Académique Documents
Professionnel Documents
Culture Documents
(REVISED)
ECONOMIC DEVELOPMENT
HOLLIS B. CHENERY
AND
ALAN M. STROUT
DEPARTMENT OF STATE
Washington, D. C.
(Revised)
June, 1965
PREFACE
Development.
The
or (c) provide
The
A.I.D. policy.
No. 3.
No. 4.
No. 5.
No. 6.
Washington, D. C. 20523
Page
I.
THE
TRANSITION TO SELF-SUSTAINING GROWTH
A.
B.
21
Figure 1
Table I
Table 2
Figure 2
C.
22a
22b
28a
29a
II.
II-i
11-7
II-
Table 7
Projections of Future Growth
Table 8
Figure 6
Table 9
Table 10
III.
11-2
ii-4a
II-6a
C.
32
37a
37b
40a
42a
44a
11-12
II-17a
II-18a
II-22a
Il-24a
III-i
III-i
Figure 7
III-2a
B.
111-6
C.
111-9
References
Annex B -
1, 2,
auid 3
increases
A crude measure of
Equally important is
skills.
in December 1963.
1/
Public
Private
Total
6.0
2.9
8.5
Private
The effect
theory of development.
degree
In each case,
the process
by which a tran
the scope of
To study
is
designed
to permit
assistance.
significant
amounts of external
the range of practical
I.
There is a
in which
there
social structure.
foreign assistance.
Th- attempt
Some of the
domestic factor.
The
put.
The second is whether countries which have achieved
an initial success
through external assistance .ill
take
I/
In criticizing the notion of "prerequisites" to
in the future.
available evidence.
A.
ability;
services.
Aggregate growth models for less developed countries usually
concentrate on the savings-investment limitation.
In
37 extended
time rate.
This type of
inalyzed separately.
Endogenous
(Uncontrolled) Variables
Vt
It
Gross investment
St
Et
Mt
Ft
assistance)
Ft
Ratio of foreign capital inflow to GNP ( )
Marginal savings ratel 2/
AV
Rate of growth of
..
nvestment
2/
inaicated by
"t, and
4t
10
(domestic and
The training of
11
accuracy.
of 20% per annum for a five year period, but none much
The
upper bound for this aspect of the skill limit would appear
This
Assuming for
12
(1)
k :
(2)
Vt
i=It
t-
Vt-1
-It_
It
+i) t
is therefore:
(4) vt= v
to "k;_
T=O
IT
increase in GNP.
= ki.
t-i
skill limit.
13
s o= +
(5)
&'
(Vt
-- Vo
FL = It
(6)
Since
It
0+
from (4),
I(I
[+
)t
ki (V
V ) + I0
i]
therefore,
The latter
giving Ft as
a function of Vt:
(7)
where F O = Io -
So
rate).
14
While external
the earlier
phase,
it
to long
which
exceptionai
portion of a country's
basis,
Furthermore,
is
apart from
2/
ci-rcumstances.-'
and ability
primarily by the
to mobilize current
of Latin America is
2/
Of the 31 countries analyzed in table A-2,only Israel,
the U.A.R., Tunisia, Chile, Bolivia, Jordan, Liberia,
Mauritius and Korea have recently
of external resources.
received a hi-gher
inflow
15
Lower targets
Higher
The
16
GNP in year
at the target rate
the year
P,
begin:
(8)
Vt = Vm(l + p)t-m
(9)
It = krV t
P:
(10)
F
where
at
and
St
t
Vt
Ft
Vt
the additioLI
I/
This model is essentially the same as that used by
Rosenstein-Rodan j5,167 to determine aid requirements.
17
to GNP
It is derived by substituting
(ii)
V t
kr
&' is greater
Vt
in(reiles.
If t"'e kr,
In the latter
18
generally low.
narkets.
:ries
The
is follows.
19
is:
(12)
Vt = V. (I
+ p)t-j
given by:
(1.3) ()
= 3 .j. +
11M
I (V -V.)
It
is assumed to be an instrument
the instrument
Et = E.(l
20
(15) Ft =
t - Et
M j +I'
(Vt
V.)
E. (+)t
gap determined
in
by (15),
foreign exchange
reserves,
is
needs.
an excess
of imports over
or some rela:ation in
In
the trade-limited
the effort
phase,
however,
capital inflow:
(16)
St =
It
Ft = k!Vt -
Ft
to this level
in
various ways,
Alternatively,
such as lower
reserves may
in
with less
GNP.
increase
in
capacity
21
The
B.
established.
income level the phases will succeed each other in the order
Savings-limited Growth;
Formulae for the length of each phase and the total aid re
quired will be developed on the assumption of this sequence.
22
In 1956,
of 4-5%.
By 1962, which is
paths,
gate variables
in the model are shown in Table I and plotted
in
Figure 1.-1/
following sections.2/
development policies.
in 1959/60 prices.
L. pp.7, 63; GNP measured at market prices.7
implicit in Table i.
values of
the variables rather than the actual magnitudes in
1962.
FIGURE 1
COUNTRY PERFORMANCE
COUNTRY PERFORMANCE
(A)
(D)
Phase
Phase
Q4
Phase
POTENTIAL
-mj
INVESTMENT
PhaseINVESTMENT
IT
IPOTENTIAL
SAVIN GS
SAVINGS
SAVINGS
.2
CV"
SAVINGS
oU)
z
.I -Projected
0
0................... Observed
(E)
j
IM TS
z
H
.2
o'*
a-.
IMPORTS -'
D
POTENTIAL
IMPORTS
.1
EXPORTS
.10
(C)
m(F)
L-L
I
TREOUIREMENTS
mUNREALIZED
~~A
oEXCESS
z
UNREALIZED
VIN
GSINGS___
IMPORTS
0
1.0
I
1.5
GNP (Vt/V o )
I
2.0
2.5
EXCESS
IMPORTS
I-I
1.0
I
1.5
2.0
GNP (\'t/Vo)
'
2.5
---
&aM
I-S gap
1.000
o -838
Investment
Potential imports
.: M-E gap
iii:Consumption
: Phase
erformance,
1.081
1.136
1.188
1.241
.138
.09T
.147
.i04
.153
.112
.16o
.121
A0l
A02
.168
.129
A0i
.04
.039
.032
.033
.122
.090*
.020
.032
.O*
76
.020
.032
-799
.91
.944
,I
''
1.041
.059
039"
75
.O-7*
!! 'Histrcal
NP rowth target and country
. high export growth
IN
G
Table Ii
.....
'' : "
?>, :
alpe
A-
159
-.
.983
-. 1
.1-19
.035
.036
1.024
II
1.o67
---2
03
1.112
II
1.296 1.355
1.416
1.764
.175
.134
.183,
.14T
.191
.200
.13 '
.135
.157
.034
.142
.167
.025
.03(
.038,
1.159
.036
.040
1.
A0l
.7.2-6
<
.220
.0A
1.-o
"I'I
III
TII
III
.o45
.5
.o45
.045
A05
A5
.o5
A5
Ao5
A5
A5~
A5
.0492
.Oh
.2
.o
.5
.0
,5
.Oh9
.45
.04
.5
1.39
1.19
1.5016
2.012
.127 .256
.172
.191
69
.191
.212
.059
III
Growth rates:
.Investment
FP
i Exports
Consumption
.021
.011
..
x.o
.o45
.045
,-.041
.015
.04
9
037
.049
.049
.xl
u
42
.0492
gcountry performance,
ih
P130
.045
ista65A5
A
exports
GNP,
.838
1,087
1.139
1.198
Investment
savings
Potential
Growth rates:
I-S gap
.059
.122
.138
.156
.199
.039*
.020
.090*
.032
.00
.10
.042
.176
.1.1
.052.
Potential imports
hExports
M-Egap
Consumption
.074*
.100*
.068
.032
.910
.10
.072
.032
.941
.109
.075
033
.054
.020
.-799
Phase
.038
.021
.130
.041
" Exports
.041
.049
Consumption
.015
.037
130
.19
.01
.120
1.264
.268
.039
.0
. .13
.064
.364
.334
.029
.976
.115
.079
.05
1.0
IA
IA
IA
IA
II
.044
.048
.052
.05
,0
.130
.130
.130
.059
,130
.060
.130
.071
.o6o
.0o
6
.060
.060
.049
.049
.09
.049
.049
.049
.049
.049
.0o49
.041
.040
.042
.047
.051
.052
.052
.053
.06
IA
Investment
GNP
1.041
1.000
.083
.036
1.060
.
.087
.039,t
1.112;
.091
.043
1.167
.135
.096
.046
1.2
II
.12
2201
.100
.ld
.04
.050
1.723
1.292
II
III
lI
.06
" Source: A.I.D., Office o Program Coordination, '237' ear Projections," machine listings of September 169 1964.
Up Larger iof -S r M-E has been underlined. Parameter values used were: (see lso Table A-2)
0.19
Ive1956-1962
196P-1975 ( Historical")
S
a1962-1975
("Upper limit2 )
te tia956
figures are trend
r "of
i0
.
.22
.085
.13
'
k.23
.256
.7
.19
.13
3.00
.060
t
The latest revision
.26
.210
.0
.0489
.10
.0289
.24
Pakistan
.14e
national accounts [a]
svings marginal
shown in savings
the planrate
1964/65
the marginal
1959/60.
For thelevel
period
and the incremental capital-output ratio, 2.8.
.; -gives
o195/
gOese
values.u.v
'"L
eed
196-192
.u.~
..
~0
.1
.04
23
two extreme sets of assumptions for Pakistan-- the"historical"
typical case.
Phase I:
Skill-limited Growth.
ability to
increase and utilize productive investment is
The length of
(17)
Im = kVm
(18)
Vm = V0
where
r o = Io/kV o
gives
24
rearranging
T' - krV
S I (I.+ i)1
(1+
!fl
:)"
:22
-0
kTV
i7m
M -('
ro
kr V
(-f-+
0 0
i-r
log (1 + i)
For the Pakistan examples, the increase is from
an initial investment rate of .06 in 1956 to a required
rate
6% growth.
becomes the gap between investment and savings and the more
25
Phase II:
Savings-limited Growth.
Phase II starts at
(a)
It ends when
V
p
m &
01
Ja
m)
-k
(21) (p
(p- m):
m) :log('
- k )
log (re'
)
log (1 + i')
is reached
the year at
26
trade limit.
case).
Phase III:
year
Trade-limited Growth.
With constant
Assuming
E (+
(22)
=
q
q -
-.
M.+
4'V.
______________
Vj(+E
(2 3)
( 1 +F) c'-
L*~
V/\l
trade gap is the limiting factor at the time when the target
27
111.
of
(14)
we
(24)
E ...
