chapter  4
16 Pages

Allocation Of Resources: Investment Criteria

Problems of investment criteria in LDCs are also related to macro and micro level decision-making processes. However, these processes could be, and sometimes are, interrelated. Thus, the planners may have to decide on the sectoral allocation of investments. Next, within the different sectors, given the resources, decisions regarding the choice of projects should be made: finally, the project managers must also decide the techniques of production, given the relative prices of different inputs. The choice of techniques could easily be influenced by the sectoral allocation of resources. Likewise, project allocation could be influenced by sectoral allocation. Again the choice of techniques may influence project allocation.