Indicative planning is a form of economic planning undertaken by the state in an effort to solve imperfect information problems in markets and mixed economies to improve economic performance. However, indicative planning only takes the endogenous market uncertainty and plots the appropriate economy and does not look into exogenous uncertainties such as technology, foreign trade, etc. When utilizing indicative planning, the state uses "influence, subsidies, grants, and taxes [to affect the economy], but not forcing". Indicative planning is contrasted with the directive or mandatory planning , in which a country (or other economic unit) establishes mandatory quotas and output requirements. Planning with persuasion is often referred to as indicative planning.
Video Indicative planning
In practice
Indicative planning is coordinated information that guides the choice of separate state and private entities in a mixed market economy or economy.
French
This economic planning method originated in France after the Second World War and was implemented by the General du Plan Commission. The underlying concept behind indicative planning is the initial identification of oversupply, congestion and shortages so that the state investment behavior can be modified in a timely manner to reduce the incidence of market imbalances, with the aim of becoming a shared economy. Indicative planning is one aspect of self-organism.
People's Republic of China
Since the 1978 economic reforms in China, the state has reduced its role to direct economic activity rather than managing it through a directive plan. At the beginning of the 21st century, the Chinese government has limited the role of mandatory directive planning for important national goods and large-scale construction, while increasing the scope of indicative planning and market forces in all other sectors of the economy. China's socialist market economy today is largely based on market forces for consumer goods and indicative planning for heavy industry in the public sector.
Union of Soviet Socialist Societies
The Soviet Union utilized an indicative plan for the state-run economy until 1928, before they were integrated into mandatory planning under the Supreme Council of National Economy and later by Gosplan. Soviet economic reform of 1965 Alexei Kosygin tried to introduce some kind of indicative planning in the Soviet Union.
Japanese
The Japanese government practices indicative planning through the Japan Economic Planning Agency.
Maps Indicative planning
National economic planning
The term National Economic Planning is linked to government efforts to coordinate the work of both the public sector and the private sector through a structured mechanism. Although, during the twentieth century, the term was more related to communist and eastern economies, until the 1970s, theorists and practitioners documented the growth of this practice among western economies as well [1] [2] [3] [4]. In the latter part of the twentieth century and to date, economists have demanded underdeveloped and developed countries - especially in continents like Africa - should embrace the National Economic Planning for the most part [5] [6]. Renowned National Economic Planning supporters and practitioners are Nobel Prize-winning Russian politician Leonid Kantorovich, John M Hartwick [7], Carl Landauer (who, in 1947, wrote one of the first western books on the subject, titled National Economic Planning Theory) American Republican politician Alf Landon, Russian-born Russian politician David Lewis, Chinese politician Zhang Baoshun and German sociologist Adolph Lowe.
See also
- Market economy
- Mixed economy
- Dirigism
- The socialist economy
- State capitalism
- Country-sponsored capitalism
- Economic planning
- New Economic Policy
Note
Literature
- Carl Landauer: Planwirtschaft und Verkehrswirtschaft Duncker & amp; Humblodt, MÃÆ'¼nchen und Leipzig 1931.
- Carl Landauer: National economic planning theory , Berkeley, California: University of California Press, 1944 first edition; 1947 2. edition.
Source of the article : Wikipedia
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