SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC.
guards he thinks desirable, he accepts the principle of consu-
mers’ sovereignty: this means that consumers may spend their
money as they please, and the economic system must try to
orovide the goods they want and not some other goods. Thus,
just as the initiative in model-building lies with the scientist,
so the initiative in formulating the objectives lies with the poli-
tician. But neither works on his own; each is dependent on
social acceptance and the cooperation of others.
The combination of a policy with a set of administrative
procedures, or what I have called controls, gives rise to a plan.
This is where the administrator, both public and private, co-
mes in. But he too may delegate his authority and indeed in
many cases must do so if the cost of basing all decisions on
sufficient information is to be minimised. The relationship
between centralised and decentralised decisions has been the
subject of recent papers by MALINVAUD 7231 and hv KORNAI
and LIPTAK [20], [21].
When the plan is put into practice it comes up against
svents and this gives rise to our experience of the part of life
with which the plan deals. As a result every element that
led to the plan may to some extent be modified. It is inconceiv-
able that initially we should have succeeded in building a
perfect model, specifying a perfect set of objectives or designing
a perfect set of controls. The possibility of these modifications
s indicated in diagram 1 by the feedbacks from experience to
theories, facts, objectives and controls, from which the effects
f experience spread to the model, the policy and the plan.
Of course this is a very simplified presentation of a very
complicated process. In fact, each stage in the process throws
light on the preceding stages as well as on the succeeding ones,
and each part of the system interacts to a greater or less degree
with most of the other parts, so that actually there is much
more feedback between the boxes than is shown in the diagram.
For example, the model is to some extent determined bv the
‘11 Stone - pag.
5
