The centrally planned economies tried to avoid the anarchy associated with the atomistic investment decision making process typical of a capitalist system by adopting a centralized coordinated investment decision making system. However, the institutional weaknesses associated with this system have led to the apparent failure of centrally planned economies. The following three papers look for alternative forms of institutional setup which, not only will be able to take care of the shortcomings associated with centrally planned economies but also will be different from the stereotyped setups prescribed by the neoliberal economists. These papers debunks the mainstream argument that market economy and representative democracy is the ultimate destiny for the countries who have adopted alternative economic systems.
The authors argue in this paper that countries should choose appropriate political and economic institutions taking into account the peculiarities of their own economies. This paper then takes a comparative look at the Russian and the Chinese economies and highlights how the Chinese have so far managed to formulate a coherent development strategy based on their economic and political structure, whereas the Russians have faltered as they have been given the impossible choice between implementing neoliberal ideas, which seek to impose a western style economy on the Russians, or to go back to the existing production system, where the Russian people are denied any truly popular program of industrial reconstruction and any truly democratized form of the market economy.
The “failure” of centrally planned economies has prompted economists to look for alternative forms of institutional setup which will also provide a more humane alternative to capitalism. This paper critically reviews alternative institutional forms and concludes that democratic decentralization, with its emphasis on planning at the lowest possible level than state, can be a better alternative to market socialism.
Democratic decentralisation has been an outstanding success in the Indian state of Kerala. This paper presents a detailed discussion about how this decentralization exercise has been successful in promoting maximum participation, transparency and scientific objectivity in plan formulation and implementation. This paper also analyses why this decentralization experiment has turned out to be more successful than the decentralisation programmes undertaken in other states of India.