Abstract
This chapter analyses in depth the concept, role and the general use of a plan frame of reference (as basis of alternative scenarios) as an inherent tool for the programming approach itself. Frisch’s ‘plan frame’, which we have encountered in the previous parts of the Trilogy, represents the principal tool of the programming approach. Frisch’s plan frame will be referred to as the planning accounting frame (PAF), in order to be more precise, emphasising its quantitative aspect and nature.
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- 1.
As argued in Chaps. 1 and 2 above.
- 2.
The use of the word scenario (largely present in the futuristic literature in the last decades of the past century) is present in Leontief’s and in Tinbergen’s works (notwithstanding their lack of interest in forecasting studies). However, this term is absent in the work of Frisch, who preferred words such as plan frame, configuration or constellation to convey the same concept; and, if applied to planning, planframe, plan configuration, and so on. None of these authors, nor anyone else, has proposed a more precise term in order to facilitate communication, since none of them were engaged in an explicitly didactic work. For more details on the building of reference plan frames or simply programmatic scenarios, I refer to one of my methodological reports for the construction of a programmatic plan frame for economic planning in Italy, on the occasion of my engagement in preparatory works for the Italian plan of 1971–1975, which the presiding government tried to produce (see Archibugi 1972, reprinted and updated in Planning Studies Centre publications in 2002.
An attempt to produce a very partial lexicon of planning terms is in Sect. 2.7. (pp. 125–139) of the work by Leif Johansen (cit.) Lectures on macroeconomic planning, Vol. 1, general aspects (1977). This section contains ‘some notes on the concepts and the terminology connected to the Planning Scheme’, proposed by Johansen. We have dealt with Johansen’s work in Chap. 7, Vol. I.
- 3.
Since at times, the Planning Studies Centre (following in the footsteps of Frischian work) proceeded in elaborating a methodology for a national programming framework. This was called Progetto Quadro and was developed by the Centre in collaboration with the Italian government at the end of the 1960 in preparation of a five-year Plan 1971–1975 (later abandoned). The results of this work are described in detail in the report already referenced (Archibugi 1972, republished in 2002).
- 4.
The multiple dimensions of the PAF and their articulations have been the subject of many of my past writings. Among the most recent is Planning Theory (Springer, Heidelberg, 2008), while a more specified accounting section can be found in Un Quadro contabile per la programazione nazionale e la politica economica strategica (Planning Studies Centre, Roma 1992, already cited).
- 5.
The data of past events here makes sense only when it is significant for future evolution.
- 6.
In Leontief, and a good part of the theoretical literature on planning in general, the usual objective is the national scale of planning.
- 7.
- 8.
See the continuation of the Johansen citation in the cit. from p. 113 to p. 119.
- 9.
Frisch here gives as an example a document of the ECE Commission: La programmation europeenne, a report presented by the Vice-president of the Commission Robert Marjolin to a meeting in Rome from 30 November to 2 December 1962.
- 10.
Frisch, An implementation system etc., 1963, republished in F. Long, ed., 1976 (pp. 135–174).
- 11.
Further information can be found in another work by Leontief (1976b), already cited.
- 12.
An attempt to further the vision of Frisch and Leontief, compacting a system of disaggregate programmatic economic accounts (in the conventional sense, i.e. founded on input-output matrices, as on a central model and other fiscal and regional models) with a social goals system (articulated through a social indicators system) was developed by the Planning Studies Centre in the 1970s by the Italian government (see the summary in Archibugi 1972, 1973a, b, 1974a, b).
- 13.
They are (1957b), Oslo Decision Models, etc. Memorandum, Institute of Economics, Univ. of Oslo; (1963a) An implementation system for optimal national economic planning without detailed quantity fixation from a central authority. Part I: Prolegomena. (Abstract from the proceedings of the third international conference of the operational research, September 1963, Paris: Dunod and English University Press); (1963b) Selection and Implementation. The econometrics of the future. In: Pontificia Accademia Scientiarum, ‘Semaine d’etude sur le rôle de l’analyse econometrique dans la formulation de plans de developpements’, Rome, 7–13 October 1963, Vatican City, 1965.
- 14.
The overcoming of indicators of success based only on monetary prices and values was a very important theme for Frisch, as we will see later; and is closely related to the programming approach.
- 15.
Here Frisch inserted a note that deserves to be mentioned:
There is perhaps a chance of proceeding part of the way towards the programming solution of the implementation problem by considering the interplay between real flows, and financial flows. A research project in this direction, the re-fi-project (re = real, fi = financial) is going on at the Oslo University Institute of Economics, but I shall not be concerned with this here.
