The benefits of long-term developmental planning: an estimate

Abstract This paper measures the gains in social welfare achieved by implementing a series of five-year plans within the framework of longer-term, 10- or 20-year, horizons. We employ an econometric model of Czechoslovakia and optimal control techniques to optimize plan fulfillment over various time horizons. We find that most of the gains from long-term planning can be obtained by using a 10-year horizon; that long-term planning is more useful in periods of rapid structural change; and that one of the main benefits of long-term plans is the avoidance of the cyclical behaviour engendered by five-year plans.