Development Experience in South Asia

In recent years, there has been a great deal of discussion on the future role of development planning. In the late 1960s and 1970s, a number of eminent economists extended their support to the cause of development planning on the ground of “market failure†. State intervention was justified on the basis of the superior coordinating ability of the state. Of late, however, the interventionist policies have come under strong criticism. The critics of state intervention would seem to suggest, with varying degrees of emphasis, that the “market†left to itself would bring about a higher rate of development without any noticeable deterioration in the realm of equity. Their arguments are mostly based on the rapid growth recorded by the so-called Newly Industrializing Countries (NICs), particularly the East Asian NICs which have been often cited as examples of market-directed economies. It has been argued that these countries could bring about major structural transformation in a fairly short period by “keeping prices right†. But we are also aware of the role that state initiatives played in the development process of these countries. Apart from the cultural factors and the various conjunctural factors in both the domestic and external sectors of these economies, there were state interventions at strategic points encompassing monetary, fiscal, trade and industrialization policies with a view to formulating and implementing a coherent development strategy…