Transcript 07-Decentralised_planning

Proutist Economic Development
Decentralised Economic
Planning
Dr. Michael Towsey
 2004 Proutist Universal
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Decentralised planning
1.
Decentralised economy requires decentralised planning.
2.
Planning starts from bottom up.
3.
The block is the smallest unit of Proutist economic planning.
4.
First step: identify blocks, natural economic communities
consisting of 100,000 to 250,000 people.
5.
Block > District > Nation
Guarenas > Miranda > Venezuela
6.
There should be provision in constitutions, such as the
Venezuelan constitution, for the importance of block level
planning.
7.
Trickle up development vs trickle down.
Dr. Michael Towsey
Proutist Universal
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Trickle down development
The theory goes:
• Increase the income of the rich who know how to create
wealth.
• The wealthy will invest their extra accumulated income as
capital to generate more wealth.
• This creates jobs and more demand.
• Prosperity trickles down to the poorer people.
Dr. Michael Towsey
Proutist Universal
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Trickle down ?
Dr. Michael Towsey
Proutist Universal
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Traditional socialist planning
• Intention was to distribute wealth more equitably.
• BUT emphasis was on large scale projects and
centralised planning.
• Centralised planning has never benefited people away
from the centre or at the periphery.
• Eg Soviet development under Stalin was built on slave
labour in prison camps.
• Communism is economic centralisation - in the hands of
a few.
• Capitalism is also economic centralisation - in the hands
of a few.
Dr. Michael Towsey
Proutist Universal
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Trickle up development
• Block level planning.
• Maximise production by decentralising production.
• Decentralise to point consistent with economic efficiency
and collective welfare.
• Adjust block level plans to coordinate with district and
national plans.
• Each block has its own developmental plan, adjusting with
overall plan of the socio-economic unit at various levels.
• Planning should be of ascending order - starting at the
block level to district to national - to include all the levels of
a socio-economic unit.
Dr. Michael Towsey
Proutist Universal
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Block-level planning boards
• Amount of natural and human resources varies from
block to block.
• Separate economic plans have to be made for each
and every block by a block-level planning board.
• Prepares a plan for development of the block and
implements local developmental programmes.
Dr. Michael Towsey
Proutist Universal
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Organizing blocks
• Blocks must not be demarcated on basis of political
considerations.
• Blocks should be scientifically and systematically demarcated
as the basis for efficient decentralized economic planning.
• Block divisions to be organized according to such factors as:
– physical features of the area (including topography, river
valleys, nature of the soil, type of flora and fauna, varying
climatic conditions, etc);
– socio-economic requirements and problems of the people;
– people’s physico-psychic aspirations.
Dr. Michael Towsey
Proutist Universal
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Intra- and inter- block planning
• Each block should be made economically sound so that
the entire socio-economic unit will be self-sufficient.
• This enables a country or federation to become
economically strong and developed in the real sense.
• Planning prepared for the all-round growth of a single
block exclusively = "intra-block planning".
• Cooperation among blocks is necessary.
• Planning among blocks = "inter-block planning".
Dr. Michael Towsey
Proutist Universal
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Inter-block planning
• Inter-block planning is an economic venture into some
selected fields to organize and harmonize socio-economic
development in a few adjoining blocks through mutual
coordination and cooperation.
• Deals with problems that traverse block boundaries and
cannot be tackled or solved by one block alone.
Dr. Michael Towsey
Proutist Universal
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Inter-block examples
• Examples include:
– flood control, river valley projects, afforestation projects, soil
erosion, environmental impact of development;
– establishment of key industries, water supply, power
generation, communication systems;
– establishment of an organized market system;
– higher educational institutions;
– etc.
Dr. Michael Towsey
Proutist Universal
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General advantages of
block level planning
• Easier to identify and understand problems of a local area.
• Fewer conflicts of interest.
• Local leadership solves problems according to local
priorities.
• Planning will be more practical and effective - to give
quick, positive results.
• Easier and faster to respond to new situations.
• Base for a balanced economy can be established.
• Can easily identify leakage of capital.
Dr. Michael Towsey
Proutist Universal
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Local advantages of
block level planning
• Local socio-cultural bodies play an active role in mobilizing
human and material resources.
• Development of local industries provides immediate
economic benefits.
• Growth of local industries creates greater opportunities for
people’s all-round advancement, because all their basic
needs are met.
• Local industries are the only way to provide local social
security.
• Purchasing capacity of local people will be enhanced.
• Unemployment solved more easily.
Dr. Michael Towsey
Proutist Universal
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Short and long term planning
• Short term plan:
– Focus: Labour intensive industry.
• Long term plan:
– Focus: Establish capital intensive industry.
• Goals:
–
–
–
–
Guarantee minimum requirements of the local people;
Eliminate unemployment;
Increase purchasing capacity; and
Make socio-economic units self-sufficient.
Dr. Michael Towsey
Proutist Universal
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Factors of planning
• When planning (eg an industry), consider four factors:
– Collective necessity – i.e. is there a local demand?
– Full costing of inputs – including externalities.
– Productivity – efficiency and local availability:
• build processing factories where raw materials are.
– Purchasing power:
• distribute sufficient purchasing capacity;
• real income vs nominal income;
• no leakage of capital.
Dr. Michael Towsey
Proutist Universal
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Community development
• Identify community needs.
• Always start from strength ... ... ...
• A successful project requires good governance.
• Good governance requires continued training and
education:
– Need to understand concept of conflict of interests.
– Accountability to fight corruption.
• No outsiders on local boards:
– Especially no money donors, central government officials &
project contractors.
Dr. Michael Towsey
Proutist Universal
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