indicative planning
Quick Summary
Indicative planning is a method used by governments, particularly in noncommunist countries since World War II, to guide economic policy. It involves setting economic growth targets and making choices about resource allocation, such as balancing private consumption with public investment in areas like education and health.1
In developed countries, planning has become more flexible, focusing on creating conditions for growth and competition rather than detailed controls. In developing countries, plans aim to assess the economy, increase investment, break production bottlenecks, and improve coordination. These plans often provide crucial information about the government's economic intentions to guide both public and private sectors. A key challenge is ensuring consistency among various economic objectives, as some, like stimulating output and employment, can conflict with others, such as controlling inflation.231
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