In effect, the interaction between real and financial flows through a special model called RE-FI increasingly became for Frisch a bridge between the phase of selection and that of implementation. As we will see in the article cited below, Frisch also increasingly considered financial flow variables (such as prices, private finance and credit, public finance and money) as instruments for implementing the objectives, optimised in the selection process. About the RE-FI model, an instruments of programming that has long survived in Norway after the decline of macroeconomic planning, and which has even attracted the attention of scholars outside Norway, see a contribution by Frisch himself, The Oslo REFI interflow Table, published in Bulletin of the ‘Institut Internazionale de Statistique’ (33rd Session, Paris 1961); and for more methodological details the Memorandum DE-UO: A Generalized Form of the REFI Interflow Table (N.33, 17 November 1959) published later in a volume in honour of Michael Kalecki (1964).
- 16.
Frisch observes in a note: To my knowledge the first systematic study of models from this point of view—joint with a specific example of such model—has been done in my United Nations Memorandum of 18 April 1949 (!) on “Price-wage-tax-subsidy policies as instruments in maintaining optimal employment.”
- 17.
Superseding indicators of success based only on monetary prices and values was a very important theme for Frisch, as we will see later; which was closely related to the programming approach.
- 18.
To the point that the interlacing of publication dates among the various and less accessible writings of Frisch and Leontief make it difficult to ascertain chronological paternities. One fact that is certain is that, in the final analysis of users and followers of the input-output method, Leontief rightly remains the most authoritative and specific exponent of this method and all its applications, although it has unfortunately been very poorly used for the planning purposes he held dear. (See his repeatedly quoted, ‘National Economic Planning: Methods and Problems’ 1976a). Regarding even input-output analysis therefore, this slide, which Frisch complained about concerning all econometrics occurred in depth in specialised studies, which he considered to be rather superfluous (going so far as to call them playometrics).
- 19.
Frisch and the DE-UO were dedicated to the study of a median decisional model throughout the 1950s. The theoretical frame and the principal numeric results of such model were presented in two Memoranda of the DE-UO in 1956: ‘Main features of the Oslo Median model’(10-10-56) e ‘Supplementary remarks on the Oslo Median Model’ (21-10-56).
- 20.
Frisch observes:
It should be possible simply read these relations off from the data in rows and columns of the interflow table. To achieve this, certain standardized balancing principles are introduced in the interflow matrix. For instance, if a given sector or other entity is represented both by a row and a column, the sum in the row should equal that in corresponding column. If there is a row which has not corresponding column, the sum in this row should be equal to zero. Similarly, if there is a column that has no corresponding row.
Such balancing principle could, of course, be introduced in the form of separately written account, but it is much clearer and safer to have each figure or symbol entered only once and have all the data appear in one single table as is done in the interflow matrix. (Frisch, Oslo decision models, Memorandum of the DE-UO, 1957b, p. 4)
- 21.
As a statement of the theory and of the final numerical results of this work Frisch refers to two Memoranda of 1956 cited in the previous note.
- 22.
Here Frisch refers, for further studies in depth, to a cited article offered to the Italian Accademia nazionale dei Lincei nel 1961: The Oslo Channel Model and Corresponding General Mathematical Programming Problem.
- 23.
Cfr. par. 2 of the 1957 work ‘Generalities on planning (Memorandum del DE-UO, 27-02-1957) reproduced in ‘L’industria’ (1959): ‘The first condition for getting a firm grasp on the problem of economic planning is to begin by ridding one’s mind of the monetary way of thinking…’.
- 24.
Here Frisch cites a book by Alec Nove, The Soviet Economy, London 1961, specially the Chap. 8.
- 25.
See the cited Memorandum of DE-UO.
- 26.
- 27.
- 28.
It would be sufficient to examine the literature since the foundation up until now of the two specialised journals (of which I am honoured to be on the Editorial Committee): ‘Socio-economic Planning Sciences (Elsevier, now Springer), and ‘Social Indicators Research’(Kluwer, now Springer), in which a slow and in-depth description of social indicators over time of public programming can be found. On this point, see my own contribution here, which was published in the last of the journals mentioned above.
- 29.
Some work was done in the 1970s in Italy under the ‘Project Framework’, mentioned above. However, this work was interrupted by the general crisis of so-called economic planning in the country. On the other side, this type of experimentation can be done only in corpore vili on the real accounting data. Academic simulations are very difficult to conduct insofar as they involve the use of extreme means (and would be held to general mockery, as has already taken place, and which will probably take place again). More information can be found in Appendix 2.
Bibliographical References to Chapter 1 (Vol. III)
Archibugi, F. (1972), Un Quadro contabile per la pianificazione nazionale [An accounting frame for the national planning] (Rapporto metodologico generale del ‘Progetto Quadro’ 1971–75) in 3 volumes. Ministero del Bilancio e della Programmazione Economica, Roma, 1973.[Re-edition, revised and corrected as ‘Reports’ of the Planning Studies Centre, Rome: 1992].
