ECONOMIC MANAGEMENF IN HUNGARY 5 socialist countries from the international economy, not as a result of political and ideological differences alone because the international market is dominated by the advanced capitalist countries, but because of the inability of the socialist countries to enter a truly international market of commodities due to low quality and sub-optimal standardization of products. This system envisaged a a model of working of the economy whose main feature is a multiplicity of levels of decision-making. In this model, the linkage problems between plans at different levels are not solved by direct orders but mostly by indirect means (economic indicators, economic regulators and so on) and an important role is played by horizontal links between micro economic institutions.2 As a logical implication of the model, the micro economic organs or enterprises enjoy a wider degree of autonomy. In the case of Yugoslavia, where a "new reform" mechanism has become operational since 1966, the degree of autonomy is maximum (with some attendant problems) by the introduction of what is known as a "poly-centric" plan and managment by "Associated Labour" through a delegate system.3 The crux of "polycentrism" lies in the rejection of the idea of treating vertical and horizontal flow of information and planned indicators as mutually exclusive and accepting them as complementary. In such a model the information flows take place both horizontally and vertically at the same time, thereby in the whole economy the information network could be visualized as a matrix of information bits arranged in columns and rows. The very mechanism of reform in East Europe envisages, depending on particular conditions of a country, a certain degree of poly-centrism. The Rationale of Change It should, however, be borne in mind, as Josef Lenart has pointed out, that the imperative need for improvement of economic management, as reflected in the new system, did not mean that a distinction was made between a simplified concept of an old "bad" and a new "perfect" system, but rather a system which would ensure a higher scientific and technological level in the society. The old system was characterized by a complete lack of responsibility in this regard at the micro level and as such the innovations that were introduced in the technical process of production were mostly the results of commands from "headquarter^."4 In the new system, the management function at the micro level include—within the framework of activities of enterprises, association of enterprises or combines—planning and implementation (within the constraints set by the sectoral or central authority) of