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What Is Centralized Planning in the Economy?

Centralized planning is an economic policy that states that the government makes critical decisions regarding the production and distribution of resources. This type of system has been adopted in various countries over old world history and played an essential role in modern economies like China, India, and Russia. By controlling the process for resource allocation, governments can decide what to prioritize regarding industry and infrastructure development across different sectors or regions. While this strategy offers potential benefits such as faster implementation and high levels of efficiency, it also faces certain pitfalls that should be considered before a country commits to this model.

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