Full text: Study week on the econometric approach to development planning

I am glad that Prof. DorRFMAN raised the question of what is a 
« project », of what is to be understood by the description of a 
project. What kind of thing should be included in the project de- 
scription? In my mind there are certain things that can, without 
difficulty be included in a project description, and which can be 
specified without relating this « project » to other projects. 
The quantity of various types of inputs needed, in order to 
carry the project out, the distribution of these inputs over time; the 
capacity increase which the project will cause if accepted, etc., all 
these things can be specified perfectly well in the project description 
of this individual project. These data are more or less of the 
engineering kind. But there are other effects of the decision to 
accept a project, which can only be described by considering this 
project as part of the whole economy. Here is where the economist 
come into the picture. 
Some of these effects — particularly the indirect ones — are very 
difficult to trace. This is just the raison d’étre of the complete de- 
cision model. 
There are good effects and bad effects. You must define the 
preferences of the political authority before you can say what is 
«good » and what is «bad ». If you really want to go to the 
bottom of this description of effects, you will by necessity be led 
more and more in the direction of the global model which I pre- 
The operational significance of Professor DORFMAN’s scheme can 
possibly be best judged in terms of the amount and nature of factual 
information that would be required for its practical implementation. 
He proposes to derive the production function comprising all pos- 
sible input combinations that could be used for the manufacture of 
51 Dorfman - pag. 13

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