Command and administration economy system

This system prevailed earlier in the USSR and Eastern Europe, and several Asian countries.

The characteristic features of the administrative-command system is the public (and in reality - the state) ownership of nearly all economic resources, monopolization and bureaucratization of the economy in specific forms, centralized economic planning as the basis of the economic mechanism.
Economic mechanism has a number of features. He assumes, first, the direct management of all enterprises from a single center - the highest echelons of the government, which has eroded the independence of economic actors. Second, the government completely controls the production and distribution of products, thereby avoiding free-market relationship between individual farms. Thirdly, the state apparatus directs economic activity with mainly administrative - administrative practices that undermine a material interest in the outcome of labor.

In countries with the command-administrative system of centralized distribution of material goods, labor and financial resources does not involve the direct producers and consumers based on central planning. A significant part of the resources in accordance with the prevailing ideological earmarked for the development of the military-industrial complex.

Main features:

• state ownership in almost all economic resources;
• strong monopolization and bureaucratization of the economy;
• centralized, policy economic planning as the basis of the economic mechanism;
• the absence of any competition and monopoly producers;
• lack of market incentives and motivation of producers;
• domination of the producer over the consumer. In markets with such a system is bought only what they produce. Consumer choice not.

The main features of the economic mechanism:

• direct rule by all enterprises from a single center;

• state fully controls the production and distribution of products;

• State apparatus directs economic activity mainly through administrative-command methods.

This type of economic system is characteristic of Cuba, North Korea, Albania, etc.