In this paper, I analyze the rise and decline of state planning and the implications of this institutional change

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For the most part of the post World War II period, state planning was a dominant model of development. The spread of the nation-state model constructed and legitimated the state as a dominant modern rational actor (Strang 1990; Meyer et al. 1997). The state was the central locus of vision and action for development. The state as such pursued progress on behalf of the nation by providing a blueprint for the nation’s future and the means by which to achieve it in national development plans. State development planning, however, has been in decline in the last few decades. With the breakup of the Soviet Union and its satellites, the most extreme form of state planning has all but evaporated; and the Asian developmental state has been labeled “crony capitalism” and under pressure to reform itself (Wade 2000; Wade and Veneroso 1998).

In this paper, I analyze the rise and decline of state planning and the implications of this institutional change. I show that state development planning was a global phenomenon that was largely facilitated by the international development industry made up of advanced western countries and international organizations. Development planning was a global process also in the sense that states pursued development as defined and elaborated in the international discourse. As the notion of development narrowly conceived as economic growth expanded to include social justice issues such as equity, national plan coverage expanded accordingly.

Since the 1970s, however, growing realization of economic interdependence and changing sources of development finance from development aids and loans to foreign direct and portfolio investment have chipped away at state planning authority and has led to “deplanification” (Hall 1986). In this paper, I argue that this decline has been accompanied by both upward and downward shifts in elements of development planning.

While economic globalization is diminishing state authority and sovereignty and redefining the role of the state by constraining the space within which states operate, globalization also constructs the world as an integrated entity. Shifting upward in this process are visions or cognitive frames of development. The world is increasingly depicted as an imagined community and world level data on various development domains appear as the account and measures of progress at the world level.

Shifting downward is the locus of planning. The new public finance management suggests to this direction as public agencies are reconstructed as autonomous organizations with clear boundaries from the state and one another. At the organizational level, this downward shift is reflected in the rise of strategic planning and subsequently of organizational strategy. As the locus of planning shifts down to sub-state levels, sub-state level entities are constructed as rational actors capable of planning. Moreover, the shift from (central) strategic planning to (organizational) strategy reflects a further downward trend as the term strategy as discussed in the literature implies constructing individual members as their own planners. In this paper, I show this downward shift of planning by examining changes in the management discourse.

Paralleling this downward shift in the locus of planning has been the rise of “otherhood” (Meyer 1996) generally and particularly management consultancy in the management field. Consultants provide authoritative models and advice of action for organizations, who are willing consumers on the lookout for the best ways. Consequently, the downward shift in the locus of action, coupled with global rationalization and the upward shift in cognitive frames of development, is likely to result in the sharp separation of “talk” and action (see Brunsson 1985; 1989 for the parallel discussion in the organizational context), but in a surprisingly high level of standardization among sub-state level actors.

This paper consists of four parts. First, I present cross-national data on adoptions and termination/expirations of national development plans and examine the birth and death of state planning for national development. In the second part, I examine the emergence of world level data and the upward shift in visions of development. Third, in discussing the downward shift in the locus of planning, I analyze changes in management discourse from strategic planning to strategy. Finally, I examine the implication of the downward shift of actorhood in the context of the rising influence of “otherhood”.


Planning is an organized and rational attempt to select the best available alternatives to achieve specific goals. The idea of planning represents the modern belief that social change or progress can be achieved through scientific and rational application of knowledge. This belief has penetrated to various areas of modern life (Waterston 1965; Friedmann 1987; Etzioni 1968; Inkeles 1976). Around the idea of planning, one can map the major ideological fault-line of the post-World War II world: the East-West divide. Socialism and capitalism have been, for most of the 20th century, two main contending models of development (Lindblom 1977; Berthoud 1992). The difference lies with the scope of state planning in the economy (March and Simon 1993 [1958]: 222), and in the extent to which state does so with relative authority and autonomy vis-à-vis other legitimate social actors (e.g., sub-level governmental units, organizations, and individuals). In Anglo-liberal societies, where seemingly the market is left to run its own course, “laissez faire is inevitably and continuously planned” by the state through its policies to securely reproduce stable markets (O’Riain 2000: 193; also see Polanyi 1944; Block 1996; Fligstein 1990; 1996). Planning in the economy, therefore, is not limited to planned economies, but is a more general characteristic of modern societies (Elliot 1958).

Similarly, development is an organizing and normalizing concept, and central problematic of the 20th century (Ferguson 1994; Esteva 1992; Escobar 1995; Cooper and Packard 1997; Sachs 1992). First, it is a cognitive map of the world. Modernization theorists associate advanced and developed countries with “maturity” and underdeveloped and less developed with “backwardness”. Similarly, world systems or dependency theories would label them “core” or “center” and “periphery” respectively (Arrighi and Drangel 1986: 9). Development is seen as a continuum of progress, and the notion that progression is possible through planning has been at the heart of development planning (Escobar 1992).

