A Question of Balance

1. Roles and Limitation of State, Market, and the Citizen

Sector/NGOS in Achieving Economic Development
and Poverty Reduction
2. Achieving the proper balance between private
markets and public policy is a challenge

Development Planning : Concept and Rationale

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The Planning Mystique

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 In the past, few doubted the importance and

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usefulness of national economic plans
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Nature of Development Planning
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Economic Planning – A deliberate and conscious

attempt to formulate decision
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Economic Plan - a document of government policy that

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shows on how resources will be allocated

Comprehensive Plan - an economic plan that sets
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targets to cover all the major sectors of economy

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Partial Plan – covers only the part of national economy

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Planning Process – procedure for drawing up and

carrying out a formal economic plan

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 Planning in Mixed Developing Economies
 Private Sector in mixed economies comprises:
1. Subsistence sector
2. Small scale
3. Medium size enterprise
4. Foreign owned enterprises
5. Larger domestic firms

Principal component of development planning in

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mixed economies

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a.) The government’s deliberate use of domestic saving

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and foreign finance
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b.) Governmental economic policy
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The Rationale For Development Planning

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1.) Market Failure – a phenomenon that results

from the existence of the market imperfections
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General Forms of Market Failure

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- Market cannot function properly

- Market exist but implies inefficient resources allocation
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- Market produces undesirable result as measured by

social objectives other than the allocation of resources.

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 Market and Government failure
-Government failure : Politician and bureaucrats can be
considered utility maximizer not public interest maximizer
-Developing countries tend to have both high market
failure and high government failures.

Resource Mobilization and Allocation – it refers to all

activities involved in securing new and additional
resources for your organization

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