_. lEq
M.
IL(I)
L
U.
by the
The values of
c and
how
would not lead to convergence at
the 6% growth rate,
To eliminate the trade
ever,
even with the 5.8% export rate.
7.5% or
"j
form by
I/ Equation (23)
can be stated in a simpler of the
end
specifying the average import ratio at the
be used
then
can
expression
period, iq..
The following
of
+
(23a)
(1
-, )
En
"q
28
The total
capital required to
complete the transition
to self
sustaining growth can be determined
as
the sum of the
goes through.
In Phases
IA and II,
external capital is
savings.
are expressed as
a ratio to the initial
level of GNP (Vo).
that phase.
Table 2 also gives formulae
for cumulative
analysis is
to provide a measure of
the productivity of
(30)
enables us to
compute the total external
capital re
quired to sustain any given rate of
growth in GNP
so long
Table 2
Summary of Phase Fornlae for Foreign Capital Inflow (F.)
Foreign Caoital Inflo;
IA
F IV
.Invpstm-erft-
!Savings
Skill:
Io
( FVor
sit
t+l-1
F(l+i)
o ~
Ft/V 0 or
0mrs
ki s(26)
ISkills
Imports-
-T-
t/V 0
(27)
(8Exports
V,"In
(~ )_lj-
(28) Z
o Ft/Vo
(t
+ 1)
%
V
:.0
III
Ined
ve
able
esources
-~~~~~+
VIo
0tV
1-(+)(-'
0 0v =
I I
-- .. -
Fo+
I
'-)+
. ...
...
>t11
(1+C)
J-
o
(+-i)( I.
(l9t _
)
(o
~~~~~~(t+1i)
t+i-i(o_,
ii
t
I
'!)[i9t
(32)o F- tu/V
o
lJ
0
o
S er ic e s
) L J _ 0--F(1+e)
(+t
l+-r
FL+i
- ~V
:0)or
'/)
k_(+f)
k [
F /
/t
art s
Impoi
Exports
Ft/V o
(29)
Savings
V0
mort-ed
,I
Goods and
k'
V0
o(~
iV
7- +
V)
ca) 00+)c.
(t+i) (
(ie
G2..
i V0
Exors0
IB
-(t1)@I 1'.o'~~~~~]
+)
0,
+ 0
)t
'0(1
Savings or
Exports
Tnv-stm.nt cr
Lrpcrts
Grow-th
ConPhase saain
and Curm-lative
a'FI ~
oL
''
IIa
----
29
This result for the Pakistan case and the period 1962
1975 is shown as the curve'4 FSin Figure 2.
Equation
(32)
provides a similar solution for the cumulative gap
FF
-he effects
capital
composed of seg
about 4'%.
FIGURE 2
(Assumes "upper limit" country performance factors and export growth rate)
I
II
if =.13C
If - =
.08
1.4
(Phase I B)
CF
(Phase I A
1.2 -
1.0-
<
.8
a.
z
W
0
U-
.6
Lu
IUl.4
-j
.2
7/
-,PHASE
PHASE ]Z[I
II-n
S
s
Fs
-,,
-.2
.07
I .06
(058)
.05
.04
I
.03
I
2.0
1.8
1.6
1.4
FINAL GNP AS RATIO TO INITIAL GNP (Vn/Vo)
2.2
WHERE
n =13
2.4
YEARS
30
raise GNP growth above the limit shown in Figure 2, line B'
C' I/
Pakistan case is
capital
is
To determine
in
Phase
III than in
result,
phase II.
we can derive
in Table 2:
Phase II:
(33) d (Vt+l)
d (-FtS)
o'
Phase III:
(34)
d (Vt+)
d (7Ftm)
where
? (t+l)
The value of
31
Values of
t = 14
t =4
t = 9
.03
1.8
4.1
5.9
.05
1.8
3.8
5.5
.07
1.7
3.5
4.9
.10
1.7
3.4
4.4
equations (33) and (34) for Pakistan and for the median
9-year period:i/
Median Values
Pakistan
Phase II:
Phase III:
.47
.34
1.70
1.32
/
balance of payments limitation is binding.-
Over longer
c,
r
=
=
32
flatter.
is assumed constant.
The
The precen
or further assistance,
ore efficient.
33
We shall, however,
The recipient,
34
inflow it requires.
determined minima.
Similarly,
excess
imports will increase the need for assistance above
what would be desirable on other assuLiptions.
We shall
or eliminated.
reserves
to vary and concern oursel-es only with the cumu
lative values of all variables, over a planning period of
35
(35)
Z F sS
years.
as:
(36)
7 Ft
N and
in equations (13)
=
7 Mt -
Et
sequence of values
of Vt
(Pakistan,
Model 2:
36
determined.
The
conditions for
T Ft
(37)
Rt
z It + YEt
Et
tR
+ S _t
St
and Rt Erom
where
f' -I 0)
+0
V
0
I/
j+U'(Vt-Vj)
= Mo +
(Vt-Vc
37
In this formulation we assume that short-term
E Ft
(39)
1'17 Vt
Ft
(n+1)(t-oi')
- .
Et
Y Vt
FC t
(40)
(1-')
0
of model i
is
given in
At a constant
Further
removed, so that only Phase II and Phase III are shown.
more, foreign exchange reserve changes are assumed for model I
The
used for the rest of Table 3 and for the efficiency measures
FIGURE 3
EF'
1.4
1.2
MODEL 2
1.0
Z.m
.8
w
0
I
F-
EF
m
w -J
PHASE IH
PREDOMINATES INMODEL 1
PHASE II
PREDOMINATES IN MODEL 1
.2
MODEL 2
0
-.2
.03
Iv
.07
(058)
1.4
1.6
1.8
2.0
FINAL GNP AS RATIO TO INITIAL GNP (Vi./V
II
2.2
O ) WHERE
2.4
l=13 YEARS
38
Here
At rates
The difference
import requirements.
is
in model 1.
In Phase
an offsetting
iai
in savLLgs.
Table
Effects of Gap Eaualiation Policies
Line
I
2
3
Pakistan, 1962-19753-/
(All figures expressed as ratios to 1962 GNP)
Alternative Growth Targets
models)
1.468
(.03)
1.665
(.0)
1.886
(.05)
2.133
(.06)
2.410
(.07)
1.33
1.33
1.33
1.33
1.33
1.16
18.29
2.19
(2.29)
1.70
19.60
2.94
(2.60)
2.31
21.02
3.78
(2.94)
2.94
22.55
4.74
(3.31)
3.31
8
9
10
11
Imports: (Potential)
Imports: Realied
Excess Consumption
Excess Imports
(1.71)
1.71
.84
.0
(1.83)
1.33
.59
.0
(1.96)
1.96
(2.10)
2.17
.0
.07
(2.26)
2.76
.0
.50
12
13
.38
(III)
.50
(III)
.63
(III)
4
5
6
7
.0
.8s
(II)
GNP
Investment
Savings
Imports
18,
14.62
1.54
1.41
1.46
16.55
2.20
1.87
1.65
18.74
2.94
2.40
1.87
.13
.32
18.29
2.38
only
inpermitting that
variable GNP growth rate which
21.22
3.78
2.99
2.12
24.02
4.74
3.67
2.40
.54
.79
1.07
19.60
3.03
21.02
3.76
22
GNP
Investment
(% Investment in
Import Substitution)
Savings
19
20
21
17.09
1.81
(44%)
2.00
(24%)
2.29
(9%)
2.60
(-.)
2.94
1.43
1.76
23
Imports
1.14
24
-.20
.09
25
26
27
Cumulative Consumption
Model 1
Yodel 2
Model 3
15.93
13.21
15.09
16.60
14.68
16.00
Model
has the same growth
path as Model 1 and differs
investment.
22.55
4.58
(-Il0)
3.31
2.15
2.60
.43
.82
1.26
17.29
16.34
16.99
18.07
18.23
18.07
Model 1 is described in
equations 5, 8, 9, 11-15.
Realized savings or
imports are equal to potential
savings or imports (eqs. 5
capital is sufficient to
gaps.
19.24
20.36
19.24
1/ Assumes no contraints on growth of investment or ONP. Thds means that
country could invest sufficient capital in each year to attain the GON growth
rate given in line 2. Actual 1962 investment was sufficient for an initial
given in Annex B.
39
difference:
ZA
(41a)
Phase I: ZF
= .71
s
_ Y
+ P1
FM,
m
F FS - 7 FM
---
+ P'
.34.
"
-34
--.29
.5 in both phases.
Un assistance due to
if
GNP must grow at: least as fast as population but the rate
cannot exceed 8K or so, the savings due to variable growth
is close to
determined by model 1.
40
targets by the
lines abc and ab'c'.
When Phase II predominates
if Phase III
axampLe)
would he indicated.
These
of
A more
important modification
FIGURE 4
A: Phase ]I (T=.07)
B: Phase I (V=.04)
ABSORPTIVE CAPACITY
GROWTH LIMIT
(C- .20)\/
CA
2.4
e
2.2 -
2.0
z(D9
)
CONSTANT GNP:
GROWTH\
PHASE II GAP
EQUALIZING 2)PATH ,
~~~~(MODEL
", 1.8-
Ul
H\ANGOF
F-
FEASIBLE",
1.6 0
C')
\\GROWTH PATHS
1.4-/
0
.ABSORPTIVE CAPACITY
a_
,,
10PATH
//
b"RATE
8
6
TIME (years)
10
12
13
41
Chenery /-7,
In model 3
that applies
where
is
With
level (f GNP.
requirements in year
-t
.nt
(i42)(42-~n
Lilt i6
where
and
Mmrt:
by an amount
t-I
07 Tml tt
Z
o
71
- bk
ai
aIw t
import substitution
investment in
equation of model
i gives:
(4 3)
Mt
= M
p'(Vt-v)
Mint
investment in import
in
l/
figure 5./
We assume equal annual increments in im as given by:
b in eq ation (42) is taken
The value of
Imo(t+i) .
TIn
derived in the study
ratio
aggregate
the
is
a -1.5, whLch
import content of
additional
The
of Southern Italy 57
.25.
be
to
assumed
, is
a
investment,
FIGURE 5
IIIII
FSF PMODEL 3
1.2
,MODEL
EF
1.0
bA-
.8
-r/.6
UJ
0
b.l
LI
bJ
SIPHASE
o2
III,
PHASE
PREDOMINATES IN MODEL I
LiJ4
PREDOMINATES IN MODEL I
MODEL 2
.04
0N
.04I.5U.0
NATMODEL 3
1.0 r.
-. 2
.03
(058)
.07
1.4
1.6
1.8
2.0
2.22,
FINAL GNP AS RATIn TO INITIAL GNP (Vn/Vo) WHERE n =13 YEARS
43
excess
cf savings existing in model i is utilized to increase
.59
imports of .40.
