Decentralized economy


    What is the decentralized economy?

    The decentralized economy Is that which distributes decisions among various organizations, leaving the stability of the economy at the mercy of the law of supply and demand proposed by the industries.

    In this way, the State and government organizations do not have an important role within this economic system.

    Characteristics of the decentralized economy

    The main characteristics of the decentralized economy are the following:

    • The vast majority of goods and services are in the hands of private businesses.
    • There is little intervention in the market by the State.
    • Decision-making is based on a large group of capable and trained officials.
    • It is closely related to the market economy.

    Advantages and disadvantages of the decentralized economy


    The advantages of the decentralized economy are the following:

    • The demand for goods and services is determined by the market supply, which generates better quality and prices.
    • It is not necessary for the government to intervene in the prices of the system.
    • Time and knowledge are used of the commanding officers, ensuring success in production.
    • People can choose what to produce and what to consume based on their tastes.
    • It significantly reduces public spending.
    • There are less surpluses and shortages of products.


    The disadvantages of the decentralized economy, although not always strictly enforced, are the following:

    • There is no uniformity in decision making.
    • Sometimes it gives rise to marginality of social sectors.
    • Since training is required, there may be few officials with the required experience and skills.

    Examples of countries with a decentralized economy

    Some countries that implement this type of economic system are:

    Spain Swiss USA
    France Singapore New Zealand
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