The Collapse of Development Planning

New York: New York University Press, 1994



This book showcases a diverse range of development experiences in order to ascertain the reasons for this quagmire. Case studies of development planning in China, India, post-WWII Japan, South Korea, Africa, and Eastern Europe, and of foreign aid programs (including the Marshall Plan) illustrate the insights an Austrian approach provides toward an understanding of the failure of government development planning. While economists working within the Austrian tradition have previously addressed development issues, this volume represents the first full-length treatment of the subject from a modern market process perspective. Exploding the hegemony of the traditional development paradigm, The Collapse of Development Planning addresses one of the most pressing issues of international political economy. 




Conventional wisdom has it that government management of the economy is the means to transform a backward economy into a dynamic, modern one. Yet, after decades of international aid programs, development planning is today largely perceived as a failure paralyzed by its own bureaucracy and inefficiency. Despite billions of dollars of investment, development successes are few and far between and waste and mismanagement abounds. 

Contributors to the Volume

George Ayittey, American University

Wayne T. Brough, Citizens for a Sound Economy, Washington, DC

Young Back Choi, St. John's University

Steven Hanke, Johns Hopkins University

Steve Horwitz, St. Lawrence University

Shyam J. Kamath, California State University, Hayward

Shigeto Naka, Hiroshima City University

David Osterfeld, St. Joseph's College

Manisha Perera, University of Northern Colorado

Jan S. Prybyla, Pennsylvania State University

Ralph Raico, State University College, Buffalo

Parth Shah, University of Michigan, Dearborn

Kurt Schuller, Johns Hopkins University

Kiyokazu Tanaka, Sophia University, Tokyo

Mark Thorton, Auburn University

Table of Contents

11 Introduction 

12 Money and Capital in Economic Development 
13 The Theory of Economic Development and the "European Miracle" 
14 The Political Economy of Development in Communist China: China and the Market 
15 The Failure of Development Planning in India 
16 The Failure of Development Planning in Africa  
17 The World Bank and the IMF: Misbegotten Sisters  
18 Does Eastern Europe Need a New (Marshall) Plan?  
19 Industrial Policy as the Engine of Economic Growth in South Korea: Myth and Reality  
10 The Political Economy of Post-World War II Japanese Development: A Rent-Seeking Perspective 
11 Privatization and Development: The Case of Sri Lanka 

12 Financial Reform and Economic Development: The Currency Board System for Eastern Europe