The efficiency of the import substitution
terms :1/
(44)
__
__
} i"
where
YAt-
__
.!
is the reduction in
to model 3,
ht
-'r
TF from -tiodel 1
Fa~t
(I-
depends
on the
44
be needed.
odel 2
in line 21 of
Table 3.
investment are quite
Values
in excess of 15% of total
implausile,
which suggests
the
that
(model 2)
or import substitution
(model 3).
In Phase iII, the saving of external capital through
slower growth in model 2 reduced consumption by $11 for
each
dollar saved (lines
efficient
17 and 20).
6/7/65
Revised
44a
Table 4
Welfare Effects of Alternative Growth Models,
Pakistan, 1962-1975
Alternative Growth Ta
t-
5)
(3)
(1) (2)
1.468 1.665 1.886 2.133 2.410
(.06) (.07)
(.05)
(.04)
(.03)
Line
7. Model 2
8. Model )
1.42
1.07
.82
1.26
.63
.5
.43
16.60
14.68
16.00
17.'29
16.4
16.99
.25
.11
-.08
.31
.37
.59
.94
.22
.10
.34
.31
.49
.54
.65
.81
9.78
8.21
9.30
10.07
9.08
9.76
10.34
10.03
10.25
10.79
11.11
10.79
11.42
12.33
11.42
15.93
13.21
15.09
9. Model 1
10. Model 2
Model 3
11.
.84
.79
.50
.32
.09
18.07 19.24
18.25 20.36
18.07
19.24
Discounted at 8;J
12.
13.
14.
Model 1
Model 2
Model 3
15.
Models
Differences in Consumption and Foreign Capital
norinAlt.1ative
Model 1 vs. Model 2
+1.12
+.lV
.
-2.72- -. 1 Consumption (line 7 :' 6)
16.
17.
18.
19.
20.
(Ratro, lirn. K
Modf-l I v:;.
l',
")
-.25
11.0
-.
11.0
-.
05
0
-3.17
-.35
-3.1.7
+,32
-.10
+.91
-.29
-3.17
-3.17
-. 29
-401.67
1.47
0
-. 02
0
-.16
-.09
-.06
1 47
0
-.05
0
-1.57 -.99
-. 14 -. 09
11.0
I11.0
-.17
11.0
-.31
-. 03
11.0
*!od,,l1I
-. 84
:.nu:
")
-.59
-.
57
-.
-line
1.47
-. ,.8
-. 33
1.47
-.31
-.21
1.47
0
-. 13
0
i'ald
45
requirements and
the effect on consumption.
Reduction in
In this situation,
Lid recipients.
For example, it is in Pakistan's interest
:o increase its
rate of growth so long as the productivity
A
F
46
external
assistance, it is
We can,
various
assumptions.
For
in
of 31
of these countries for which the data for our model are
more
more detail.i/
South Vietnam.
the
We attempt to
if
present
parameters ard to
indicate the extent to which developing
in making projections of
future performance
and aid
requirements.
Annex A.
period 1957
1962.
capital-outpuc ratios
were then determined
from the
The annual
nrice changcs;
exchange earnings.
inve "-ment
decade.
country, however,
since growth may have been
constrained
by other factors.
the period is
k.
/( 75
V o)
t=o
where subscript
o = 1957, 4 = 1961, 5 = 1962
The median
are shown in
'Table
5.
investment and
conforms
to the criteria
is quite suggestive.
growth rate
(i
>
Savings criteria.
Table
D-sr 9i
ton of Fara:ne- r Y
e Toer
Parameter
Highes t
; years I-.
ce!t rastn
ross
ent
nvesmen
'
incre
rat
.o..r.ou...:o
a,-r nres."-'giyar
uomoonno g-ro'..-
lag)
..
c'
o GNP
i
n,
growth
aoound rate oi
an
*Chan-e
na <-12,
or
(a)/
.0
71
2.93
.032
.06
.14
.0
.03
.02
.12
.09
.22).2
.In
-. 01
.21
.17
.02
of goods
o3
forefz-n -irrency
o December 1962
'l
(,afte
feti-n
itchang in
first converted to 196USSI
do1arsaee)
Source:
.1o
.o45
.103
ta
Ratio of naon
izro
s sav t s
a
ft ..... t-_-_
....n , t t.4
Quartilel
.144
..
06
c)6
Ratio of .ro ss
'after I*
Co
an
[Lower
ledi an
Sfaartile
.13
Table A-!
.07
11-5
('>ki)
is
already
very low.i/
countries.
the tests
to Phases
II
26 of
Table 6 classifies
and
I.2/
the 31 countries in
7'
.
n
year
n
+
(I +
)rn
where EICrI
,when
In Pi.se .
test
n,
tia fir
a hi" h rate 1(,fI
for
,ria,
is clearl-v net: hy LI
t:rade
;i.
savings
of
the
short2/
ac,ii. cvomenL
()I
of pe:rformantce
rowLh
is
the
)L investment.
This
far
P/-'
11-6
performance.! /
The 12
countries which satisfy both tests
The 5 countries
in group D satisfy neither,
if
their import ratios remained constant.
Conversely, one of
the most
important aspects of the unsatisfactory
performance
of countries in group D is
the stagnation of
their exports,
In this period, at
least, there is
no apparent correlation between
initial income
estimates
II-6a
PROVISIONAL*
Revised 3/12/65
Table 6
No.
Investment
Savings
Trade
Pe rforance
Peri'orr.- ce
Perfor:anccl
__
o,
Growth
inn
-2
.195 |.14
.30
.155
.187 .14
.257 .18
.06
I.09
.04
.14
.15
.11
.04
.22
.51
.16
.42
.43
1.05
.54
.44
1.08
-.05
.028
1.12
.191
.165 -4.44
.0561 2.7?
.03k
.101
.038
.027
.15
.15
.19
.20
.06
.06
.14
.04
.13
.14
.12
.21
.09
.14
.28
.35
.83
.94
.81
1.04
.038
.051
.063
.144
.58
.84
.78
.87
.050
.62
.066
.066
.13
.22
.16
.32
.04
.11
.09
.09
.11
.15
.14
.21
.26
.31
.19
.20
.90
.65
.90
.86
.046
.083
.077
.107
.33
.90
.80
1.21
.050
.075
.081
o88
.371 .19
-'08
.32
.56
1.45
-.015
-5.72
.037
.70
.22
.08
-24
.502
Argentina
.23
.14
.10
.20
.155
Greece
.86
.70
.043
.051
2.28
1.05
.021
.059
.71
.68
.030
.027
.29
1.07
.045
.03?
21.
6.
45.
49.
Honduras
Israel
Korea
Malaya
23.
Mexico
25.
27.
Panama
Peru
46.
43.
47.
28.
Philippines
Taiwan
Thailand
Trinidad-Tobago
.130
.132
.096
.182
29.
Venezuela
1957-62 .102
1953-63"*.124
.121
.170
1.
3.
4. India
36.
Nigeria
8. Pakistan
3. Brazil
1957-62 .140
1953-63* .165
.224
.150
1957-62 .146
1953-63**.140
.14
.15
.06
.07
.16
.10
1.1
.27
.76
.007
2.24
.031
.13
.12
.14 -.02
.07
.18
.09
.11
.15
.31
-.08
.68
.77
.16
.77
.058
-.021
-.013
1.60
-.08
.09
.070
.058
.62
.87
.96
.33
.009
.080
.083
-.40
.79
.67
.029
-.011
4.72
.029
.050
.75
.030
.68
.060
.67
.82 -.025
.013
.80
.016
.82
2.66
1.06
2.15
1.18
.56
.57
.03
.042
.032
.048
.047
.040
.12
.13
.21
.19
20.
5. Iran
7. Jordan
D.
12.
.00 j .14
.18 -.13
.11
.02
.046
.117
Bolivia
9. Turkey
15.
.188 1.15
.060 :.15
Chile
6. Colombia
7. Costa Rica
.234 .13
1.01
.06
..16
2lt6
1957-62
.06
.15
1953 -61**:.170
.12
.157 .14
.06
.21
1957-62 .215
.03
.20
1953-63**.220
.16 -.01
.228
.04 -.11
.13
.11
.07
.18
.17
.11
.08
.14
-.12
-.01
.11
-.11
.59
(Continued)
-2
II-6b
Table 6 (Continued)
Source:
Table A-1
Symbols:
rate (N
.0.)
Io/V o = investment/GNH
i
ratio in
.02
marginal savings
'
ratio
Wh/o = ratio
Savings criterion:
.....
1957-1962
Trade criterion: of
40
Eo/M
,i+ )_
sm
-1
for sme
( 1 + T)P - I
where
EQ,
er
50 years
.05
al
.tractral
]1mitations on savings asci
,':n
,n al
import. s.
'haspK sac :
in,
ti
Mai.,
stan sildd h" moved from Gri
costraint,
-ori...
.WO
mi
tA
O
ari,
MYi,
{ht ,an
ref
tiat.
from Group D to C
11-7
payments performance.
B.
in
11-8
imLJort content of
final demand without affecting the level
Ex post
adjustments,
such as rationing oJ
imported
shortages
of imports.
Some of these symptoms of disequilibrium can
individual sectors.
Some of the more noticeable symptoms
Indicator
Foreign exchange
reserves
gatioof ccapacity
Restrictive
Import Limit
Restrictive
Savings Limit
Low or falling
High or rising
Si
if"ant
excess
o pructi
n
Marginal capital
output ratio
ca~aciiy
Higher than normal
Normal or
low
Capital markets
Slack
Active demand
Marginal savings
ratio
average
Supply of imports
Rationed supply
Normal or surplus
supply
Marginal import
ratio
Substantially
lower than ilLitial
average ratio
Normal or high
II-9
factor._/
(45.)
= (I
t
I*) t
S*)
t
(M + M*)t
E + AR
t
t
level
M* is excess imports
binding.
