A planned economy is a type of economic system where the distribution of goods and services or the investment, production and the allocation of capital goods takes place according to economic plans that are either economy-wide or limited to a category of goods and services. A planned economy may use centralized, decentralized, participatory or Soviet-type forms of economic planning.[1][2] The level of centralization or decentralization in decision-making and participation depends on the specific type of planning mechanism employed.[3]
Socialist states based on the Soviet model have used central planning, although a minority such as the former Socialist Federal Republic of Yugoslavia have adopted some degree of market socialism. Market abolitionist socialism replaces factor markets with direct calculation as the means to coordinate the activities of the various socially owned economic enterprises that make up the economy.[4][5][6] More recent approaches to socialist planning and allocation have come from some economists and computer scientists proposing planning mechanisms based on advances in computer science and information technology.[7]
Planned economies contrast with unplanned economies, specifically market economies, where autonomous firms operating in markets make decisions about production, distribution, pricing and investment. Market economies that use indicative planning are variously referred to as planned market economies, mixed economies and mixed market economies. A command economy follows an administrative-command system and uses Soviet-type economic planning which was characteristic of the former Soviet Union and Eastern Bloc before most of these countries converted to market economies. This highlights the central role of hierarchical administration and public ownership of production in guiding the allocation of resources in these economic systems.[8][9][10]
^Alec Nove (1987). "Planned Economy". The New Palgrave: A Dictionary of Economics. vol. 3. p. 879.
^Devine, Pat (2010). Democracy and Economic Planning. Polity. ISBN 978-0745634791.
^Gregory, Paul R.; Stuart, Robert C. (2003). Comparing Economic Systems in the Twenty-First Century. Boston: Houghton Mifflin. pp. 23–24. ISBN 978-0-618-26181-9.
^Prychito, David L. (2002). Markets, Planning, and Democracy: Essays After the Collapse of Communism. Edward Elgar Publishing. p. 72. ISBN 978-1840645194. Traditional socialism strives to plan all economic activities comprehensively, both within and between enterprises. As such, it seeks to integrate the economic activities of society (the coordination of socially owned property) into a single coherent plan, rather than to rely upon the spontaneous or anarchic ordering of the market system to coordinate plans.
^Mandel, Ernest (1986). "In Defence of Socialist Planning" (PDF). New Left Review. 159: 5–37. Archived (PDF) from the original on 2008-05-16. Planning is not equivalent to 'perfect' allocation of resources, nor 'scientific' allocation, nor even 'more humane' allocation. It simply means 'direct' allocation, ex ante. As such, it is the opposite of market allocation, which is ex post.
^Ellman, Michael (1989). Socialist Planning. Cambridge University Press. p. 327. ISBN 978-0521358668. '[S]ocialist planning', in the original sense of a national economy which replaced market relationships by direct calculation and direct product exchange, has nowhere been established [...].
^Cite error: The named reference :1 was invoked but never defined (see the help page).
^Zimbalist, Sherman and Brown, Andrew, Howard J. and Stuart (1988). Comparing Economic Systems: A Political-Economic Approach. Harcourt College Pub. p. 4. ISBN 978-0-15-512403-5. Almost all industry in the Soviet Union is government owned and all production is directed, in theory, by a central plan (though in practice much is left for local discretion and much happens that is unplanned or not under government control).{{cite book}}: CS1 maint: multiple names: authors list (link)
^Wilhelm, John Howard (1985). "The Soviet Union Has an Administered, Not a Planned, Economy". Soviet Studies. 37 (1): 118–130. doi:10.1080/09668138508411571.
^Ellman, Michael (2007). "The Rise and Fall of Socialist Planning". In Estrin, Saul; Kołodko, Grzegorz W.; Uvalić, Milica (eds.). Transition and Beyond: Essays in Honour of Mario Nuti. New York: Palgrave Macmillan. p. 22. ISBN 978-0-230-54697-4. In the USSR in the late 1980s the system was normally referred to as the 'administrative-command' economy. What was fundamental to this system was not the plan but the role of administrative hierarchies at all levels of decision making; the absence of control over decision making by the population [...].
place according to economic plans that are either economy-wide or limited to a category of goods and services. A plannedeconomy may use centralized, decentralized...
market economy. A mixed economy can also be defined as an economic system blending elements of a market economy with elements of a plannedeconomy, markets...
Market Economy: Economy in which fundamentals of supply and demand provide signals regarding resource utilization. Nove, Alec (1987). "PlannedEconomy". The...
designated market socialism. When planning is utilized, the economic system is designated as a socialist plannedeconomy. Non-market forms of socialism usually...
production are owned by society itself and are utilised in a planned fashion. A plannedeconomy, which adjusts production to the needs of the community, would...
The economy of India has transitioned from a mixed plannedeconomy to a mixed middle-income developing social market economy with notable public sector...
administrative-command system managed a distinctive form of central planning. The Soviet economy was characterized by state control of investment, prices, a dependence...
period, Vietnam has made a shift from a highly centralized plannedeconomy to a mixed economy. Before, South Vietnam was reliant on U.S. aid, while North...
The economy of North Korea is a centrally plannedeconomy, following Juche, where the role of market allocation schemes is limited, although increasing...
production are owned by society itself and are utilized in a planned fashion. A plannedeconomy, which adjusts production to the needs of the community, would...
The economy of Russia has gradually transformed from a plannedeconomy into a mixed market-oriented economy. It has enormous natural resources, particularly...
He believed in the need for a strong, centralized government and a plannedeconomy, but he also recognized the importance of private enterprise and the...
framework. Following independence, Laos established a Soviet-type plannedeconomy. As part of economic restructuring that aimed to integrate Laos into...
Iran is a mixed economy with a large public sector. Some 60% of Iran's economy is centrally planned.[needs update]. Iran's economy is characterized by...
transition economy or transitional economy is an economy which is changing from a centrally plannedeconomy to a market economy. Transition economies undergo...
economist János Kornai, who used this term to criticize the old centrally-plannedeconomies of the communist states of the Eastern Bloc. In his monograph Economics...
plannedeconomy can only come into existence after a market economy has exhausted its historical role and gradually transforms itself into a planned economy...
The economy of Cuba is a plannedeconomy dominated by state-run enterprises. Most of the labor force is employed by the state. In the 1990s, the ruling...
production. During the 1900s, Croatia entered into a plannedeconomy (with socialism) in 1941 and a command economy (with communism) during World War II. It experienced...
refrains from attempts to plan and guide production, the workforce, or sales but support planned efforts to influence the economy through the organic means...
the necessity for planning. [...] Lenin was the genius back of the Soviets' ideas of a plannedeconomy. Read, Steven R. (1990). Planning for the Unplannable:...
planning ministry through mechanisms such as indicative planning or dirigisme. This differs from a centralized plannedeconomy, or a command economy,...
make up the workforce of an organization, business sector, industry, or economy. A narrower concept is human capital, the knowledge and skills which the...
through indirect planning intended to provide better information to market participants. This concept is held in contrast to a plannedeconomy, which aims...
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