earlier periods of government interventionism.

The author begins by presenting a critical assessment of some aspects of what he refers to as the traditional perspective of analysis, which he feels has permeated virtually every facet of development planning. Some of these aspects are the shared understanding of problems, the search for optim al solutions, a reliance on abstract models, quantification and predictability, the possibility of determ ining objective truth and the assumption that time is linear and objective.

The crisis undergone by Latin America in the 1980s has been the most serious one to occur during its process of industrial developm ent, not only because of its intensity, but also because of the difficulties involved in designing and implementing options that might pave the way to solutions for the problems which originated it. The context of the crisis of the 1930s was entirely different: the region had only just begun its industrialization process, and the main body of problems at the time could not be attributed to industrial activity. Moreover, the self-contained nature of the economy insulated a large part of the population from the principal negative effects of the interrup tion of international trade and credit flows.

Enorm ous structural adjustm ents are needed in order to emerge from the crisis, and this makes it more vital than ever to think in the medium and long terms. The failure of the policies of the past has largely been due to their negligence vis-a-vis the future: negligence concerning income form ation unfavourable to investm ent and the creation of employment and price stability; negligence concerning deficits resulting in growing indebtedness; negligence concerning the lack of a systematic training and research effort; and negligence concerning the absence of institutions capable of ensuring the maintenance of the kind of intern ational economic order needed in a world in which the interdependence among countries has increased significantly.

In its article the author reviews a number of the main problems posed by long-range development planning and outlines his own views concerning them. He starts out by discussing the political aspects of planning and stresses that planning is part of a power-based decision-making process in which decision-makers’ mental images play an important role. His examination of the relationship between planning and them arket in mixed econom ies leads into a discussion of the “planning object” which, in the author’s opinion, should be regarded as a “multiorganization” composed of enterprises, political bodies, social organizations and movements, etc. In exploring the concept of the planning object, he identifies various types of economies (élite, formal and total) and the problems posed by each.

The belief held by some schools of thought that planning and the preservation of democratic freedoms are antagonistic has been refuted by a number of postwar capitalist economies. Their rejection of this argument would seem to have been based less on ideological grounds than on their need to achieve a degree of social, structural and spatial balance in the distribution of resources. In contrast, meanwhile, to the imperative character of planning in the controlled economies, the State has given an indicative orientation to planning in the market economies.

Using the experiences of Japan as a basis, the author examines a number of today’s major planning issues. He begins by outlining the characteristics of planning during and after the war, when the State exercised considerable control over the economic process. Once this period had passed and the functioning of the market had been re-established, the complex State/market relationships characteristic of all mixed economies emerged. Both the State and them arket have important roles to play, and each influences the other. The economy as a whole has objectives it must meet in order to provide satisfactory conditions for its members, but these objectives are often contradictory; the main function of planning is to lend them greater consistency and efficiency from a strategic standpoint.

In a series of 18 propositions, the author discusses what, in his judgement, are the problems affecting planning and what decisions will have to be taken in order to deal with them . In his view, planning is an important dimension of the capacity to govern and, hence, its improvement can only be attained within the context of a general improvement in the capacity to govern. To this end, the author proposes a selective and radical strategy for achieving major advances in a few crucai components of the decision-making process.

The author contends that the analysis of development has now entered into a phase of perplexity and disillusionment. “Development” of a sort has taken place, according to conventional statistical indicators, but seem s to have reached an im passe. Neither collective nor professional agents have consistently played the parts assigned to them in the 1950s and 1960s.

In the first half of the 1960s, a planning orientation began to develop in Latin Am erica which came into extensive use in a number of the countries in the region. The author contends that because of this orien tation’s utopian voluntarism, economistic reductionism and form alism, it was not really very useful for public policy management and its impact on actual decision-making in these countries was generally very lim ited. However, independently of these experiences to a great extent, national decision-making processes were developed in various countries of the region as a function of the political schemes supported by the dom inant social groups in these societies which can be regarded as genuine examples of capitalist planning.

The 1980s have been a time of important change in Latin America. The international crisis, on one level, and progress towards democracy, on another, are two of the phenomena having far-reaching effects on the region which are simultaneously imposing constraints and exerting pressure on the future course to be taken by the Latin American societies.

The issue of the relationship between planning and the market has given rise to fruitless theoretical contention over the relative merits of central planning versus a laissez-faire market. At the practical level, this disagreement has manifested itself in sharp swings in policy, which at times have favoured State intervention while mistrusting private enterprise, and at other times have curtailed State action on the grounds that it is inherently ineffective and inappropriate. The author argues that one of the major lessons to be learned from the region’s postwar economic experiences is that a correct balance must be struck between the market and State action on the basis of an objective analysis of the strong and weak points of each.

The comprehensive planning of a government’s actions is useful only if it takes the form of a calculus which precedes and then provides for the monitoring of these actions so that day-to-day planning tasks become part of a practical process. The author asserts, however, that in the processes of government seen in the Latin American countries, a considerable gap generally exists between such plans and the actual process of discussion and decision-making which guides government action.

The crisis affecting the countries of the region has heightened the demand for effective management in the public apparatus, as well as in the private sector. In addition, the recent move towards democracy in Latin America and the Caribbean is creating a need for specific types of effective management. In view of these demands, some questions have been raised as to whether or not the region’s present managerial capacity is capable of meeting these requirements in the situation as it now stands.

The State has always been dealt with in a somewhat paradoxical manner in the writings of ECLAC; it is regarded as a decisive agent in the formulation and application of development strategies, but its true, changeable, nature is not analysed in depth. This paradox has been resolved by assuming the existence of an ideal planning and reformist State which would fully perform the function assigned to it.

The 1980s have witnessed a strong revival of interest in the role of the State in the economic development of the Third World in general. In the case of Latin America, the debate has centered on the question of the role of the State in strategies for overcoming the imbalances and other factors holding back development. In the course of this debate, however, several related but distinct sets of issues have become intermixed in a manner which has proved to be highly unproductive. These issues must therefore be disentangled before sense can be made of the debate.