2/
II-10
It -St
> t
Et
(46)
t
Mt - Et >
- St
(47)
M4
'R<
+ S*
See footnote
to Table 7.
ll-10a
Tabl.j
Tentative Identification of Growth Limits, 1957-1962
eserve
nc rease
Savings
Shortfall
nit
(-)
Count
Phase Indicators
Excess
Excess
Investment
Tmrports
.Oq
-.60
-. 07
Jordan
Korea
Malaya
.15
.08
.38
.0
0
.2t
-2.51
.03
1.44
-. 15
-. 38
-.21
Peru
Thailand
.04
.08
.02
.03
- .32
-1.78
-. 1l
-.05
Israel
-.07
-. 01
-.01
Colombia
-.02
-. 03
.98
-.78
-.56
.59
Costa Rica
-.01
-.11
.85
Guatemala
-.06
.02
-. 1k
.96
1. 22
Bolivia
Brazil
Chile
Turkey
-. 05
.15
19
.19
.19
.22
.15
.05
Clos.ely Balanced
Greece
.0 3
- .08-
India
Iran co
Mexi
-. 06
.02
-.0Ol
0
.06
-. 0
Pakistan
.00
-. 03
.03
-. 01
Philippins
Taiwan
Source:
- .61-.0
-.91
.06
- .66
-.09
.03
.08
-. 03
-. 71
.08
-1.10
-1.07
-. 22
-. 5
-. 1(
II-10b
Table 7 (Continued)
Symbols:
pI
AV.
average import ratio for a country of a particular size and income, 1962.
/V
o o
log "1
.3O0
+ .:77t,
log V0
(.2721) (.1029)
.23,. log No
(.0835)
12o
data for
(t millions), N0
parentheses,
R2
.869,
l
less
developed countries were used in
the computing
Eet
S0
coefficient.
This is
period (t
lI-Il
Import
Savings
Limit
Limit
Indicator
I/
Excess investment is The least significant of the
11-12
C.
future assistance
resources, estimates of
in order to explore
the range
of
future
to
approach has
is
absorptive capacity,
import requirements,
basis.
Our analysFis
bilities
for accelerating
and additional
external
resources.
designed
variables
formance.
is
based
performance
to
Tie methodology
parameter
the performance
per
current
i.ts
to be
aid requirements.
followed
has
11-13
section I.
the fifty
countries
Vh performance
countries
in
the
require
ments.
As a starting point
estimates of
performance
in each
average
of
jected to
i.n model
1, based mainly
of similar countries.
approximately
is
countr ies
marily in
in
for all
the estimates
in
the elimination o
They
L957-1962
In
underlying structural
To evaluate
pri
savings rates,
of disequilibrium conditions
six
large part,
(pro
are sh wn
differ Irom
The
historical elements,
we made
etc.
the effects
relationships.
the possibilities
for accelerated
into three
11-14
groups:
Y' , and
Table A-2.
The possible
We
internal performance.
Plan tar
in rela
could attain
I/
inex A.
(.20)
11-15
could
he attained.
5.2% and
the average
For
targets
oL
ill
countries,
through
the upper
1975
limit
about 6 0'.
Mauritius,
_,n
on
I, ,,r(fler
bilit
bei
to
ies systenat c
5"
),:lo(re : e
ly,
we
range
alih
rather
ment
tian ti
that
is
I recast
in ea c h (.'()untry.
to year acc()r(ling
is
fron 3-4% in
aVe assumed
Projecict on..
es
targets
Israel,
with
countries
of possitWlit
turns out
7'0.1
the
irt each
interesting
trial.
to reveal
the range
1/
Whatever the validity of our subjective judgmcnts as
to the possib iility of improved performance, tihis procedure
has seemed preferabl.e to a more mechanical approach to
testing the sensit-ivity of the results to various types
of change.
OUr principal con.lius ions are not greatly
affecte( by diLferences in judgment as to the poss I)i.l[ties
for ind lividuaL countries, however.
II-16
in model I.-/
are given
Tile projection.
of excess consullp
extent to( wh
'h
,a(i
id"rq ur,
(2icics
t1he
ein)frical- lfol
iti
-. could ho redu,-ed
ithe
t'ljed
,.:'hived in
this way.
in
two resource
sLtu(diCs
capit
For model
of
iinilow
Since
gaps.
be
we
each couitry,
in
derived
l
through
nloliliot
factors
overall
reduction
e sf:finate the
tie
.- br
-is'erLL ied
iilports,
(2,cCss
t.( equal-i-ze
dcs g eilie
p(l
IV i
{ton and
sect ion
I to
LIat: mighlt: be
2 a detailed 50 country
Lot
cap ital.
The Phases
re(tuireinentls.
(1- (;rowl h.
altL-ornat:i ve assumpt:ions
of
th
t: han
raL
ve
of
these limits
in
l-imitati-ons
current
s i tuat io tns.
11-17
18 trial projections.
it is
of
three factors that have been discussed previously in
general
terms.
(1)
limit tends
i.n section I.
the upper
the number
in
increases
by 50" or more
limit is
con
trolling.
by the trade
of internal
limit
over
perlforifance.
time under
historical
This points
conditions
to the rcel
for more
improved.
II-17a.
Table 8
GNP
Historical
Growth
rgExports
Low
High
Exports
Plan
Low
High
Exports
1965
Uper Limit
Exports
'
Low
Exports
High
Exports
Historical
Plan
28%
52_
40%
62
22%
32
24%
46
18%
34
Upper Limit
72
80
54
70
48
24%
44
58
40
58
20
24
34
36
18
18
24
30
68
30
48
22
40
Si2Z5
Historical
32
Pla
,
Upper Limit
38
50
11-18
onLy 4-6 of
Unrealistically
the 50
utier most
:ountr Ie
large increases
in
exports
section.
Require
This
4.4% to 5.9%.
to the low export projection and the lower ot.e to the high
export projection.
i 411 ,
FIGURE 6
200
5
150 -
LU
0
COUNTRY
PERFORMANCE
ASSUMPTIONS
"I"HISTORICAL",
100
'
"
"">
"PLAN" C, 'MODEL
2f
':UPPER LIMIT"
-J
.045
.050
.055
040
.,
290
I
300
I
310
320
330
1975 GNP
.060
I!
340
350
360
(q
11-19
billion and an
billion.
.4% (with no
less.-
II-20
rescarces
in the model 1 solutions, since the
external
in
internal performance.
The maximum reduction due
to im
proved performance is about 20%
at historical
growth rates,
The
rates
is the greater importance of saving, out
of increased
may be stated in
terms
inflow in
1970
11-21
and 1970.
from
-4_7
needs is
imports
billion of unrealized
The predominanc
for imports or
increase
exports.
As
less-developed countries
results to the requirements of all
based on balance of pay
is
billion
,6.6
of
figure
1962
The
.s lower than the OECD
an
1
Table
-18,
in
ments figures
in tLe same year
inflow
oa'pital
(L
estimate of $8.5 billi[o1
estimatc.s are
OECD
and
U.N.
the
The discrepancies between
pp. 6-7 7.
Annex
pp. 23-297 and /-19,
discussed in /-13,
11-22
requirements by 1975, we
have made a set of projections
total
purpose.
capital by a third or
more at plan growth rates.
-n
t!a::;,,,
'i:a a
;.,
i...
*:r
:o:.
: : -'.st
in ::ai
C:
,o )
i_i
]+
n,<
).
il
an
i
.** ir..G...
. a :L
.-. IIa
t,: o: ,,r,.at
'J
fLicr .
on
L
Li:,inv,::t
L ti
b~ cot~nLry':
,;
o'.
i :i ,
II-22a
Table 9
GNP Growth
Targets
1'751/
U.S.
dollars)
Model 1
Historical
Plan
Upper Limit
11.8
18.4
25.8
9.7
15.9
23.9
11.5
17.1
22.2
8.7
13.7
19.3
9.1
11.7
15.6
5.8
10.0
20.5
7.4
10.0
13.8
5.1
6.6
13.4
5.2
5.2
7.3
6.8
8.9
12.6
Model 3 (Approximate2 )
Historical
Plan
Upper Limit
Source:
7.6
10.8
20.5
3.2
2.6
5.7
- 23
II
Figure 6.
--
They
half the
from model i.
import substitution is
a much more realistic
possibility.
of projections
variables beyond
those realized
Welfare Aspects.
in
foreign capital
alone, we
have computed the three welfare
measuzes already
the ir:plications
example.
the Pakistan
When capital
is saved by retarding initial
growth,
lost consumption.
lines aB),
it is very costly in
This is shown by the ratio of
When model 2
II - 24
lk,
import sub
II-24a
Table 10
Welfare Effects of Alternative Growth Models,
Historical
Growth Targets
and Country
Performance,
Low Exports
Line
Upper Limit
Growth Targets
and Country
Performance
High'Exports
Model 1
Model 2
Model 3
3186
2918
3186
3363
3146
3363
3363
3255
3363
3522
3503
3522
ill
-52
)34
142
89
72
118
66
57
116
78
76
2821
2494
2711
29)33
2663
2835
2909
2749,
2834
Model 1
Model 2 (minimum)
Model 3 (minimum)
Consumption
7
8
9
10
11
Model 1
Model 2
Model 3.
U~alized Savings
Model 1
F]xcess Impcrts
Model 1
Differences
and Foreign
Alternative
Model 1 vs.
12
13
14
(1
110
98
2967
2910
2924
43
43
3I
36
75
0
19
-270
-53
-160
in G6nsumption
Capital among,
Models ,
Model 2
Consumption
.
Capital Inflow
.
(v:atio, line 12+13)
-3
-59
5.5
5.1
-52
3.1
-57
.
-38
1.5
Consumption,
16
17
Capital Inflow
(Ratio, line 157*6)
-110
I,
-77
1.41
__________
I(Continued)
-98
-75
-70
1.4
-61
1.2
!43
h0
1.1
II-24b
NOTES
Marginal savings and import rates use 'for the Model 2 approximations
were taken from the implicit 50-country weighted averages derived from
'
_C_
-.
.15
.19
1 .44
.56
.15
.211,
.42
.58
.24
.35
.65
Data f i' lines 1, 4, 7, 10, and 11 are from Table A-4 (Appendix A).
obtained by subtracting
[(line 1
based on an estimate of 35) for capital investment and 10% for eaverage
GNP.
With a time period of n = 13, this gives an efficiency factor, q,
3k(b-1)
+ 1
q=q n-3abk
64
.6
These factors were used for all alternatives shown to derive lines 16
from 15nes 10 and 11. GNP for Model 3 equals that for Model 1, while
III-i
III.
Our analysis hW
shown the conditions
under
Analysis of these
interrelations
leads
to several
principles of
general applicability
to international
assistance policy.
the measurement of
the effectiveness
of
external assistance,
This concluding
for each of
A.
The Effectiveness
of Assistance
kills,
savings and
imported commodities.
The
productivity
Jf additional amounts
of assistance
over short periods
an he measured by the increase in output
that results
from
he fuller
use of domestic resources
which they make pos
ible.
111-2
[may
)e de
to
continue
is
the
hicgh,
endent on ex tenal
outlput is
section.
increment:s
utilized
in the
with
I irsft
significance of
important
the allocat:ion
resources
variation in marginal
saving1s
)e more
to
the suc
ins tance.
rates and
Ls made of
The quantitaLive
of the incremental
likely
in (KNP is
preceding
self-sustaining growtth,
cessive
in tLe
the
t:ransit.i,,nal
pe
the ai(
1( d
io
requiromp.nts and
in Phasc
t
combined effect "n aid( re(luiremen s ;wl
is shown
are
in
)]otlted
Figure
the
II.
