ABSTRACT
This chapter demonstrates that the planning and decision making activities of public bodies are in many important respects similar to those of firms. It examines national economic planning. The chapter aims to take examples of planning in the public sector — defence planning and health service planning. It reviews the role of modern micro-economic theory to planning in the public sector. In the UK, the growth of the public sector gave the state increasing control over a broad spectrum of economic activity, but despite the creation of an economic planning board in 1947, it was not until the 1960s that indicative planning was formally introduced. In an article published in 1966 entitled ‘Six Business Lessons from the Pentagon’, D. J. Smalter and R. J. Ruggles argue that the concepts and principles of defence planning can usefully be applied to industrial corporate planning.
