The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • E. Malinvaud
Reference work entry


Central planning is inefficient because it lacks incentives and is poorly informed. Complete decentralization risks being inequitable and also inefficient because markets are incomplete and public goods may be neglected. Intermediate systems can overcome these difficulties to the extent that planning mechanisms can mimic the market system while avoiding its deficiencies, public goods can be successfully delivered at the local level, and incentives to report and behave faithfully and to avoid free riding can be secured.


Autonomy Central planning Competitive equilibrium Decentralization Decomposability Free rider problem Hayek, F. Incentive compatibility Incentives Information Non-economic motivation Lange, O. Malinvaud, E. Misreporting Pareto efficiency Principal and agent Private information Prospective indices Public goods Resource allocation mechanisms Social choice Socialism Mises, L. von 

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Authors and Affiliations

  • E. Malinvaud
    • 1
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