Their
time to com
7.
on i t cl chart
to iLlus
tra
FIGURE 7
150 YEARS
-40
60 YEARSM
LL
S4
H= Median
Performance
AS
U= Upper Quartile
-0
Performance
oH
00
30 YEARS
E
C)
zuJ
2 0
-_
__
iyi
:D
,, 20 YEARS
-J
U
..
C-)
-Jf
YE....RS
10
.08
20
30
MARGINAL SAVINGS RATIO (a')
.40
111-3
performance.
the parametersl
','of
total
a period ot 43 years
sustaining growth.-/
.32 and k of 2.9 --
to compl-ete
the
sustaining growth at
require a capftal_
--
'-'
of
only 25%
binations
of
wit'
ofU
to self
values
infLow
extremes,
GNP and
transitLion
of
inil ial
performance"
com
the transitLon
initial
GNP.3/
These calculations
the use that
I/
is madet
of successive
increments
in GNP is
in tial
3/
The ad(i tioen of an absorpti ve ca pacity Li mit would
increase t:he requirements, but a !owance tor a variable
growth rate would reduce them.
ii-4
in
To em*hasize
let us
assume that the productivity of
the first
f ive
years
of
the
"upper
limit"
invest
develop
lo ,,er,
ment
requir ing a
and
correspondingly
external
aid
to achieve
some 45,.
This,
elements
increase
increments
in
the
in
is
amount
same
increase
invest
in
less
self-sufficiency
GNP.
by
savings rate
from .24
to .22.
so as to avoid balance
of
to Phase i
however,
larger
of payments
channeling the
and allocating
investment
bottlenecks.
These long
the short
is
used
run.
The effectiveness
to be increased
in
the
of assistance
is
also likely
in
the efficiency
of use of
in
capital.
section 1.
This
There
111-5
likelihood of attracting
external capital.
the Philippines.
even if it has
the Philippines,
11% to 16% in
Taiwan,
from
111-6
6% to 1'4%
development has
B.
taken hold.
policy problems.
analysis is
Just as optimal
in dif
111-7
Our
!tggest
comrnarisons
statistical
of investment of 10-12"
in
with sufficient
level.
Phase
a decade if
improvement
I can be comoleted by
this
in
skills
becomes available.
by performance.
the
the changes
111-8
Somewhat
in Phase 1, which
if
transition to Phase
LI more
equilibrium exchange
in the future
in the
111-9
in
it
is
unlikely
tion, etc.,
C.
investment alloca
The problem-
to be provided,
is
the standards
is
complicated
the most
stability
in countiies
having speial
ties to the
III-10
Substantial
;mount-:
the balance
In
ol_
ex
a few countries
of payments
needs of develop
ment programs.!
Our analysis suggests some directions
improvements
can be sought
rccognlizing the
and lack of
in
in which
confidence
in
recipient
performance.
We con
(i)
(ii)
to be furnished,
their use.
specifications
and (iii)
the
of tile form
10%
investment--and for
or so of
ability to
as
it becomes
invest,
increasingly
process gets
the development
increases, we
of growth
of
is
under way.
inappropriate
As
aid depends
the rate
the additional
investment
finance the
is carried out.
to 30-40", of
to
needed (luring
Furthermore, an attempt
imply
resources.
to the machinery
and
vestment projects is
investment
of
and
to lower
the rate
equi-pment
likely
prevent
investme:it goods
of
Limiting the
if
needed
hy
the development
of
investment
if
loc a!
of
assistance
it
in
substantial-
the pattern of
to dist:ort
the offer
form of assistance
is
not.
production
is
accepted,
or
111-12
In these circumstances,
behind demand
a limit:ed
vti
t:he principle of
c.,,mparative advantage.
indoc .d must--lag
is broadened
in somoe sectors
t:ransfer,
its
to accommo
also
internaI:onal accounts by t: he
'Thi s olservation
fraction of total
imports.
the
on the allocation of
or (b) it reduces
of
aid
supplied and
111-13
As development
overall performance
improve,
becoming increasingly
view of determining
increase savings as
this
"program
approach"
on
is
in Phase III,
capacity
In
thi.s si-tuation,
is
in
the
ports.
secl:ors.
a number of productive
:o irntort
project priorities
subsuitution and
should give
increased ex
of ai.d should be
111-14
it would be possible to
among recipients-
ing agencies.
II1-15
motivated grants.
It is perhaps more
While it
inefficiency
Whare fairly
reliable
sLaistics
I might have as
There would be
.20
111-16
Appropriate
.23
:he higher
.e approach to self-sufficiency.
REF ERENC ES
L.
2.
Development:
The Case of Greece". Review of Economics
and Stat:Lstlcs (forthcom.ing) .
I or Ent- rnati onal Developme ot-, Prougram Coordination
Staff, Princip!Ls o[ F(orei gn Ecorhin ,c Ass isltauce, Wash
ngton, U. S. Government Prntinn
F)[: ic(,
].963
Agency
U. S. (,ov erom ,
oL Prinit:,fn Otf i-ce, 1965.
3. Agency
4. B.
Ba]lasst,
Homew
TaIado
s o,,I sL
Ptr
B.
j,. 1.
[eat
L
6. H.
Dovel]ocpirlg
Cotn tr ies,
l, [1 ., ! (-9
i.
4.
()[
1t-(1u0.:Lr(
t
,.i I i:'.at: ,til iII l)Ove[OD
LI.
,L ,''c'
i c Re V w \' . ,
eed inigs
B.
7.
8. Government
1970),
9. R.
10.
Pakistan,
of
Karachi,
Harro(,
The Third
FPvc,-Year
Towar(s
Dynamic
Economicos,
London,
"'c()tOom
'w':',
i " D,ve]l)pilot- w th Ut
st:r Scli1o 1, Nay 1954, 22,
Marit
12. R. McKinn(,n,
'Forei gn E:xchange Constrain1;s
D('ve]L
-p1io-t:
nnI ld I'Ie c t Ai, Al. L)cat i ()n",
JuRo
94
LI
Organ i z;t-
Plan (1.965
1.965.
11. W. A.
of Labor'",
13
i.ves in
Journal,
1-952.
A Case SEudy
n]
in Led SuppL ies
pp. 139-1-92.
in E.co(mtt(uc
Fcoo(nom i (: jour nalI
ii
I (r
Lconom ic C) - oper at: non andI Dcv e I pnen :
The Flk,; oi: Fm nanciaL Resources to Less Developed Counri .es
from 1956 to 1963, Paris, OECD Publications, Par.is, ].96/4.
May 1961.
L6.
17.
Annex A
of the model I
then aggregated.
given here.
radically.
revisions
Yearbook
July 1964).
half of
1964
appearing
of National Accounts,
Selection of data
Statistics
an'
dination.
electronic
computor
Reports
in
1963 (available
sources were
Division and
the United
Office
in
Program Coor
in
September
1964.
A-2
these parameters
in the pro
"historical" in that
is
(see below).
leading to a slightly
"upper
.imit''
to be achieved no
accompanied by structural
changos in the economy.
second set,
"realistic" or
The
intermediate possibilities.
The values of
&'ailable
judgments are:
A-3
"Historical"
"Upper limit"
at least as high
as population
growth
highest target
is 10% (Israel
at least 5-6%
no greater th i
15-16%
Capital-output ratio
no lower than
non-negative
generally abou
20-25%; these
estimates usue
were set so a!
permit evcntuL
self-susta inir
growth (i.e.
kF).
i7mport ratios
non-negative
(See below)
Historical
rates were largely based upon past actual imports and thus
A-4
population.
imports
of goods
and services.
than actual
to reduce
its
import
requirements.
in
ent.
Where average
comparison were
fore,
the average
was mace
import co
differences
The
country,
no change
to Lake
in
the upper
limit coefficient.)
1/
Whilte "r,-al sic
plan" marginal import coeff:icients
were gc nera]lv taken as equal to or less than "Ais torical''
ratios, det a it( country studies indicated that in some
cases (Pakistan. Turkey, Argentina, Chile, C",omhia), re.aLiveim
ports yore more l ikoly Mu increase withl faste
r GNP
growt,
-UIfp(r
i mit:
estmates, on the other hand, uniformly
include enough import: subs titut:irn to hring tLem equal to or
)el,V. the "-,isltricaL
rates-.
A-5
Export growth
historical experience of each country modified by judgments
of a "most probable" future growth path, and upon a more
Combining
ever,
countries,
how
so as
as a second alternative.
Table A-3.
The "1962"
trend over
time to
e'ports,
savings,
Where an observed 196? value above or below the trend represented not an erratic fluctuation but a permanent shift to a
higher or
produce a bias
A-6
The notes
informa
alternatives described
details
in
the notes
to Table A-2.
Full
(lines 5,
6,
exports.
7,
9)
exports themselves
The cumulative
capital
Figure
lines 14-19
are given in
linos
3 and
16 and 17)
in
by region,
tions of alternatives.
imports have
in Table A-6.
A-7
conditions discussed
initial
rates
shown in
for "potentia)"
Annex A,
savings and
Table A-2.
for
the country
The marginal
coefficient
potential
and
i.s always
al tcr ;ij(Iust
import.-e: pori:
the realized
iimit:
savin
imports.
The
country sample
close to the
is
development dlecade,
on the other
incidental;
no conscious
effort
t(
augregatc
coefficient
impo rts
has
-s
savings and'mpor
"real ized"
inve stment-savings
to eCquali ze the
savings coeoticient
imports are
projected
i.nvestment,
ol
and exports
in
target of
hand,
is
was ma(le
per year be
the U.N. 's
completely co
to choose planned
out to 5.0'7'0.
The
A-8
be
tween 1970 and 1975.
The average for 1962-1970, shown
in
in ordef
growvth rates.
to about 5.7""',
average potential
These
rates,
it is affected by the internal performance option
chosen.
A-9
Because
would range
from about
increases,
under our
to about 24,
gaps,
differences
exist under
historical
growth
import-export
important.
Largest
gaps appear
2' .
of the
"unplanned"
gap.
This
A-1O
PROVISIONAL
Table A- I
Susmary of Past Structural Relationships. Developing Countries with Moderately
......-.satis torv-Economic -Data- (Data-a of early, q64
................
