Other policy : the influence of policies on technologychoice and small enterprise development

When E.F. Schumacher published Small is Beautiful: Economics as If People Mattered in 1973, appropriate technology appeared to offer a very promising approach to development. The idea was simple. All developing nations had an abundance of people the most important production factor. What the people needed were technologies appropriate to their conditions, technologies which would be low on capital, labour-intensive, small-scale, adapted to local skill levels, and that would use local materials and renewable forms of energy. Yet the strategy proposed in Small is Beautiful has not been implemented on a large scale.

Impediments result from the public policy environment. Macro-policies affect micro level decisions, by manipulating economic incentives and constraints, such as the money supply, interest rates, currency exchange rates, and the availability of credit for different sectors and even sub-sectors. Direct public investments in infrastructure and human resource development and the tying of foreign aid frequently favour the selection of inappropriate technologies.

This publication reviews the major policy issues associated with the introduction of policies to promote appropriate technology. In addition to identifying more appropriate macro-policies, the papers published here suggest positive programmes of action that can be instituted at the national level. Many of the proposed reforms-for example in fiscal and monetary policies, R & D programmes, banking and credit policies complement the IMF/World Bank structural adjustment loan package. At a minimum such changes would remove the hostility toward appropriate technology prevalent in many countries and the bias in favour of large-scale capital-intensive industry.

This book far exceeds our expectations. It is a blueprint for policymakers in government and international development organizations on appropriate policies to promote broad based development.