1242 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARTA -
2.
additive. This calls for much more complicated methods of
selection of the best set of projects.
The problem of distributing a given volume of investment
over a number of sectors and of regions also takes a different
mathematical shape when we adhere to the policy criterion
called the layman’s (cf. section 10). In the beginning of our
selection process we are now only interested in the poorest
region’s income; that is, our weighted sum takes an extreme
form, where all other regions have zero weights. After the
poorest region’s income has reached a certain level we change
the weights. Meanwhile we have already added to other re-
gions’ incomes, since as a rule each project bunch will add to
the incomes of several regions. With the changed weights our
preference for the projects not yet chosen may change. This
may make for diversification (that is, non-specialization in the
international sectors). We may have to stop our selection of
projects at the moment that all available capital has been used.
Up to that moment we have not only added, by our choice, to
the income of the preferred regions, the poorest, but also to
other regions’ incomes. It is not excluded that this « loss »
could have been less if we had chosen another order of selec-
tion. We only want to mention this point, but we are not going
to treat it.
Finally there are problems created by the time structure
of the investment program. The selection rules we have discus-
sed will not, as a rule, simultaneously exhaust the capital avail-
able in consecutive years. If this phenomenon assumes dange-
rous dimensions we are confronted with the problem of a va-
riety of scarce factors — not so far discussed in this paper —
requiring the introduction of shadow prices for these factors
or equivalent methods. It is beyond the scope of this paper
to deal with this aspect.
12. A few concluding remarks will be made on the organiza-
tion and procedure of regional development policy. These
18] Tinbergen - pag. 10