Also the definition of development has expanded significantly over time in the post World War II period. Initially development simply meant economic growth and industrialization, but has incorporated economic growth, equitable growth, structural adjustment, as well as sustainable development. The concept of development since the 1960s has evolved to include social justice issues, such as quality of life, standard of living, and poverty reduction, to mention a few (Arndt 1987; Ferguson 1994).

Prior to World War II, the Soviet Union and a few countries were involved in national planning. Since the war, however, as part of post-war reconstruction efforts in Western Europe and the influence of the Soviet model of planning in Eastern Europe, the national development plan landed on the European Continent. Planning and development, coupled in national development plans, were zealously encouraged by international development industry. Extensive loans and grants from advanced Western countries stimulated planning outside the European region to a large extent. Most first plan adoptions occurred between the end of World War II and the end of the 1960s. Especially, in the decade of the 1960s, the First UN Development Decade, various international organizations presented national development plans as the solution to Third World problems(Esteva 1992; Chabbott 1998). By the middle of the 1960s, Waterston declared “ the national development plan appears to have joined the national anthem and the national flag as a symbol of sovereignty and modernity” (Waterston 1965: 28; Meyer et al. 1975; Lewis 1966).

[Figures 1 and 2 here]
Figure 1 shows the distribution of first national plan adoptions over time and Figure 2 shows the cumulative distribution of countries with national planning experience. Between 1920s and the end of the 1980s, 135 countries at one point had a national development plans. Between the 1920s and 1949, 31countries adopted national development plans. In the 1950s and 1960s, 29 and 53 countries, respectively, adopted national development plans. Plan adoptions dropped significantly in the 1970s as only 8 countries adopted. In the 1980s, 14 countries adopted national development plans. The number of new plan adoptions increased dramatically after the end of World War II until the end of the 1960s. There were two big waves of plan adoptions during that period. The first wave peaked immediately after the war, and the second one, in the mid-1960s. 18 European countries adopted first plans between the end of the war and before the 1960s. 26 countries in Africa, half of all adoptions in the 1960s, during the UN Decade of Development adopted first plans.

Underlying this worldwide phenomenon is the belief that development planning will stimulate systematic economic growth at a high and constant rate, while providing the means to overcome obstacles to development. This found strong theoretical support in socialism, Keynesianism, and development economics in socialist countries, advanced capitalist industrial countries, and the Third World, respectively.

The very first instance of a modern national development plan, prior to World War II, was the adoption of the First Five-Year Plan in 1929 in the Soviet Union. To the Soviet leaders, in the context of direct competition with the capitalist world, planning was the primary means by which to pursue “The material and technical basis of Communism and the highest standard of living in the world through the establishment of high and stable rates of growth and of optimal interrelationships in the development of the economy” (Cited in Waterston 1965: 29). Through subsequent plans, the Soviet Union, following the war, achieved impressive industrialization in a relatively short span of time in a relatively backward country, rendering state planning as a viable model in running the economy (Chang and Rowthorn 1995). The Soviet style planning became a model in the Soviet satellites. In the Third World countries (for example, India), the Soviet model of planning, coupled with a democratic polity, was adopted in a third way of economic development (Singh 1995).

Keynesianism provided the ideological as well as theoretical rationale for the interventionist conception of the state (Hall 1989) in capitalist societies. First, new macroeconomic concepts based on the balance of aggregate demand and supply came into being and fundamentally changed the basic categories of economic discourse. Second, Keynesianism was influential through its particular set of policy prescriptions. Finally, Keynesian ideas articulated “…an image of the managerial state that endorsed a measure of state intervention but preserved the capitalist organization of production” (Hall: 366). According to Albert Hirschman (1995), “Prior to Keynes there simply was no respectable theoretical position between centralized planning and the traditional laissez-faire policies, with their denial of any governmental responsibility for economic stability and growth” (150).

Development economics, first, against the orthodox position, argued that underdeveloped countries as a group are separate from the advanced industrial countries and that there can be more than one path to industrialization. Therefore, different theories and different policies were necessary for underdeveloped countries: “The long delay in industrialization, the lack of entrepreneurship for larger ventures, and the real or alleged presence of a host of other inhibiting factors made for the conviction that, in underdeveloped areas, industrialization required a deliberate, intensive, guided effort” by the state (Hirschman 1981:10). Second, development economics was also premised on the mutual-benefit assumption. It stated that expanded economic relations between advanced industrial countries and undeveloped countries were beneficial to both (Hirschman 1981). This led to the further proposition that “…the core industrial countries could make an important, even an essential, contribution to the development effort of the periphery through expanded trade, financial transfers, and technical assistance” (12). This reflected also an increasingly integrated conception of the world economy (Meyer 1980). Jan Tinbergen (1967) echoed this view: “It is, however, a matter of importance for the world as a whole that the poorer countries should become more prosperous. A world divided into halves, one poor and the other becoming continuously richer, cannot be a stable world—such a situation is sooner or later bound to result in conflict” (31). This integrated view of the world further facilitated the expansion of the international development assistance apparatus (e.g., development finance through various bilateral and multilateral aids and loans as well as development INGOs).

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