Demerits of Mixed Economy

Demerits of Mixed Economy:

1. Lack of Co-ordination:

The coordination among the public and private sectors is reduced in a mixed economy. Public sector spends enormous public resources for infrastructure. The private sector goals at profit maximization by employing the infrastructure generated by the public sector. However they lack social responsibility and fail to spend for public causes such as health & education. The private sector too dislikes any restriction forced on it by the government.

2. Red –tapism and delay by Public Sector:

There is every chance which the public sector works inadequately. There is too much of red-tapism and corruption leading to delays in decision making and project implementation. They outcome in inadequacy and also affect the production.

3. Economic Fluctuations:

Mixed economies experience the economic fluctuations. On one hand, the private sector does not operate beneath very rigid conditions set by the government. On another hand, the public sector also does not operate under very firm conditions enforced by the planned economy. The lack of policy coordination among private and public sector outcomes in economic fluctuations.


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