Highest 5 Years
in Recent Past J
I
NoCountry
3
4
5
6
7
8
9
11
12
13
46
47
49
.14
.12
.14
.11
-.13
.23
.21
.11
.16
.02
.19
.07
.24
.41
.42
.20
.02
.19
.46
.28
.070
.030
.021
.029
.058
.1i
.16
.24
.13
.14
.03
.03
.02
.09
.03
.09
.13
.22
.04
.11
.31
.08
.70
-.11
-. 08
.10
.12
.14
.22
.13
.16
.32
.32
1.04
-. 01
3.15
4.30
4.56
4.67
3.90
.032
.048
.040
.029
.034
.14
.21
.16
.10
.14
.07
.03
.05
.02
-.01
.07
.18
.Il
.08
.15
-.12
-. 01
-.11
-.07
.51
.21
.17
.28
.15
.20
.060
.43
-. 025
.20
.016
.16
.009
-.06
.028
-.01
.06
.14
-.08
.04
.05
3.05
2.43
-7.74
3.39
3.65
.050
.066
-.013
.066
.088
.15
.19
.08
.20
.32
.02
.07
.06
-. 01
.n1
.13
.12
.02
.21
.21
.09
.28
.61
.35
.20
.12
.37
.25
.24
.76
.07
.29
-.31
,21
.92
.038
.063
.028
.144
.107
-. 03
-. 90
.0
.12
(n.a.)
-.08
.38
.10
.24
-.02
7.43
7.80
4.48
3.71
5.51
.037
.046
.031
.041
.032
.19
.67
.16
.25
.15
-.13
.58
.05
.16
-.01
.56
.32
.31
.09
.27
.11
.09 -.53
.32
.16
.29
1.23
.21
,39
.18
-1.66
3.85
.47
.80
-.30
-.015
.031
.007
-.198
.024
77
-.
(n.a.)
-1.13
.28
.15
.11
.04
.04
.09
.14
2.64
3.74
2.61
1.93
5.15
.075
.038
.050
.081
.027
.22
.14!
.13
.16
.18.
.07
.10
.02
.02
-. 04
.15
.04
.11
.14
.22
.31
.42
.26
.19
.20
.18
.21
.20
.50
.18
-.08
.07
.16
1.36
.083
.165
.046
.077
.056
.08
.24
-.09
.24
1.14
.08
4.97
.034
.19
.11
.08
-.39
Pakistan
Turkey
Argentina
Bolivia
Brazil
.198
.102
.113
.084
.154
1960-1964s
1959-1963
1956-1960
1960-1964
1956-1960
.13
.06
.08
.01
-. 02
3.00
4.93
10.04
4.69
2.93
.169
.078
.108
.208
.155
1958-1962
1958-1962
1950-1954
1953-1957
1960-1964
.12
.06
-.01
-.05
.06
.144
.144
.100
.155
.192
1953-1957
1958-1962
1951-1955
1959-1963
1955-1959
.056
.446
.051
.275
0
1955-1959
1958-1962
19.6-1960
1958-1962
1957-1961
.164
.187
.078
.126
.157
1956-1960
1960-1964
1958-1962
1958-1962
1957-1961
.143
1956-1960
50
Mauritius
.1/
All data derived from fitting time trends to actual points for period covered.
in 1962 prices.
2/
.43
.48
.56
.058
.050
.043
-. 011
-. 021
-. 01
.05
.06
-.04
-. 001
-.07
-. 06
-.03
-.18
-. 07
(n.a.)
I
k
r
I
t =
o
% =
2.
.10
.051
-. 17
.030
.05
.080
.57
.191
.44
.083
.06
.02
.01
.19
.28
3.10
2.80
3.77
3.11
1.20
Taiwan
Korea
Philippines
Thailand
Malaya
.20
.14
.15
.30
.15
.10
.06
.00
.09
.18
Mexico
Panama
Paraguay
Peru
Trinidad-Tobago
2957-l96/2
.059'
.045
.046
.101
.117
1954..1958
1953-1957
1957-1961
1953-1957
1958-1962
29 Venezuela
34 Liferia
36 Ntgerla
40 Tunisia
42 Burma
43
45
.210
.154
.103
.129
.215
Chile
Colombia
Costa Rica
Guatemala
21 Honduras
23
25
26
27
28
Greece
India
Iran
Israel
Jordan
15
16
17
20
Relationships duriny
Period
.-
...
C'
90
ic
p'
=
=
change in GNP,1957-1962.
dollars.
Source3
--
of Payments Yearbooks.
Development.
ccounts and from Statistics and Reports Division, Agency for International
")
TABLE A-2
VAWUEOF PARAMETERSUSED IN PROJECrIoNS/
No.
2
Country
"n-rw-=
Target Growth
, . .,e
o
p
S
P
(
torical
Limit
.9
Maximum Rate of
Growth of
Investment
H
P
U
Incremental Aggregate
Capital-Output
Ratio
A
B
0
Parginal Gross
Savings _ .
atio
A
B
C
Marginal
m ort .
Ratio
(
h(
) (b
(1963)
.030
.050
.0
.060
.070
5.OO
4.OO
3.5
.1O .190
.230
.47o
.470
.410
3
5
6
Greece
Iran
Israel
.060
.044
.090
.065
.055
.090
.070
.065
.100
.100
.o60
.120
.100
.070
.120
.100
.O90
.150
3.10
3.70
3.19
3.10
3.70
3.00
3.10
3.50
3.00
.230
.14o
.220
.230
.15o
.300
.250
.250
.300
.190
.232
.4OO
.190
.232
.400
.180
.180
.300
7
9
10
Jordan
Turkny
U.A..R.
.056
.053
.045
.05Z
.060
.055
.080
.070
.060
.160
.080
.050
.160
.080
.o70
.160
.090
.o80
3.37
2.91
2.68
3.37
2.91
2.68
3.37
2.91
2.68
.200
.200
.15o
.200
.256
.170
.250
.256
.200
.370
.110
.200
.370
.170
.200
.330
.no
.150
South
M M- Asia
India
ra;.itan
.o42
.043
.045
.050
.053
.053
.060
.065
.06
.095
.100
.130
.100
.100
.130
.100
.100
.130
3.24
3.20
3.00
3.24
3.20
3.00
3.24
3.20
3.00
.110
.180
.160
.150
.210
,240
.200
.250
.240
.220
.070
.100
.220
.070
.150
.190
.050
.100
LatF, America
ArgentiaBolivia
Brazil
British Guiana
.031
.033
.055
.029
.043 .055
.045 .056
.055 .07n
.040 .050
.1i5o
.060
.080
.100
.150
.o80
.080
.100
.150
.080
.100
7.21
4.OO
2.90
5.00
5.30
4.OO
2.90
5.00
4.30
4.00
2.50
5.00
.220
.loo
.270
.200
.220 .250
.15o0 .200
.270 .280
.250 .330
.070 .170
.220 .220
.090 .090
.470 .470
.035
3.40
3.40
3.00
4
8
11
12
13
14
15
Chile
.o80
.020
.220
.070
.470
.0286
.068
.0286
.05h4
.037
.0089
.0374
.0712
.017
.023
.31
.030
.050
.055
.050
.060
.1oo
.070
.060
.120
.100
.080
3.27
3.74
3.27
3.74
.300
3.27
3.74
.200
.130
.140
.230
.080
.080
.260
.120
.O60
.060
.200
.190
.069
.055
.200'
.060
.050
.lo
.160
.o55
.042
.080
.120
Costa Rica
Ecuador
.061
.O80
17
18
.200
.200
.170
.250
.240
.280
.206
.280
.206
.280
.206
19
20
El Salvador
Guatemala
.050
.040
.060
.050
.065
.055
.o60
.060
.ioo
.080
.1oo
.080
2.50
4.67
2.50
3.50
2.50
3.50
.110
.150
.180
.200
.210
.250
.268
.149
.268
.149
.210
.1h9
16
21
22
\:jlombia
Honduras
Jamaica
.037
.05 .050
.064
.070
.080
3.90
.O4O .045
055
.060
.080
100
4.00
.050 .060
.042 .050
.050 .050
.070
.055
.060
.067
.063
.144
.020
.080
.080
.140
.100
.080
.140
2.52
3.72
2.50
.140
.140
3.50 3.50
.120
.150
.200
.195
.195
.195
3.50
3.50
.160
.180
.200
.206
.206
.206
2.52
3.72
2.50
2.52
3.72
2.50
.170
.150
.120
.170
.200
.200
.220
.220
.200
.1o
.281
.385
.110
.281
.385
.100
.281
.350
.249
.249
23
24
25
Mexico
Nicaragua
Panama
26
Paraguay
.030
.040
.060
5.00 4.00
h.OO
.130
.130
.150
.249
27
28
29
Peru
Trinidad-Tobago
Venezuela
Africa
.055 .055
.050 .060
.045 .060
.070
.088
.070
4.94
4.94
4.77
3.65
3.64
3.65
3.64
3.65
3.64
.285
.200
.290
.285
.250
.290
.285
.250
.290
.2A0 .240
.200
.700 .500 .300
.14h .180 .160
30
31
32
33
Mgeria
Ethiopia
Ghana
Kenwa
.020
.045
.045
.035 .050
.0h5 .05n
.05 - .A)
.,17";-35.050
.060
.150
.098
.060
.060
.150
.098
.060
.060
.150
.098
.060
3.30
2.50
3.70
5.00
3.30
2.50
3.50
4.00
3.30
2.50
3.20
4.00
.o60
.140
.130
.120
.100
.170
.150
.150
.200
.200
.20O
.200
.200
.116
.220
.266
.200
.116
.220
.266
.090
.116
.220
.oho
.0272
.0544
.0156
.0340
34
50
35
Liberia
Mauritius
Morocco
.150
.083
.050
.082
3.80
3.80 3.80
.090
.200
.110
.573
.456
.150
.200
.573
.456
.150
.57
.082
.110
.080
.130
.200
5.00
5.00
4.97
h.00
.150
.082
.150
.080
.070
5.OO
.050
.150
.080
.060
4.97
.O4O .045
.060
.034
.60
5.00
Nigeria
.060
.034
.040
4.97
36
.057
.034
.028
.280
,456
.150
.280
.280
.054
37
38
Rhodesia-Nyasaland.043
Sudan
.051
39
40
.040
.055
Tanganyika
Tunisia
.045
.055
.042
.A
.060 .060
.14o .1hO
.o60
.140
.050
.050
.056
.060
5.00
2.50
.060
.150
5.00
2.50
5.OO
2.50
.060
.150
.v'80
.150
2.93 2.93
4:.62 h.00
.160
.110
.180
.150
.200
.200
2.93
4.00
.110
.150
.513
.220
.513
.220
.150
.200
.220
.190
.200
.250
.188
.260
.188
.190
41
.100
.190
Uganda
.017
.040 .. 050
.060
.060 .. 080
5.00
h.00 4.00
.110
.150
.200
.168
.168
.090
.032
.OlO
.043
.04
.030
.050
.o50
.040
.060
.040
.O60
.010
.050
.050 .060
.o60
.035
.060
.119
5.00
2.75
.27
4.00
2.75
3.27
.177 .177
.070- .070
.24h .260
.177
.070
.180
.h19
.19
.O50
.o60
.050
.029
.055 .60
.051
.133
.091
.060
.170
.190
.150
.217
.0313 .0409
.0544 .712
.0462 .0605
.0252 .0329
Far East
42
44
45
49
46
43
47
48
gmr-Indonesia
Korea, South
Malaya
Philippines
Taiwan
Thailand
South Vietnam
.070 .080
.060 .065
.035 .0ho
.o60
.050
.00
.120 .120
.060
.133
.091
.o60
.070
.133
.091
.060
3.50
4.OO
.75
3.27
2.58
2.62
2.50
3.70
080 .080
.150
.190 .200
.260
.210
.250
.000
.200
.260 .260
.210 .250
.250 .250
.100 .150
.-419
.170 .170
.205 .190
.160 .160
.217 .217
(Continued)
'V
.0356
.0712
.0205
.0445
.025
.01,
.025
.030
.0712 .020
.032
.029
.031
.028
by:
"Historical"
"Realistic
"Upper Li
Plan"
maximum investment
growth rate
Capital-output ratio;
(a)
(b)
(c)
H-A(a)-I*
P-A(b)-I
U-A(b)-l
H-A(a)-2
P-A(b)-2
U-A(b)-2
H-B(a)-2
P-B(b)-2
U-B(b)-1
H-B(a)-2
P-B(b)-2
U-B(b)-2
H-C(c)-2
P-C(c)-2
U-C(c)-2
H-C(c)-2
P-C(c)-2
U-C(c)-2
(a) marginal import ratios, and with the first of the two
No. Country
(1)
(2)
(h
Gross
Gr)sF
Gross
National
Product.
