establishment of goals and methods by government officials for the production and distribution of goods
The economic system adopted by Socialist countries In this system, the processes of allocating resources, establishing production targets, and setting product prices are determined by government planners rather than the operation of market forces Such a system discourages innovation, productivity, and quality It provides little incentive for plant managers to experiment with new technology The stress of fulfilling quantitative goals set by the state inhibits improving the quality of the product or the production process The absence of competition and the existence of guaranteed markets eliminates incentives for managers to cut cost or improve quality Above all, prices do not provide a guide to help managers determine what goods are needed by consumers and how to improve productivity by lowering costs
Making important, detailed decisions at a centralized location by a government agency that has the power to enforce the decisions Central planning is a key ingredient of socialist economic systems, where high-level government officials make the important decisions as opposed to those decisions being made at a local and/or private level (More)
An economic system in which major decisions about production and distribution are made by planners
the system in which central government bureaucrats (as opposed to private entrepreneurs or even local government bureaucrats) determine what will be produced an how it will be produced