Input-Output Analysis

Abstract

Whatever other characteristics may properly be required of a development plan, most people would agree that it should be internally consistent. This requires essentially that the different parts of the plan should ‘balance’ with each other: the supply of each good with its consumption, domestic production with imports and exports, the output of one sector with those of others. Such an approach is foreign to traditional government budgeting-practice which regards a ‘plan’ as simply a collection of separate projects by different agencies under different ministries subject only to overall financial constraints. Greater consistency in the design of development is clearly desirable. It is here that input-output analysis, or more generally inter-industry analysis has a significant contribution to offer.