Investrrent
National
Savings
$Us)
()
(5)
(6)
and ')erviceF
Iironrs
Exrorts
Capital
Inflow
Near East
Cyprus
250
52
132
3861
5
6
777
Iran
Israel
35
547
17
Greece
231
461o
2107
70M
)7
705
635
65h4
229
0
405
1070
1020
85)1
Y1
7
9
Jordan
Turkey
U.A.R.
339
6082
3692
52
968
575
-16
770
312
97
198
263
India
Pakistan
37211
7551
(423
922
5581,
6 P3
P3 9
239
11
Latin America
Argentina
12166
2956
12
13
Bolivia
Brazil
2625
470
14053
61
1912
20
1)4
British Guiana
149
50
15
16
17
18
Chile
Colombi-,a
Costa Rica
Ecuador
3451'
4259
467
857
468
909
74
1.3'
271
759
52
11.?
19
20
21
22
Fl Salvador
Guatemala
Honduras
Jarraica
527
1077
418
737
64
112
60
137
56
81
63
98
8
31
23
24
Plexico
Nicaragua
14175
369
2180
60
25
2039
51
Panama
idi
9
478
90
26
Paraguay
57
3h4
186
233
153
18
12
59
47
10
11
115
43
699
501
1002
739
Jouth Asia
Ceylon Aa454
It
8
27
Peru
28
Trinidad-Tobago
29
Venezuela
223
196
149h
26
27
47
)20
25 9
756
1690
517
331
1656
1326
10)1
1792
62
1374
23
100
77
197
765
722
130
1F0
5(,
572
1OP
15)4
144
161
81
296
136
130
23
257
418
150
2?
26
-3
39
1639
103
11498
9h
2444
500
525
-214
595
558
620
177
117
60
479
5741
419
1085
1812
-726
1801
2527
kmex B
2L
Aij
before
the symbol
Model i."
0,
1,?,...
n unless otherwise
indicated.
t
GNP (i.e.
repesents i-t/Vo,
rpresnts
Thus,
etc.).
year's
Other sy-mools
I.
A.
Line 1.
Line
odels
All
Vn =
2.
3.
ZEEEt
B.
Model
4.
Vt
5 -
Le
n+
i - 1E
It
Vt
6.
7.
E St
t
b tt
vV
7S *
where
Z S
and
7F
min(O,
_
t
m
-t
T- tt
EF
-7 F)
l
t
171
B- 2
Line 8.
(n+1)(
T- 7
9.
+ Pt
+ F
,*
* t
where E M
and
max(O,
7C*
E F5
tt
F s
Fm)
ti
10.
V1
-E S*
i.
211. (see line 9)
12.
2 F
t
M)
=9
max(
F' , Z F
t'
~t
13.
Dominant phase
C.
Line 14.
II
if
III
if
F1
F s
FtI
I'Iodel 2
Vi
+
T; t
(n2
Ft-(+1)(
+ p
This i.s derived from the following balance equation for gap
equalization:
21t
t
7
F S2
st
~t
Z
7 Iv2
Et
't
T12
t
Z2
adE2(e
and
(see
lines 15, 16, and 17 below) and solving, we obtain the above
equation fo
2
Z Vt
TABLE A-_Page 2
(1)
No.
Country
Gross
National
Product
(2)
Gross
Investment
(3)
(4)
(5)
(6
Trade in Good
and 2ervic
Expo
Import.
8
Africa12-/
56o/
156
404
1207U
8C
881
1513
718
91
298
99
64
195
87
28
103
12
133
577
297
iC
41
2E
Liberia
Mauritius
Morocco
Nigeria
139
167
1977
3434
93
32
209
564
13
13
150
381
80
18
60
183
159
86
515
738
37
38
39
40
Rhodesia-Nyasaland
Sudan
Tanganyika
Tunisia
1505
1237
597
739
268
177
67
185
245
139
40
64
23
38
27
121
795
283
223
296
71
21
1
1'
41
Uganda
454
44
30
14
182
42
44
45
49
Far East
Burma
Indonesia
Korea, South
Yalaya, Fed. of
1405
8348
2178
1896
209
745
315
347
231
486
82
419
-22
259
233
-72
248
1206
393
941
46
43
47
48
Philippines
China (Taiwan)
Thailand
South Victnam
3789
1805
2879
1381
479
401
455
157
404
273
414
-50
75
128
41
207
762
371
572
305
30
Afra
31
32
33
Ethiopia
Ghana
Kenya
34
50
35
36
Source:
3680
2'
91
V
i0
6
2J
5:
A-, TABLE
A"-3
to a country's
iational accounts had not yet been incorporated
in the published U.N.
of Payments Yearbook,
estimates at
annual exchange rates suggested by
the INF. The difference
between imports and exports corresponds, therefore,
to the DIT's
"balance on goods and services" and includes net
merchandise, net
to a
"constant" dollar basis on the grounds that there
was litte
perceptible
change in the international purchasing porwer of
the dollar during the
period 1957-1962.
)f national savings.
While we have no quarrel with the revised
,oncept, we believe that it has been extremely difficult
in practice
,o estimate the true volume of tr-ansfers contributing
to increased
-urrent consumption.
For this reason we feel that less error is
ade, particularly in estimating trends, by reverting
to the former
O 4)4
H:
1.
4)
40)
4)
4)
a,
>
.0
.4
a'
~~
UH
.0
01
ia
U'N
4),
U')'
C'
0.
5~4
U)~0
r~~r
Sr-
'-N
~V
0~~~~~
4)4
0-70
-H
Hn
014
~0~
m NN
.&
IA m
IP'
U0
in
HU
'
H4
co
1M
HNC)
H4 HH
MID
r-
ri
HHj
N
-4
o)
H14-I
N40
riH
14-
c~0\
HH
COC'
Na
CYNOS0j
O''Q)1
NN
4)40M
Lw
In
4)
.a)
In
HH;
iI0\(I
0E~ (V'-
'
) (d.-
EI
00
14
4)4.go)
d400
4)4)
)
.44.
0N m.I( U)
d044
'
NC)
NN
2.0
0
0
0 3
d1.
:1
-
-I
04
NI
0.
) alH
4J~1
a)5..)
0~hH
5.4
4))
\0-u-H
%O wU
4)
HO
b'
NOi
H
NO\
4-4)
4-i
14j 4
HH
~
~ 3~
4)
-Ca
COO.
g,-ED~U H
.t'
H~C1
(-0ZUU.
d)~-1-
).
to
C~ WNN
%,I-4I
HO~ N
IM
%D
"4
ALNON
ON
"M
'.-.%~
N44
NkA
.
VN4(U''%\
C.'
m0(
Eg
CVIN
14
~~~ ~~-~
HCH''C'0
~ ~~
co\
0300
CI
4))dC
.I
4)\
r-
4)C'.U)
'4
00.4)
bi
02
4(N
.j
01 P7)4)h\
- '4
ta O
d)
k a) '
'0
'-\
C-4~
cos.
14M
U) ElN
N"
a-
+3
.4-0.0
4)
5.3
4)
H0
0
10,
H
4)
0
(i~lr
-4N
Table A-5
BASICPR&CTfINi
RPCSADCPTLIFd
FDVLPE'
1962
1 9 70 V
Plan
Historical
Exports
Upper
Limit,
I of Annue, Growth t
1962.197V.'
97
Plan
Hstori-
Cal
Exports
Limit
Low
Exports
High
Exports
4.92
h4.92
L8.55
5.5%
6.0%
6.7%
8.70
h.48
10.82
6.60
4.22
b.70
5.9
11.53
8.32
3.21
0.63
7.73
11.23
8.32
2.90
5.4%
6.7%
Q.3%
20.94
(78%)
3.76
2.51
4.61
3.34
1.26
32.05
33.22
5.56
3.26
7.28
h.98
2,30
6.27
3.45
7.80
4.98
2.82
NP
(% of ONP Total)
Investment
Savings
Imports
Exports
Foreign Resources/
46.22
(97%)
7.57
6.46
3.73
2.63
1.10
64.83
69.52
69.52
73.45
80.13
89.96
89.96
11.66
9.08
5.74
3.16
2.58
11.66
9.26
5.14
3.35
2.39
14.93
12.83
5.45
3.35
2.10
10.99
8.12
6.42
3.56
2.86
15.08
11.12
7.52
3.56
3.96
15.08
11.47
7.52
3.91
3.61
20.37
17.27
7.02
3.91
3.11
88.60
93.44
93.U1
98.56
111.01
121.56
121.56
131.42
15.04
13.28
15.23
17.61
14.95
16.12
17.61
15.82
16.48
20.19
18.39
16.50
18.65
16.13
18.92
23.13
18.55
20.79
23.13
20.24
21.71
28.49
25.92
21.40
13.46
2.21w
13.46
3.27*
11.
