Economic Planning and Economic Development in LDCs with Some Reference to the Education Sector of Oil Rich T&T

• Author: Bhoendradatt Tewari/Roger Hosein
• Pages: 243-259

Chapter 9

Economic Planning and Economic

Development in LDCs with Some

Reference to the Education Sector of Oil

Rich T&T

This chapter examines the market limitations of small, less developed

economies and emphasizes the need for an economic planning

framework for such countries. It goes on further to explore the link

between human development and sustainable economic development and

the role of the education sector in this process. The situation in Trinidad

and Tobago is then examined from the point of view of revenue flows,

the role of the state in development, public policy formation and the

significance of the education sector for development. The article

advocates a continuing role for the state in the delivery of education as a

public good.

This article was first published in S. Ryan and A. Bissessar (eds.)

Governance in the Caribbean, SALISES, The University of the West

Indies, St. Augustine (2002) pp. 368–379.

Trade, Investment & Development

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9.1 INTRODUCTION

The free market when left to its own accord and volition would produce

the optimal level of national output in the macroeconomy, or so argues

the neoliberals.1 If we ignore ethical value judgements about the way

income is distributed within a free market system, then the free market

equilibrium position easily emerges as an optimum one. In the true spirit

of the neoclassical school of thought, deliberate policies aimed at

increasing investment cannot raise the national income in the long run.

The free market strives under several idealistic conditions, including

large numbers of sellers within any industry, perfect information and

perfect knowledge. It assumes that the capital endowment in the

economy as a whole is large enough to employ everyone that is willing

and able to work. But is the free market concept workable with generally

positive results in all economies, across all sectors?

This paper discusses the need for economic planning in LDCs by

focussing on the education sector of T&T. The rest of this paper is

divided as follows; the next section discusses why the markets of LDCs

are partly dysfunctional. Section 9.3 discusses the nature of economic

planning while section 9.4 explores the usefulness of the economic

planning process. The next section considers the role of the state in

economic planning and section 9.6 looks at economic planning in the

education sector. Section 9.7 introduces the main trends induced by the

oil boom and its implication for the educational sector. Section 9.8

discusses future economic plans for the educational sector is followed by

the conclusion.

9.2 MARKET LIMITATIONS IN LESS DEVELOPED

COUNTRIES (LDCS)

There are several reasons why a reliance on the market mechanism in

LDCs can lead to problems. Perhaps the leading reason for this is

imperfections in the market place. Imperfections in LDC markets adopt a

number of varied forms but frequently involve imperfect information.

With imperfect information it means that consumers and producers are

maximizing utility and production functions with an insufficient

information base that may or may not trigger optimal resource allocation.

Secondly, LDC markets are typified by a limited amount of intra-

industry competition. In fact in many instances market structures are

1 The neoliberals represent a school of thought, which places emphasis on the virtues of

the free market.