indicative planning


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indicative planning

a method of controlling the economy that involves the setting of long-term objectives and the mapping out of programmes of action designed to fulfil these objectives, using techniques such as INPUT-OUTPUT ANALYSIS. Unlike a CENTRALLY PLANNED ECONOMY, indicative planning works through the market (PRICE SYSTEM) rather than replaces it. To this end, the planning process specifically brings together both sides of industry (the trade unions and management) and the government.

The only occasion when indicative planning was attempted in the UK was in 1965 when a NATIONAL PLAN was formulated (which set a target economic growth for the UK economy of 3.8% over the period 1964–70) and employed a variety of planning agencies (the NATIONAL ECONOMIC DEVELOPMENT COUNCIL and Economic Development Committees (EDCs) for individual industries) to provide national as well as industry-by-industry coordination. The National Plan itself, however, was abandoned in 1966 after being overtaken by events (a balance-of-payments crisis resulting in a deflationary package of measures) but the NEDC and the EDCs have continued to function on a less formal basis. By contrast, the French and Japanese have used indicative planning continuously since the 1950s. See INDUSTRIAL POLICY.