<P> Planned economies are usually associated with Soviet - type central planning, which involves centralized state planning and administrative decision making . In command economies, important allocation decisions are made by government authorities and are imposed by law . Planned economies are held in contrast to unplanned economies, specifically market economies, where production, distribution, pricing and investment decisions are made by autonomous firms operating in markets . Market economies that use indicative planning are sometimes referred to as "planned market economies". </P> <P> The traditional conception of socialism involves the integration of socially - owned economic enterprises via some form of planning, with direct calculation substituting factor markets . As such, the concept of a planned economy is often associated with socialism and socialist planning, although such an economic system has not yet been established anywhere in the world . Some economists and computer scientists have proposed forms of socialist planning based on advances in computer science and information technology in recent decades . </P> <P> Planned economies are held in contrast with command economies, where a planned economy is "an economic system in which the government controls and regulates production, distribution, prices, etc ." but a command economy, while also having this type of regulation, necessarily has substantial public ownership of industry . Therefore, command economies are planned economies, but not necessarily the reverse . </P> <P> Whereas most of the economy is organized in a top - down administrative model by a central authority, where decisions regarding investment and production output requirements are decided upon at the top in the chain of command, with little input from lower levels . Advocates of economic planning have sometimes been staunch critics of these command economies . For example, Leon Trotsky believed that those at the top of the chain of command, regardless of their intellectual capacity, operated without the input and participation of the millions of people who participate in the economy and understand / respond to local conditions and changes in the economy, and therefore would be unable to effectively coordinate all economic activity . </P>

Who owns the factors of production in a planned economy