A Multi-Sector Programming Model for Regional Planning in Pakistan

This article presents the outline of a multi-sector, optimizing model for inter¬regional planning and uses it to analyse Pakistan’s Third Five-Year Plan (1965-70). This is an interregional (as distinguished from a national) model in so far as it recognizes the existence of economic regions within the nation and ex¬plicitly takes into account the interregional trade flows. Another aspect of a multi-region economy that the model reflects is that in planning for optimization the model enables the planners to maximize some objective which is a function not only of the value of national income or consumption but also of their distri¬bution between the regions. This is a multi-sector or detailed planning model. The economy of each re¬gion is divided into a number of producing sectors. The model takes explicitly into account the intersectoral flows. In doing so, the model reflects the implications of the di fferences in regional technologies and behaviour. A given consumption target would mean different vectors of consumer goods in diffe¬rent regions be cause consumption patterns are different between regions. A given final demand vector would mean different sectoral output levels and diffe¬rent sectoral allocation of investment in the two regions because the technolo¬gical relations are different. The model is able to spell out the implications of all these factors by relating the regional and sectoral allocation of investment and foreign exchange to location of demand.