Decentralised Planning Procedures

Abstract

This chapter is concerned with a topic which has dominated the theoretical literature on economic planning, i.e. the design of procedures for compiling a plan which are decentralised in some precisely specified sense. In Chapter 10 we examine the use to which these procedures have been put in planned economies. Here we confine ourselves to giving an outline of the procedures proposed and making a preliminary assessment of them. The first section discusses some of the requirements which have been made of planning procedures; the second discusses the first and best-known such procedure originally proposed by Oscar Lange in the 1930s; this is followed by sections outlining other procedures, including some which meet the special problems which arise in the presence of economies of scale. (For a more advanced treatment the reader is referred to Heal (1973).)