Abstract
The problem of allocating the industries of the Sectorial Programs of Industrial Development in the Andean Common Market is a problem of considerable magnitude. It is a difficult task because of the large number of industries included in each of the programs and because of the lack of adequate data to judge the future efficiency of each of those industries in each of the member countries. The problem is the development of a method that will, subject to distributional constraints, assign the various industries to the member countries so as to minimize the total cost of supplying the region with the products of the industries included in these programs. The distributional constraints are designed to assure that all the countries are assigned at least some industries and that the industries are allocated in a manner acceptable to all countries.
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References
Anne O. Krueger, “Evaluating Restrictionist Trade Regimes: Theory and Measurement,” Journal of Political Economy 80 (January/February 1972): 54.
Bela Balassa and Daniel M. Schydlowsky, “Domestic Resource Costs and Effective Protection Once Again,” Journal of Political Economy 80 (January/February 1972): 67.
Bela Balassa, “Project Appraisal in Developing Countries,” in Economic Development and Planning: Essays in Honour of Jan Timbergen, ed. by Willy Sellekaerts (White Plains, New York: International Arts and Sciences Press, Inc., 1974 ), p. 46.
This seems reasonable in view of the fact that in general there appears to be excess capacity in the industries of the LDCs and that the countries of the Andean Common Market have retained the ability to protect local industries according to the Cartagena Agreement. With respect to excess capacity and the capacity to produce more with the given resources see: Theodore Morgan, Economic Development: Concept and Strategy (New York: Harper and Row, Publishers, 1975), p. 331, and Harvey Leibenstein, “Al- locative Efficiency vs. ‘X-Efficiency,’”American Economic Review 56 (June 1966): 392–415.
See: N.R. Norman, “On the Relationship between Home-Produced and Foreign Commodities,” Oxford Economic Papers 27 (November 1975): 426–439.
See: N.R. Norman, “On the Relationship between Home-Produced and Foreign Commodities,” Oxford Economic Papers 27 (November 1975): 426–439.
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© 1980 Martinus Nijhoff Publishing
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ter Wengel, J. (1980). The Theoretical Model Designed For the Practical Allocation of Industries. In: Allocation of Industry in the Andean Common Market. Studies in Development and Planning, vol 11. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-8730-2_3
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DOI: https://doi.org/10.1007/978-94-009-8730-2_3
Publisher Name: Springer, Dordrecht
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