JOURNAL OF COMPARATIVE ECONOMICS 14, 53 i-554 ( 1990) Indicative Planning in Developed Economies’ SAUL ESTRIN AND PETER HOLMES C~niwrsit~~ o~~‘S~r.sseu, Rri,yhton RN1 9QN. England Received April 19. 1990 Estrin, Saul, and Holmes, Peter-Indicative Planning in Developed Economies The theoretical and institutional case for indicative planning is reviewed and a role isolated when uncertainty is exogenous to decisionmakers but endogenous to the economy. As developed economies have become more interdependent, successful indicative planning has to be on a larger scale. A quantitative analysis of plan accu- racy in France and Japan since 1946 indicates the usefulness of planning historically. while a comparison of markets’ and planners’ forecasts and outcomes in five coun- tries. 1980- 1985. and of the expectations component of the European Community’s I992 program updates the literature on planning in developed economies. J. Camp. Emnorn., December 1990, 14(4), pp. 531-554. London School of Economics, London WC2A 2AE, England: and University of Sussex, Brighton BNI 9QN. England. ICI I YYO 4cadcmtc Press. Inc ./ozrma/ o/‘Economic I~itcrufwc Classification Numbers: 1 13, 122, 133. I. INTRODUCTION Though it is now one of the instruments least in favor with Western neo- liberal administrations, indicative planning has been an important element of the policy environment in many countries since the Second World War. Indeed, some of the most successful economies of the 198Os, including Japan ’ We thank Lina Takla, Penny Stern. and Polly Vizard for their assistance in preparing this paper. We also thank Joe Brada and especially Peter Murrell for many useful comments, al- though they cannot be held responsible for the contents. Financial assistance from the Interna- tional Economics Research Centre at Sussex University is gratefully acknowledged. 531 0147-5967190 $3.00 CopyrIght 8 1990 by Academic Press. Inc. All rights of reproductmn I” any f&m resencd