Why M'sia should retire 5-year economic plans
Even when they are couched in modern language - 'strategic thrusts', 'key result areas', 'mission‑critical enablers' - they still attempt to steer a complex, evolving economy from the top down, as if information about opportunities, costs, and preferences were known in advance and stable for half a decade.
That assumption is false. When a five‑year plan is taken seriously, it cages the economy; when it is applied loosely, it becomes a wish list.
In both cases, the mechanism of coordinated discovery that markets provide - entrepreneurial trial and error mediated by prices - is displaced. The result is misallocation, fiscal strain, and slower productivity growth.
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Malaysiakini
2 days ago
- Malaysiakini
Why M'sia should retire 5-year economic plans
COMMENT | Malaysia's five‑year plans are a legacy of mid‑20th‑century, Soviet-style, central planning. Even when they are couched in modern language - 'strategic thrusts', 'key result areas', 'mission‑critical enablers' - they still attempt to steer a complex, evolving economy from the top down, as if information about opportunities, costs, and preferences were known in advance and stable for half a decade. That assumption is false. When a five‑year plan is taken seriously, it cages the economy; when it is applied loosely, it becomes a wish list. In both cases, the mechanism of coordinated discovery that markets provide - entrepreneurial trial and error mediated by prices - is displaced. The result is misallocation, fiscal strain, and slower productivity growth.
Malaysiakini
2 days ago
- Malaysiakini
Why M'sia should retire 5-year economic plans
COMMENT | Malaysia's five‑year plans are a legacy of mid‑20th‑century, Soviet-style, central planning. Even when they are couched in modern language - 'strategic thrusts', 'key result areas', 'mission‑critical enablers' - they still attempt to steer a complex, evolving economy from the top down, as if information about opportunities, costs, and preferences were known in advance and stable for half a decade. That assumption is false. When a five‑year plan is taken seriously, it cages the economy; when it is applied loosely, it becomes a wish list. In both cases, the mechanism of coordinated discovery that markets provide - entrepreneurial trial and error mediated by prices - is displaced. The result is misallocation, fiscal strain, and slower productivity growth.
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