© 2000 by Oxford University Press
ARTICLES |
Why ‘Indicative Planning’ Failed: British Industry and the Formation of the National Economic Development Council (1960–64)
Magdalen College Oxford
The NEDC (Neddy) was established in 1962 through a joint initiative of leading industrialists and the Conservative Government. Its broad aim was to improve economic co-ordination between companies and policy-makers, and thus enable Britain to steer a course away from ‘stop-go’ and towards stable growth. This article examines the sources of the Neddy's swift demise into irrelevance by 1964. Aspirations for the NEDC were multiple and conflicting. Leading industrialists considered it a vehicle for increasing their influence over the course of economic policy. The government, however, was jealous of its policy-making autonomy, and interested in the NEDC primarily as a signal to currency speculators of their commitment to tackling the various supply-side problems of the UK economy. The article stresses two sets of ‘institutional’ factors which doomed the NEDC's transformative potential even as it was being set up. First, business was suspicious of co-operation with (and, more particularly revealing sensitive firm level information to) a body that was so close to central government. Employers were justifiably worried that the NEDC would be used by future governments as the basis for more dirigiste rather than merely indicative planning. Second, companies wedded to the economic organizational principle of ‘collective laissez-faire’ resisted peak-level efforts to induce co-ordination. Thus, paradoxically, the very co-ordination problems in British business that prompted the NEDC's creation were the primary reasons for its failure.