ABSTRACT
In the model of negotiated coordination, production units are responsible for their day-to-day activities, for the use they make of their existing capacity. However, the sense in which economists use the term coordination is more specific. It refers to the fact that in non-subsistence economies the many discrete acts of production that take place need to be coordinated so that they add up to an aggregate output corresponding to what society collectively and individually wants. Thus, the model of negotiated coordination differs from coordination by centralized command in that decisions about investment within a branch of production are decentralized to the negotiated coordination body for that branch, which involves all production units in the branch and is able to make full use of all available information. The interests represented on a negotiated coordination body would between them decide on the pace of change they thought desirable.
