Useful quantitative modelling techniques for development planning in Papua New Guinea

Stevenson, James Douglas (1978). Useful quantitative modelling techniques for development planning in Papua New Guinea Master's Thesis, School of Economics, The University of Queensland.

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Author Stevenson, James Douglas
Thesis Title Useful quantitative modelling techniques for development planning in Papua New Guinea
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 1978
Thesis type Master's Thesis
Total pages 156
Language eng
Subjects 1402 Applied Economics
Formatted abstract
Planning for the economic development of a politically emergent economy like PNG has to be grounded on the basic economic tenets of efficiency, equity, and optimality if it is not to be counter-productive in an atmosphere of post-independence euphoria. Such economic decision-making can only be tested rigorously with hard facts. However, developing economies like PNG do not have the statistical systems or monitoring institutions to generate the data inputs necessary for comprehensive planning. In this context the researcher who supports the need for objective planning has to contend with the problem of how to plan without accurate data. It is often left to the resourcefulness of the research analyst to develop operational models in the context of the current political environment whilst being constrained by the paucity of statistical resources. In this study a macro-economic linear programming model and a sectorally-oriented input-output programming model are developed in the context of the PNG development experience. The models' results are reviewed in the light of PNG's stated development aims which incorporate the legitimate socio-political aspirations of the peoples of PNG. Chapter One presents the rationale and aim of the study, together with a resume of the limitations of quantitative modelling in general and in the context of this study. Chapter One also contains a brief review of the present "crisis" in development planning, due to pseudo-planning in some developing economies, the debate on "growth without development" and the disenchantment with aid as a vehicle of development during the second development decade. Chapter Two places, in an historical perspective, the PNG-Australia dependency nexus. The vexed question of whether Australia coveted PNG as an imperial possession is reviewed briefly. The transition from colonialism to a phase of neo-colonialism, the role of an indigenous elite in PNG’s development prospects, and the impact Australian aid has had on PNG’s progress are examined, In Chapter Three a linear programming model, given the mnemonic MELP, representing Macro-Economic Linear Programming, is formulated to generate alternative optimal growth paths for defined sectors the PNG economy subject to foreign exchange, labour, and capital constraints. The model is first validated for 1968/9-1972/3 data and this model is applied to various development scenarios for the period 1973/4-1977/8, yielding several portfolios of sectoral investment programmes. These investment programs are derived in the context of PNG’s stated aims for development. A modified Tinbergen semi-input-output model synthesising the Chenery-Strout two gap thesis is developed for application to PNG in Chapter Four. This model, given the title SPAM, standing for Sectoral Programming of Aid Model, evaluates the direct and indirect effects of sectoral expansion programs. The sensitivity of sectoral rankings for the allocation of Australian aid on the basis of attractiveness according to ba1ance of payments and investment criteria is derived. Both the linear programming and input-output models are developed in a macro-economic framework for PNG and both are capable of modification for micro-planning application. The study concludes with a distillation of the major results emanating from the analysis for policy-oriented action and the identification of possible areas for further research. Overall, the study formulates and empirically validates two quantitative modelling techniques so as to produce optimal policy guidelines for decision makers at all planning levels. The models are flexible enough to allow the addition of value judgments to the purely economic dimensions where these value judgments derive from the particular socio-political milieu of an emerging nation state such as PNG.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
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Created: Thu, 14 Oct 2010, 11:03:49 EST by Ning Jing on behalf of The University of Queensland Library