The feasibility of planned market systems: The Yugoslav visible hand and negotiated planning

In the post-World War II period. Yugoslavia has had six economic systems. This paper focuses on the two planned market systems, the visible hand system of the 1950s and the negotiated planning system of the 1970s and early 1980s. For each of these systems we (a) describe the theoretical underpinnings as conceived by the Yugoslav leaders, (b) evaluate the implications of the theory. (c) examine the functioning of the system as it confronted Yugoslav economic and political realities, (d) review the performance of the Yugoslav economy during the application of the system, and (e) explore the reasons for its demise. We conclude that the visible hand may constitute a viable and successful planned market system. On the other hand, both the practical experience in Yugoslavia and theoretical considerations suggest that the negotiated planning system has too many weaknesses to even be considered as a viable alternative to a market or planning system.