East and West Pakistan: A Problem in the Political Economy of Regional Planning by Md. Anisur Rahman. Occasional Papers in International Affairs, Number 20. Harvard University Center for International Affairs, July 1968. pp.38.

In this short essay Professor Rahman attempts two things. One,he surveys the various facets of the regional disparity existing betweenEast and West Pakistan and traces the genesis of some of them. In doingso, he improves upon the analysis of others writing on the issue, yetessentially the information and the treatment are not new. Two, hesuggests "an approach to a policy for dealing with the problem ofregional disparity in the country, one which would impose the leastsacrifice to the national objective". Here he applies his model for"Regional Allocation of Investment" which was published in the February1963 issue of the Quarterly Journal of Economics. This review willmainly deal with this second part of the essay. The principal argumentof Professor Rahman's model runs as follows: In a short-term plan,investment should be concentrated in the region where productivity ofcapital, as depicted by a lower marginal capital-output ratio (MCOR), ishigher. But in a long-term plan, one should also consider the marginalreinvestment coefficient (MRC) which is the product of marginal rate ofsaving (MRS) and the reciprocal of MCOR. This is because a region with ahigher MCOR may yet have a higher MRC due to a sufficiently higher MRS.In such a case, earlier investment allocation should be concentrated inthe region with higher MRC, since the immediate loss of output will bemore than offset by the future growth in output from higherreinvestment. But as the terminal date of the plan horizon draws nearerinvestment has to be shifted towards the region with higherproductivity, i.e., lower MCOR, because, after a break-even point, therewill not be enough time left for the higher MRC to recover the loss dueto lower productivity. Other side conditions of the programming model,such as employment objectives, removal of regional disparity, mayprevent full exploitation of the advantage of higher MRC of aregion.