Social Scientist. v 4, no. 43 (Feb 1976) p. 18.


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18 SOCIAL SCIENTIST

Two basic criticisms of this approach must be put on record. First, nowhere are the basic economic and political constraints to the development, in the context within which project selection is to take place, made explicit. Instead, a vague "bottom up" procedure for quantifying various national parameters is suggested. Secondly, no rationale is given as to whether some or all existing constraints are to be regarded by the project evaluator as immutable. SDM frequently suggest that project evaluators confront policymakers explicitly with the alternative value judgments implicit in alternative decisions vis-a-vis projects. This seems rather inadequate, however, in a context where the network of economic and social relations systematically blocks the occurrence of changes conducive to economic development for the vast majority of the people. In such a context, the application of SDM's approach is likely to preclude the use of project evaluation as an instrument of economic development.

The approach to the specification of constraints at the level of project evaluation implied in SDM is a logical'outcome of the neoclassical approach which attempts to develop technical methods of marginal social engineering within a given and unquestioned framework of political and economic relations. The authors of Guidelines, it must be pointed out in all fairness, arc quite aware of this:

The scope of benefit cost analysis is inherently limited by its basic marginalism. At best, benefit cost analysis will raise questions about developmental objectives and institutional constraints whose implications extend far beyond the projects at issue. But the answers to these questions are to be found more in the distribution of economic, social and political power than in any analytical technique.29

The caveats, however, are an altogether too easy escaps from real issues of economic development with which even a technocratic approach (or perhaps especially a technocratic one) should be concerned. The need to analyze the real constraints to investment, to identify the precise economic and social-political forces that provide and perpetuate these constraints becomes inescapable.

1 M H Dobb, An Essay on Economic Growth and Planning, Monthly Review Press, New York 1960.

2 I M D Little and J A Mirlees, Project Appraisal and Planning for Developing Countries, New York 1974; A K. Sen, P Dasgapta and S A Marglin, Guidelines for Project Evaluation, UNIDO, New York 1972; See also I M D Little and J A Mirlees, Manual of Industrial Project Analysis in Developing Countries, vol II, OECD, Paris 1968

8 For a simple but fairly rigorous treatment, see J Quirk and R Saposnik, Introduction to General Equilibrium Theory and Welfare Economics, McGraw Hill, New York 1968; for a more advanced treatment, see G Debren, Theory of Value, Wiley, New York 1959.

4 The term 'shadow prices' orginally comes from linear programming. Sec, among others, R Dorfman et al. Linear Programming and Economic Analysis, McGraw Hill, New York 1958.

B To keep our summary short, we have paraphased the authors, and not quoted them



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