Democratic Decentralisation and the Planning Principle: The Transition from Below

Abstract

To adherents of the classical role and nature of planning in economic systems, decentralised planning would appear a contradiction in terms. The orthodox literature on planning had at its core a process of centralised investment decision-making, which had as its corollary central access to and allocation of the surpluses available in the system. On the other hand, if decentralisation is to be meaningful, resources need to be devolved to lower levels of decision making, which must have the right to allocate resources based on local priorities. The intent of this essay is to examine and challenge this apparent contradiction between the orthodox planning principle and decentralisation as is being adopted in contexts like Kerala. The search for a more humane alternative to capitalism, which even when 'successful' in terms of the growth in output in some parts of the world, is characterised by national and international inequality, unemployment, poverty and environmental degradation, is as old as the system itself. Socialism, in theory and in its existing form, provided an alternative with a grand design: that of replacing private property and the market mechanism, which were seen as underlying capitalist failure, with social ownership and centralised planning. The subversion of actually existing socialism in the erstwhile Soviet Union and Eastern Europe and its radical transformation in the direction of a more 'market-driven' system elsewhere in the world, has encouraged a critical appraisal of the functioning of the erstwhile centrally planned systems. The aim of that appraisal would be to combine the advances the centrally planned economies (CPEs) had made in overcoming the anarchy of capitalism and ensuring the provision of basic needs to all at an early stage of development, with