DECISION RULES AND SIMULATION 
TECHNIQUES IN DEVELOPMENT 
PROGRAMMING 
HENRI THEIL (*) 
Nederlandsche Economische Hoogeschool - Econometyisch Instituut 
Rotterdam - Nederland 
NTRODUCTIG 
Many underdeveloped countries, all Communist countries, 
and some developed Western countries have their Economic 
Plans nowadays. Such Plans may differ considerably as to 
character and scope, but it is quite generally true that they are 
based on certain considerations as to the goals to be pursued, 
as to the relationships between certain noncontrolled key va- 
riables on the one hand and the variables controlled by the 
decision-making authority on the other hand, as to the impact 
of outside forces, and as to the likely development of such out- 
side forces over time. Given a number of assumptions one will 
arrive at a certain Plan, which specifies that this is to be done 
in year 1, that in year 2, and so on. In principle the Plan is 
optimal in the sense that it pursues the goals as well as possible 
subject to the constraints under which the economy operates. 
But there is the problem of uncertainty. The development 
of outside forces over time has to be predicted, which cannot 
(*) The author is indebted to Mr. J. Boas of the Econometric Institute 
Rotterdam, who carried out the simulation experiment described in Sec 
tion 6 
"71 Theil - pag.