Planned economy

An economic system in which a government or central authority directs production, investment, and resource allocation, often through binding plans and administrative decisions.

Central planning: The coordination of production and resource allocation by a central authority. It is the core coordinating process through which a planned economy directs activity.
Soviet Union: A socialist federation that existed from 1922 to 1991 and governed much of Eurasia. Its centrally planned economy became the best-known large-scale example.
Market economy: An economic system in which decentralized exchange and prices coordinate much production and allocation. It contrasts central direction with coordination through market decisions.
Economic efficiency: The use of resources to produce the greatest valued output or welfare under given constraints. Planning is often judged by whether it directs resources toward valuable uses.
Material balance planning: A planning method that matches planned supplies of goods with planned uses. It shows how planners reconcile input requirements and output targets.
War communism: The Soviet government’s emergency economic policies during the Russian Civil War, including requisitioning and nationalization. It was an early, coercive attempt to direct production and distribution centrally.
Mixed economy: An economic system combining markets with public ownership, regulation, or planning. Most economies combine market coordination with some state direction.
Information problem: The difficulty of gathering and using dispersed, changing information for economic decisions. Central authorities must process local knowledge that is hard to collect in time.
Five-year plan: A multi-year economic plan that sets production and investment targets, commonly for five years. These plans turn broad state priorities into time-bound targets.
New Economic Policy: A Soviet policy from 1921 that restored limited private trade and small-scale enterprise. It temporarily retreated from comprehensive state direction after economic crisis.

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