Planned Economy

Planned Economy, economic system in which the production and distribution of the wealth of a country are predominantly directed by the government. These exhibit a lesser degree of state control than the command economies found in many Communist (or otherwise totalitarian) countries, with companies permitted to operate independently, and private ownership of property and business enterprises maintained. Examples of planned economies include that of Nazi Germany, Great Britain during World War II, France from 1945 to the late 1970s, and India from independence until the commencement of economic reforms in the early 1990s. Nationalization, subsidies, prices and incomes policies, and other procedures designed to offset competition may feature in planned economies. Recently planned economies have fallen from favour; France and India being cited as particular examples of their inhibiting effect on productivity and economic development. Free market economies now find more favour amongst formulators of economic policy.