Archibugi, F. (1973a). ‘The Quality of Life’ in a Method of Integrated Planning. Results of an Italian Research Project, ‘Progetto Quadro’ (presented to the UN-ECE Seminar on ‘Factors and Conditions of Long-Term Growth, Stockholm, Dec. 1973. Roma, 1973. [Republ. as ‘progress report’ in: ‘Socio-economic planning sciences, international journal’, vol 8, n. 6, 1974].
Archibugi, F. (1973b). La ‘struttura di programma’, base operativa sistematica della programmazione economica, [The ‘program structure’, operational systemic basis of the economic programming], Ministero del Bilancio e della Programmazione economica, Roma.
Archibugi, Franco. (1974a). Use of systems of models in Planning, Planning Accounting Frame— seminar promoted by EC of the UN-ECE- Moscow.
Archibugi, F. (1974b). A System of Models for the National Long-Term Planning Process, UN-ECE Seminar on ‘The Use of Systems of Models in Planning’, Moscow, 2–11 Dec 1974 (Revised version: The Configuration of a System of Models as an Instrument for the Comprehensive Management of the Economy, Paper for the ‘XII International Input-Output Conference’, Seville, 1993).
Archibugi, F. (2004). Planning Theory: Reconstruction or Requiem? European Planning Studies.
Archibugi, F. (2005). Compendio di programmazione strategica per le amministrazioni pubbliche, [Compendium of Strategic Planning for the Public Administrations]. Firenze: Alinea Editrice.
Archibugi, F. (2008). Planning Theory: from the Political Debate to the Methodological Reconstruction, Berlin: Springer.
Frisch, R. (1957a). The First Condition for Getting a firm grasp on the problem of economic planning is to begin by ridding one’s mind of the monetary way of thinking. In Memorandum of DE-OU, Oslo.
Frisch, R. (1957b). Oslo Decision Models, etc. Memorandum, Institute of Economics, Univ. of Oslo.
Frisch, R. (1957c). ‘Generalities on Planning’ Oslo DE-UO, 1957c, pp. 207–208.
Frisch, R. (1959). A Generalized Form of the REFI interflow Table published in a Volume in honour of Michael Kalecki— Memorandum DE-OU, 1964.
Frisch, R. (1961a). ‘Economic Planning and the Growth Problem in Developing Countries’, in: Stasoekonomisk Tidsskrift, 2/3, 1961. Repub. in: Frisch, R. (1976) F. Lang ed.
Frisch, R. (1961b). The Oslo Channel Model and Corresponding General Mathematical Programming Problem, Italian Accademia dei Lincei.
Frisch, R. (1961c). The Oslo REFI Interflow Table, in Bulletin of the Institut Internationale de Statistique.
Frisch, R. (1961d). ‘Numerical Determination of a Quadratic Preference Function for use in Macroeconomic Programming’. In: ‘Giornale degli Economisti e Annali di Economia’, Vol. 20 (February 1961). [Repub. in: Olav Bjerkholt, ed. Foundations of Modern Econometrics. Etc. (see) 1995, Vol. II, pp. 35–75].
Frisch, R. (1961e). ‘Preface to the Oslo Channel Model: A Survey of Types of Economic Forecasting and Programming. In: R. C. Geary, ed., Europe’s Future in Figures. Amsterdam, North-Holland. [republished. in: F. Long ed., Economic Planning Studies, Reidel, Dordrecht (see), 1976 (pp. 87–127).
Frisch, R. (1963a). ‘An Implementation System for Optimal National Economic Planning without Detailed Quantity Fixation from a Central Authority, Part 1, Prolegomena’, Memorandum 21, DE-UO, Sept 1963. Second preliminary printing. [Republished. in: Economic Planning Studies, F. Long ed (see) (1976) pp. 129–174].
Frisch, R. (1963b). Selection and Implementation. The Econometrics of the future. In Pontificiaa Accademia Scientiarum, ‘Semaine d’étude sur le rôle de l’analyse econometrique dans la formulation de plans de developpements’, Rome 7–13 October 1963, Vatican City, 1965.
Johansen, L. (1977/1978). Lectures on macroeconomic planning: Vol. 1. General Aspects; Vol. 2 Centralization, Decentralization, Planning under uncertainty. Amsterdam: North-Holland.
Leontief, W. (1976a). ‘National Economic Planning: Methods and Problems,’ in: Leontief W. and H. Stein (eds) The Economic System in an Age of Discontinuity: Long-range Planning or Market Reliance, New York Univ. Press. (Republished. in Essays in Economics, Vol. 2, Theories, Facts and Policies, Blackwell, Oxford, 1977.
Leontief, W. (1976b). ‘An Information System for Policy Decision in a Modern Economy’, in Forging America’s Future, Strategies for National Growth Development (Report of ‘The Advisory Committee on National Growth Policy Process’), Vol. 3, Washington DC.
Leontief, W. (1977). The future of the World Economy, Oxford University Press.
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Archibugi, F. (2019). The Planning Accounting Frame (PAF). In: The Programming Approach and the Demise of Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-78063-4_1
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