1240
PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA -
income per head of the two poorest, and so on, has a certain
appeal. To the mathematician other formulations may be more
attractive, such as a welfare function depending on national
income and (negatively) on the standard deviation between
regional incomes per head; or a weighted average of the per
capita incomes of regions as a welfare criterion, where the
weights may be indicative of the importance attached to raising
the particular region’s income they refer to. Of course there
must also be a dynamic aspect to the welfare function, that is
that future incomes also influence it. We may take care of that
aspect in the macro phase of planning, however, and use re-
gional welfare distribution in the annual plans only.
As for the means of development policy we may think of
a wide variety again, from very few up to a large number of
them. We may also think of intermediary targets temporarily
considered as means. It is customary to think of investments
in a number of sectors as means in this sense; the main problem
being in which sectors and in which regions to take them so
as to serve the aims of the policv chosen in the best wav.
IT. For practical purposes development policy planning
will often have to be undertaken in successive steps (stages) [5].
We assume that in a macro stage the rate of development
and the corresponding volumes of total investment have
already been chosen for a series of years. We now con-
centrate, in another step, on the distribution of this investment
volume over sectors and regions. We assume that the welfare
criterion is a weighted sum of regional incomes. For the time
being we disregard economies of scale. Each international sec-
tor is eligible for an additional investment of standard size (say
one million currency units). Moreover, such investment can be
made in any of the R regions. After it has been chosen in re-
gion 7, it will require additional investments in regional and
national sectors. The former must take place in the same re-
gion ». The latter may again be undertaken in anv of the R
18] Tinbergen - pag. &
