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

illustration of these dangers. The objection to these measures 
is not that they are unduly authoritarian or unduly laissez faire, 
but simply that they are inappropriate to a system. They do 
indeed enable the country to muddle through, but at a con- 
siderable cost in bad business planning at home and loss of 
prestige abroad. 
Fourth, if we want to do away with sporadic interference, 
we must examine the robustness of the system in reacting to 
unforeseen events and try to build stability into it wherever 
we can. An example of such an administrative arrangement 
is MEADE’s proposal [25] to vary social security contributions 
automatically with the level of unemployment so as to offset 
short-term fluctuations in purchasing power. These devices, 
as PHILLIPS has emphasised recently [28] [29] [30], must 
be very knowledgeably designed, since a good control mechan- 
ism should keep a variable at a chosen level and not allow 
it to fluctuate. 
These problems are encountered in any system and there- 
fore in any economy, whatever its political complexion. 
A wider recognition of this fact may be expected to bring the 
operating characteristics of eastern and western economies 
much closer together over the next generation. 
I] Stone - pag. 26

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