Advantages of planned economy:

• Since this system is centralized and directly under the control of the government, it is stable and safe for investors. There are standards laid down by the government which have to be followed by every investor and thus, it helps to establish more control.
• All individual efforts are focused towards a certain goal, which means that all the energy can be concentrated towards achieving social and economic goal of the government.
• Since this system is stable, long term financial projects and infrastructure can be made without the fear of market downturn, which may lead to abrupt abandonment.

Disadvantage of planned economy:

• In planned economy, planners are not always aware of consumer preferences, shortages, and surpluses with accuracy and therefore, cannot manage production accordingly.
• This type of economy requires many planners and administration to run the system which results in slow decision making, less progressing, and corruption.
• There is surplus labor and materials which leads to waste of labor and resources that could have otherwise been used to fulfill other needs of the society.
• As the system allows very little freedom, there is not much room for innovation. If the state allocates employment, then people are left with very fewer options to choose from.

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