1.6?
16.19
2.87*
16.19
5.00"
18.83
3.80*
18.8
3.23
29.11
Exports
Foreign Resources/
Africa (13 countries)
GNP
(% of Total GNP)
Investment
Savings
10.20
1.55*
8.89
6.85
5.20
3.16
2.04
33.22
31.48
6.27
3.92
b.02
5.67
2.35
h2.12
7.27
5.18
7.76
5.67
2.09
7.46
4.35
9.71
6.60
3.11
!IiatoriApper
Plan
Upper
cal
Limit
tow
High
Exports
Exhort s
100.20
5.1%
7.2%
5.1%
9.7%
7.3%
7.5%
7.3%
6.6%
4.3%
5.3%
6.1%
.9%
5.14
7.9%
1.0(%
7.6%
1.0%
10.4%
3.1%
9.6%
3.1%
8.3%
14.5%
5.2%
6.1%
h.2%
5.8%
7.5%
N6
M.
8%
1
366
17.04
(73%)
v.69
1.58
22.28
23.58
23.58
21.56
26.56
29.11
31.36
3.51
1.2%
h4
2.97
1.65
3.61
2.07
3.61
2.20
4.25
2.85
3.63
2.13
h.55
2.68
4.55
2.94
5.59
4.07
2.3%
14.1%
5.8%
Imports
Exports
5.49
4.38
7.42
6,08
7.63
6.08
816
6.75
8.12
4.75
9.09
7.59
9.45
7.59
10.68
9.07
10.59
Foreign Resources-7
1.11
1.36*
1.53
1.40
1.40*
1.53*
i.R6*
30.92
33.53
33.53
34.68
36.91
42.07
42.07
3.11
1.80
4.28
2.65
4.28
3.00
5.01
3.57
3.86
2.14
5.50
3.10
5.50
3.79
GNP
(% of Total ONP)
Investment
Savings
23.68
(86%)
3.11
2.26
1.61*
9.07
!1.31
4.3%
5.8%
5.8%
1.58*
2.5%
4.0%
2.9%
2.8%
11.97
6. 5
!4.76
Imports
14.80
6.41
6.73
6.82
6.98
7.78
8.46
8.70
9.08
Exports
/
Foreign Resources
3.95
.95*
5.10
1.31
5.10
1.64*
5.54
1.31*
5.54
1.45*
6.06
1,71*
6.06
2.1*
6.99
1.78*
6.99
2.11*
50-Country Total
ONP
(% of All LDC'e GNPV
70.52
(89%)
238.68
253.31
253.31
262.72
296.73
327.62
3.5%
11.5%
5.1%
1.7%
h.5%
6.3%
3.3%
4.6%
327.62
359.50
4.h%
Investment
28.18
35.59
43.45
13.15
51.65
4.79
56.96
56.96
71.93
3.6%
Savings
Imports
Exports
Foreign Resources'
23.07
29.63
24.50
5.97*
26.84
41.54
32.81
9.22*
32.20
44.02
32.81
11.84*
34.20
45.22
36.00
10.03*
42.82
44.81
36.00
9.31*
32.87
51.92
40.00
12.06*
39.93
57.04
40.00
17.45*
43.93
60.17
47.12
14.01*
59.75
59.32
147.12
12.93*
2.8%
.14%
3.8%
5.6%
h.5%
h.9%
3.3%
7.4%
5.21
C.9%
5.6%
4.3%
5.2%
3.8%
7.8%
14.5%
6.3%
5.1%
5.6%
5,2%
6.6%
7.5%
7.6%
5.5%
5.2%
5.9f
/Sce Table II for values of parameters used. Growth rates are roughly classified as (istorical), P(lan), and U(pper Limit); internal
parameters corresponding to these rough classifications are designated A, B, and C; export growth rates are designated 1 (lnw)
and 2 (high).
2/Excludes the oil-producing countries except for Iran.
YForeign resource flows are measured on a net basis. In any particular year moat net flows are capital inflows but some countries
(e.g., Venezuela, Malaya, Burma) are estimated to have potential capital outflows' under the assumptions made. The figire shown here
excludes these potential capital outflows; regional totals are denoted by an asterisk [*) if they include such a country.
-WExcludes Cuba.
Sourcer
November, 1964.
(Continued)'
TABLE A-6
AVERAGE VALUES OF GROWTH RATES, SAVINGS, AND IMPORT COEFFICIENTS
50-COUNTRY SAMPLE, VARIOUS ALTERNATIVES
19b3-1970
Best Possible
Realistic Plan
Historical
Performance
Performance
Performance
High
Low
High
Low
High
Low
Exports Exports
Exports Exports
Exports Exports
(1)
(2)
.043
.037
.091
.043
.049
.091
.043
.037
.091
3.39
.190
.115
.155
.191
3.39
.190
.141
.155
.195
GNP
.051
.051
Exports
.037
.096
3.40
.187
.126
.157
.184
(3)
(4)
(5)
(6)
Historical Growth
Annual growth rates
GNP
Exports
.091
.043
.037
.091
.043
.049
.091
3.26
.215
.113
.150
.170
3.26
.215
.143
.150
.188
3.15
.245
.132
.123
.140
3.15
.245
.161
.123
.158
.051
.051
.052
.052
.049
.037
049
.037
.049
.096
.096
.096
.096
.096
3.40
.187
.146
.157
.204
3.27
.211
.123
.159
.172
3.27
.211
.148
.159
.187
3.15
.243
.151
.120
.133
3.15
.243
.174
.120
.149
.04-3
.049
Marginal coefficients
Capital-output
Savings-output
Savings-output
Imports-output
Imports-output
(Potential.)
(Realized)
(Potential)
(Realized)
Marginal coefficients
Capital-output
Savings-output
Savings-output
Imports-output
Imports-output
(Potential)
(Realized)
(Potential)
(Realized)
GNP
.057
.057
.057
.057
.058
Exports
.037
.049
.037
.049
.037
.049
.102
.102
.102
.102
.102
.102
3.40
.185
.157
.157
.216
3.40
.185
.165
.157
.243
3.28
.209
.171
.157
.176
3.28
.209
.183
.157
.198
3.16
.242
.197
.18
.136
3.16
.242
.212
.118
.156
Marginal coefficients
Capital-output
Savings-output
Savings-output
Imports-output
Imports-output
SOURCE:
(Potential)
(Realized)
(Potential)
(Realized)
Annex B
June 1965
B-3
1
It
15.
T2 t
LineLie5.
16.
E St2
16t
18.
(n+l)(ao-&V)
+ a'\t?
St
(cf. line 6)
t
t
17.
[(1 + r)n+1
12
t -
_2
=E
=
Z E
D. Model 3
Line 19.
V 1
t,
(see line 4)
t31+(11
20.
7,
E it +
I T
(ib
mt
because a part of 7- 13
investment
,9
t'
Hece7 t
Letting b =
7 it
?m.
k
21.
Imt
'I3
I t +7Tnt
Imt*
B-4
Line 22.
E S3 =
t
2.
E 3
t
4-
-st
t
7.1
t,3-+ F mt
where
ET
,
t+
and
2.int
Z
import substitution
24.
13 E
t
E C
t
Derivation of
Imt
E
t
S
t
Vt
t
and
(1*)
I t E 1t
where
alto
Imt
o.
n
E(
k0 i
t-I
Z imt)
om0t
a ZIm
B-5
n t-1
)
But E(
o
o mt
and
k
m
(2:'a)
nI
n
X (n-t)It
0
Mt
M.
0
+
I)
m 1Ii'0
+ (n- )I 1 +
..
" + (I
+ In
+..m
i1
-1
thus
bk;
n
M
(I
- a) nE I
=(n
mt
bk
1 n
- F ti
m
bk o
mt
i.e.,
I Mt=
t
I M0(t+IL)
m o
Now,
_(n+l)(n2
EI
(t+)1)(n+2)
o m
nn
E ti (t+I)
on
ti :n n(n+)(n+2)
0 mo
and
I m
n,3 (t+1)
30m
(2*b)
m
t
o tibn
a)
o
=
where
g
n-3abk
B-6
7 S3 =
13
comes 7 I 1
M3 _
-
+ (I-J)7 I
b
- r S
+ 7 M - 7 E
m
'
'
(3*)
Fm
FF
-(i
71
-i)
(4*)
1:
=1(
Fs -
Fm)
where
g = 3k(b-l)
I~n-.3abk
(1-
b-
Ii.
) I
17
l+g
Vn
( +r ) n , where n
13
2.
3.
ZF
1
=
max (7-
Fm)
.IF)
B- 7
E F2 = E
Line 4.
F3
5-
S2
M2 _E E
E 13 _ Z S3 = Z M3 _ F E
E Ci = 7V
6, 7, 8.
- 7 Si
9-14.
Z(1)t
E,l+e
A2 1
for
(i-')
V i
-
Since I Ci =
(15.1)
and
F Et.
(I+p')z
we have
FVt ,
E(+:)
o 1+d
15.
for
(+)
(n+1),
for
21C
21
=
=
q2v
F Fs
> Z Fm
Z F
< E Fm
, C1
21 v -
But
213
(15.2)
&2 1v -
'
where -2
S*
~21
= rin (,
FS -, Fm)
j1oreovcr,
1 - .-o
I +In
(15.3)
7+
(,0+y
(C'b')" v2
('
+ al'),
('+;
(Table 3, line 7)
i-,0.,..V
V.
1!. 2AelF
Since
:e
havo
Dut
(see
'I
1 =
(Tabl
Ths-
17.
21 c
3,
..
72V
(uatio
f(1,.1) above).
'
be derived
rvi
121
dir,.tl;
.2-
.-
'The fornulas for lines 12-20 are identical to those for lines
15-17 respectively, where discounted values are used for :"L21V.
B-9
Line 21.
Fs-7 Fm )
. 31C = 'min(0,
Since '.'
"31
c-
S and
- 7U
C = " !.V
31
'
31
1
V
"31V
equations (.5.1)
since
S- (see
31C
(77s _ FM.
31 F
22.
Fs ,F
Since
1m
- "- f*
F-
* = max(0,
andand7' '
7)
Fs
= H-
where
FI:
X I,',= F
we have
Fs
=T
.-- i
F S-
Fm)
m)
(Table 3, equation
(4 ))
.
31FS
FS+
23.
%,
23.
"-1 , ,
-7
1-M
<
.The
:21-23. res:)ectivl
, ,,
us .n
B-10
(1)
General equation:
o -
7 A F
Fs
q21
(2)
,Fm
factors.
=
(3) q3 1 ql=1
+g
-+g
FS
Fs
Fm
Fm